If the house is a resale property, the buyer must pay a transfer tax of 7 to 8% of the purchase price specified in the deed. The transfer tax is 7% for properties up to 400,000 euros. As of March 2010, the transfer tax increased to 8% for the portion of the property that exceeds 400,000 euros. Therefore, for a house that costs 400,000 euros, the transfer tax would be 7% meaning 28,000 euros. If the house costs 600,000 euros, you would pay 7% on the first 400,000 euros (amounting to 28,000 euros) and 8% on the additional 200,000 euros (amounting to 16,000 euros). This means the transfer tax on a 600,000 euros house would be 44,000 euros.
If the seller is a real estate developer and the property represents a first-time transfer, then in lieu of the transfer tax, the buyer must pay VAT of 8% of the price specified in the deed. The VAT is paid directly to the vendor and a stamp duty of 1% must be paid by the buyer to the provincial tax authorities within 30 days of the purchase.
In addition to the taxes, there are notary fees for the preparation of the purchase/sale deed. The notary fee varies depending on the declared price of the property. For a 625,000 euro property, it would be approximately 780 euros. Additionally, there is a fee to the land registry for registering the sale. This fee also depends on the price of the property. It is generally less than half of what the notary charges. If you opt to contract a solicitor, they generally charge 1% of the purchase price and they handle the registration of the sale. If you don´t use a solicitor or if you take out a mortgage, then you have to pay an agent to collect the deeds, pay the taxes and handle the registration. The agent´s fee (gestoria in Spanish) varies slightly depending on the purchase price, but on average it is around 250 euros.
If you get a Spanish mortgage, you have to pay the arrangement fee of the bank, which in the best case is around half a percent of the amount borrowed and is normally 1% of the amount borrowed. Apart from the arrangement fee, there is the cost of the valuation, the notary and registration fees for the mortgage deed and the cost of the agent that the bank appoints to collect the purchase and mortgage deeds, pay the taxes and handle the registration. Again the agent´s fee is around 250 euros for each the purchase and the mortgage deed.
In general, if you are buying a property without a mortgage and the property is less than 400.000 euros, then the total costs, excluding solicitor fees, would be around 7.5% of the purchase price. If the house is more than 400.000 euros and you are paying cash, then the total purchase costs would be around 8 to 8.5%. If you are taking out a mortgage that will be tied to the property, then the fees can be as high as 10%. We can provide you with a simulation of the exact costs depending on the price of the property you are interested in and the amount of money you plan on borrowing.
