Costs when buying a house in Spain
What are the costs and taxes involved in buying a property in Spain? For residential properties, the amount of tax payable will vary depending on whether you are buying a resale property or a new-build property. Apart from taxes, there are also various fees that you will need to consider. Below you will find an overview of the costs involved in buying a property in Spain.
In case of acquiring a resale property, the buyer must pay a property transfer tax, which is currently 7% of the purchase price specified in the deed. To calculate the base amount of this tax, you take the purchase price and determine the portion that relates to the share each person is purchasing. This amount must be settled and submitted to the corresponding tax office within 30 days of the purchase of the property.
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 10% of the price specified in the title deed. The VAT is paid directly to the vendor and a stamp duty of 1.2% must be paid by the buyer to the provincial tax authorities within 30 days of the purchase.
In addition to the taxes, there are the following fees:
Notary fees for the preparation of the purchase/sale deed – They can range from 700 to 1400 euros, depending on the purchase price.
Land registry for updating the title – This fee also depends on the purchase price. It is generally less than half of what the notary charges.
Legal fees – If you opt to contract a solicitor, they generally charge 1% of the purchase price plus VAT.
Administrative fees – If you don’t use a solicitor or if you take out a mortgage on the property you are purchasing, then you have to pay an administrative fee to the company that collects the deeds, pays the taxes and handles the registration. The administrative fees vary depending on the price of the property.
If you apply for a mortgage in Spain, you should know that from 2018 and 2019 the expenses of the notary, land registry, stamp duty, and the administration fees must be assumed by the entity that grants the loan. The buyer will only be responsible for the cost of the initial valuation of the property and any other costs incurred, such as the use of a broker or legal advice.
It is important to note that real estate agency fees in Spain are usually paid by the seller, not the buyer. In general, fees range from 2% to 10% depending on the region of Spain, the type of property and whether the agent has an exclusive contract to sell the property. However, as agency fees are usually included in the sale price of a property, you don’t need to budget for them separately.
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.