If you are considering buying a property in Spain it is very important to be aware of the total costs of buying property in Spain. If you have purchased a property in the UK or elsewhere then you will be familiar with the requirement to pay expenses in addition to the purchase price in the form of stamp duty and other costs. Spain is no different. It is important, however, to be aware of the total cost of buying a property in Spain before you agree a purchase price.
The costs of buying a property in Spain can be categorised as purchase tax, Notary’s fee, property registry fee and miscellaneous costs including legal expenses. If you are buying a property in Spain with a mortgage then you will find that the costs differ slightly. Similarly if you are buying a property off-plan you will find that the costs vary compared to purchasing a resale property in Spain.
Purchase tax in Spain - Resale property
Purchase tax is by far the biggest expense that you will incur when buying a property in Spain, outside of the purchase price. If you are buying a resale property in Spain, that is a property that has been sold at least once before, then you will find that the amount you will be required to pay varies depending upon the area in which the property is located. In certain areas you will find that the rate of purchase tax varies depending upon the purchase price of the property.
For example, if you are buying a resale property in Valencia for €100,000 then you will pay a purchase tax of 10% of the purchase price, that is total purchase tax of €10,000. If you buy a resale property for the same price in Andalusia, however, then you will pay purchase price of 8% meaning total purchase tax of €8,000. If you were to buy a property in Andalusia for €500,000 then you will pay purchase tax of 9%, meaning that your total purchase tax will be €45,000.
Purchase tax in Spain - New property
If you are buying a new property in Spain, that is a property that has never been sold before, then you will find that the purchase tax is slightly different to the tax relating to a resale property.
Again, the tax varies depending upon the location of the property, but the way that the tax is structured is very different when buying a new property in Spain. Across Spain the purchase of a new property will usually be split into VAT (IVA) and purchase tax (AJD).
For example, if you are buying a new property in Andalusia for €100,000 then you will pay VAT of 10% and purchase tax of 1.5%. This means that the total tax that you will pay will be €11,500. If you purchase a new property in Madrid for €100,000 then you will pay VAT of 10% and purchase tax of 0.75%. This means that the total tax that you will pay will be €10,750.
Clearly, therefore, it is important to be certain when you are buying property in Spain of the exact purchase tax that you will be required to pay before you commit to any purchase.
For more information about what can happen if you do not pay purchase tax at the correct rate when buying a property in Spain, please read this article.
Notary’s fees when buying a property in Spain
In Spain the completion of a property purchase is attended in the presence of a Notary. When you come to buy your property in Spain it is very likely that you will sign a power of attorney to authorise your independent Spanish lawyer to attend the completion meeting on your behalf. Nonetheless the Notary will charge for the work carried out.
Notaries in Spain are subject to strict guidelines that govern the fees that they are permitted to charge in relation to certain transactions. In general we find that the Notary’s fee for a completion meeting in respect of the purchase of an averagely priced property is between €800 and €900. If you are purchasing a more expensive property in Spain then you may find that the Notary’s fee is higher than average.
Property Registry fees when buying a property in Spain
When you buy a property in Spain the property becomes yours at the completion meeting. You will receive the keys on that day and you can begin using the property immediately. There are, however, some administrative steps that need to be taken shortly after the completion meeting. Firstly the purchase tax needs to be paid, and secondly the property needs to be registered in your name as the new owner.
The property registry in Spain is an organisation that keeps a record of who owns what property. When you become the owner the previous owner’s name will be removed from the register and your name will be added. This usually means that you will need to pay an expense of around €500.
Miscellaneous fees when buying a property in Spain
As with any property purchase there are likely to be some small miscellaneous expenses incurred along the way to completion. In general these ought to comprise small amounts payable in respect of your Spanish tax number (NIE), bank fees, courier fees and other expenses associated with making the arrangements to complete a purchase in another jurisdiction. You ought to budget around €350 in relation to these expenses when buying a property in Spain.
Legal fees when buying a property in Spain
The legal fees that you can expect to pay when buying a property in Spain vary depending upon who provides you with legal advice in relation to your purchase. Many Spanish lawyers will charge a percentage of the purchase price.
E&G Solicitors in Spain is pleased to offer fixed fees for most property purchases in order that you can budget with certainty.
More information about buying a property in Spain
We have a wealth of information available in relation to buying property in Spain.
For information about the process of buying a property in Spain, please click here
For information about the pitfalls of buying property in Spain, please click here
We have also prepared a handy checklist that will guide you when viewing properties in Spain.
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