Buying a property in Spain involves certain costs in addition to the purchase price. As well as taxes, you will need to pay fees for professional services, adding up to a total of between 10% and 15% on top of the purchase price. Also, if you require a mortgage, you will have to allow 30-40% of the property value to pay a deposit, as Spanish banks would generally finance 60-70% of the purchase price for non-resident buyers.
Below is a detailed breakdown of the typical costs involved in buying a property in Spain:
Taxes
Spanish property taxes vary depending on whether you are buying a new home or a resale property. New refers to a newly built property that has never changed hands before (it is usually sold directly by the developer). Resale refers to homes that have been sold at least once before.
New Build Properties
- VAT (IVA in Spanish) at 10% of the purchase price. This also applies to parking spaces and storage rooms, if not already included in the purchase price
- Stamp Duty (AJD in Spanish) at 1.2% of the purchase price in Andalucía
Resale Properties
Transfer Tax (ITP in Spanish) at 7% of the purchase price in Andalucía
Professional Service Fees
Notary Fees
The Notary charges for preparing the title deeds for the sale and witnessing the signature of the deeds by both parties. Fees are calculated depending on the purchase price and the complexity of the title deeds. It is usually around 0.5-1% of the purchase price.
Land Registry Fees
The Land Registry (Registro de la Propiedad) officially records the ownership of the property in your name once the purchase has been completed. For this, fees of between 0.5% and 1% are charged, depending on the purchase price.
Legal Fees
Using the service of a lawyer during the purchase process is highly recommended. Expect to pay around 1% of the price for legal services, more if the purchase involves complex negotiations or legalities.
Gestoría Fees (optional expense)
It can be useful to use a Gestoría for paperwork and administrative services. A Gestoría generally charges a set fee for their services which can be from 300 -500 EUR and is responsible for several tasks including:
- Ensuring taxes are paid on your behalf.
- Collecting the deeds from the Notary and taking them to the Land Registry for registration in your name.
- Registering you for local council taxes and community charges.
- Transferring utility supplies to your name and setting up a direct debit for their payment.
In some cases, your lawyer will organise Gestoría services and include them in their legal fees.
Banking Costs
If you are transferring money to Spain from your bank account in your home country, you may incur fees on the transaction, especially if you are transferring from a different currency to euros. Using the services of a specialist currency exchange broker can reduce bank charges. Banks also charge for issuing the banker’s draft used to make the payment for the property when you sign the title deeds at the Notary. Check with your bank before you order a banker’s draft
Mortgage Fees
If you require a mortgage to buy your property in Spain you’ll need to include bank charges in your budget. You will have to pay for a valuation – normally between 250 and 600 Euros depending on the company carrying out the process, the type of property and its valuation – plus the mortgage costs themselves. These depend on the type of mortgage and the amount loaned.
By planning carefully and understanding the various costs involved, you can ensure a smooth and transparent property purchase in Spain.
Would you like to know more? Please contact me if you would like further guidance on this subject or want to know anything else about acquiring your ideal property in Marbella and living its lifestyle.
