Summary
Summary of expenses to build your house
Building your house from scratch is nothing like buying a ready-made apartment. Here, you're in charge, but you also have a more significant role in the management.
And yes, the self-build mortgage is your ally, but it has its own set of expenses that you should have well secured from minute one.
We're going to organize everything so you can see each expense more clearly, and something very important: who is responsible for paying for it.
| Concept | Who pays for it | Approximate cost |
| Appraisal | Customer | 300 - 600€ |
| Notary (mortgage) | Bank (except copies) | 0.3% - 0.5% |
| Management services | Bank | ~€400 |
| Property Registry | Bank | Variable |
| IAJD | Bank | Variable |
| Project and architect | Customer | 4% – 6% |
| Construction management | Customer | 23% |
| Building permit (ICIO) | Customer | 4% – 5% |
| VAT on construction | Customer | 10% |
| Land purchase (if applicable) | Customer | 21% or ITP |
| Construction cost | Customer | ~40% of the total |
Tip: If there's one thing that characterizes self-promotion, it's the unexpected. And, quite literally, you can't throw a stone without hitting several. That's why we recommend you set aside a 10-15% buffer.
Self-build loan formalization expenses
Let's take a closer look at each expense and analyze your role as a buyer in each one. Take note, because we're coming with tips that can help you create a realistic budget.Appraisal of the completed property
Even if your house is still just a project, the bank needs to know its value once it's built. To find out, you need to have it appraised by an accredited company.This is usually one of the first payments and is also key in determining how much you'll be financed. It's typically up to 80%.
Furthermore, it's advisable to ask before signing whether the lender will require a second appraisal upon completion of the work. Some banks request this to verify that the property's actual value matches the initial estimate, which can entail an additional cost of between 300 and 600 euros.
Notary, management, requirement and IAJD: what does the bank assume?
At this point we have good news for you: since the latest legal changes, the bank covers almost all the closing costs:- Notary (except your copy)
- Management services
- Property Registry
- Tax on Documentary Legal Acts (IAJD)
However, even if your responsibility in this area is minimal, don't forget to include it in your budget.
Bank opening fees and certifications
Here, it largely depends on the bank you're working with. Opening fees are becoming less common. Processing fees are practically obsolete, although they still exist in some cases.If we're talking about early repayment or subrogation, those are future possibilities.
It is important to remember that work certifications are necessary for the bank to release the money in phases.
Taxes, licenses and construction costs of the project
We've reached the point where the project moves from paper to reality. If the self-build mortgage application phase involves submitting plans, figures, and projections, this is the stage where you start to see your future home take shape… and also, when most of the costs begin to appear.Because yes: once financing is approved, building a home involves facing a series of technical, administrative and tax expenses that go far beyond the masonry budget.
From municipal licenses to taxes, technical certifications, or possible deviations in construction, this part requires planning and sufficient financial margin to prevent any unforeseen event from hindering the project's progress.
One of the most common mistakes among those who embark on self-promotion for the first time is to only calculate the cost of construction "off the plan" and leave out associated expenses that, although less visible at first, are absolutely necessary to complete the work.
To give you an idea, within this phase you will need to consider:
- Technical fees for architects, surveyors and project management
- Municipal fees and mandatory building permits
- The payment of taxes related to the physical execution
- Periodic certifications to release financing tranches
- Possible additional costs arising from modifications or adjustments in construction
- The administrative expenses necessary to legalize the property upon completion
Furthermore, as we have already mentioned in the previous point, there is an important factor that is often overlooked: the self-build mortgage does not deliver all the capital at once.
The financial institution releases the funds in phases, usually as construction progress is certified. This means that at certain times, you will have to make advance payments until the bank authorizes the next disbursement.
That's why, more than in any other type of mortgage financing, having additional liquidity makes the difference between a smooth project and a construction full of pauses and uncertainty.
The good news is that if you know all these costs in advance and include them in your budget from the start, you can build with much more peace of mind, avoid surprises, and focus on what's important: seeing your house go from being a project to becoming a reality.
Construction project and architect's fees
In this section, we include the topographic survey, which is usually found to cost between €1000 and €1500.In addition, the architectural project is usually between 4-6% of the cost; and the construction management itself normally forces you to consider between 2 and 3% more.
Yes, this is the point where the buyer sees a golden opportunity to cut costs from the budget. We, however, advise against it because a well-designed project avoids costly mistakes.
Municipal building permits and the ICIO tax
Before starting to build, there is a mandatory step that marks the real starting point of the project: going through the town hall.To build your home you need a major works license, an urban planning permit that confirms that your project complies with local regulations (planning, building capacity, setbacks, etc.).
Without this license, you cannot start construction.
But we're not just talking about paperwork here, we're also talking about costs. You'll usually find two main items:
- Building permit fee: set by each municipality and can vary considerably depending on the location.
- ICIO (Tax on Constructions, Installations and Works): this is the most relevant one.
The ICIO is calculated on the material execution budget (PEM) of the work and, as a reference, it usually ranges between 2% and 4%, although in some municipalities it can approach 5%.
This tax is normally paid at the beginning (or in stages), but the city council can make a final settlement at the end of the work, adjusting the amount if the actual cost has been higher.
In addition, depending on the case, other associated expenses may appear such as occupation of public roads (scaffolding, containers), waste management fees and/or temporary supply connections.
They're not usually the highest, but they add up, and it's a good idea to factor them in from the start.
VAT on the physical construction of the housing
This is where many self-builders get surprises, because not everything is taxed the same way. VAT depends directly on the construction organization.If you hire a builder to handle the entire project (the most common scenario), a 10% VAT is applied to the work performed.
This reduced rate applies because the house is being built for personal use, which is a significant tax advantage.
However, if you decide to manage part of the work yourself and buy materials directly, things change: 21% VAT.
What seems like a saving by buying it yourself often ends up making the transaction more expensive due to the VAT difference.
Regarding the land, there are also two scenarios: purchases from a company or developer that are subject to 21% VAT and, secondly, purchases from a private individual that correspond to the payment of the ITP (Property Transfer Tax), the percentage of which depends on the autonomous community.
| Scenery | applicable VAT |
| Builder who carries out complete construction projects | 10% |
| Direct purchase of materials by the self-builder | 21% |
| Purchase of land from a company or developer | 21% |
| Purchase of land from a private individual | ITP (varies by autonomous community) |
Undoubtedly, the land can represent a very significant part of the total investment and is not always included in the self-build mortgage.
Construction costs and progress certifications
Building is not about paying for everything at once, firstly because the bank releases the money in phases and, for this, you will need certifications that prove the progress of the work.In total, construction usually represents around 40% of the overall budget.
And don't forget the final stage of construction:
- Deed for new construction
- Certificate of occupancy
- Supply launch
Build your ideal home with the CREA Mortgage from UCI
If you're in "I want my custom-built home" mode, options like the CREA Mortgage are designed precisely for this: phased financing, adapted to the pace of your construction.You can find all the information about the mortgage on our website. Furthermore, this same financing has allowed us to be included in the list of the 100 most relevant innovators of 2025, according to the newspaper El Mundo.
Frequently asked questions about self-build mortgages
Are there self-build mortgages with 100% financing?
That's not the norm. Most often, they finance up to 80% of the appraised value (sometimes the lower of the cost and the final value). You'll have to provide the rest.Can I apply for a self-build mortgage without owning the land?
Normally not. The land is usually a key guarantee for the bank.However, some entities allow you to include your purchase within the transaction.
