The expenses and taxes for buying a property in Spain
- Alexandre Strumeyer
- Sep 21, 2023
- 3 min read
Updated: Feb 8
Do you want to buy a property in Spain and more precisely in Andalusia?
Here's what you need to know about the fees, taxes and charges to which the purchase of real estate is subject. You need to budget around 10% of the property’s price to cover these expenses, which are as follows:
Valuation of the property: In case of a mortgage loan application for the purchase of the property, you will be asked for an appraisal of the value of the property. Then, the bank will base the financing on that value. The cost of the valuation depends on the type of property, and generally varies between 300 and 500 euros.
Lawyer’s fees: Using the services of a lawyer to buy a property in Spain is not mandatory but strongly recommended if you do not know perfectly the country and the area where you want to buy and if you do not understand perfectly the Spanish language.
In Spain, the role of the notary is smaller than in others European countries, so it is the lawyers who guarantee the security of the acquisition. Usually the lawyer will charge 1 % of the amount of the purchase.
Notary’s fees: Notaries in Spain charge a fixed fee for granting the public deed and the cost of the same will vary depending on the value of the property and the number of pages of the deed. Usually, this expense is 0.5% of the value of the property. In case there is a mortgage for the purchase, its public deed generates an additional cost.
Registration in the property register: Recording the change of ownership in the property register involves a cost that does not exceed 0.3% of the value of the property.
Taxes: There are two different taxes depending on whether the property is new or used.
For new built properties, the tax you will pay is the VAT at 10%.
For second-hand properties the tax to be paid is the ITP.
In Andalusia there is only one single rate of 7% for taxation on the amount of the purchase of a second-hand property.
The base value for calculating this tax may in no case be lower than the cadastral reference value.
Tax cuts:
There are reductions in this tax under certain conditions:
Rate reduced to 6% if the property is the main residence and its price is less than 150,000 euros
Rate reduced to 3.5% on the transfer of properties whose value does not exceed 150,000 euros intended for the main residence of a buyer under 35 years of age or having a disability level equal to or greater than 33%.
Rate reduced to 3.5% in the case of a large family for a main residence whose price is less than 250,000 euros
Rate reduced to 2% for professional property trader with a period of 5 years to resell the property.
The ITP payment deadline is 30 working days after signing the notarial deed.
AJD: New housing is subject to the payment of another tax, that of documented legal acts (AJD) which amounts to 1,2% of the selling price.
Also the amount of the mortgage loan is subject to this tax.
Management fees: the management agency which will be in charge of the formalities and the liquidation of taxes, charges its services about 400 euros.
Bank check :
It is customary to pay for the purchase of real estate with certified checks from your Spanish bank. The cost charged by the bank is 25 to 300 euros per check. You must therefore choose your bank carefully and negotiate the cost.
Exchange fees and currency transfer:
The cost of changing money from another currency to the Euro (or vice versa) can vary significantly depending on the financial institution you use. It is 2 to 3% of the amount.
And for euro zone countries it is wise to find out about the cost of transferring money to the Spanish bank, the costs vary from one bank to another.
You would like more information on purchasing real estate on the Costa Del Sol or benefit from personalized support throughout your purchasing process.
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