Do you know what are the total costs when buying a property in Spain?
Transaction fees and taxes:
In Spain there are transaction fees and taxes which must be paid when buying and selling a property in Spain – ITP property Transfer and VAT tax, capital gains tax, notary fees, registration fees at the property register and mortgage fees (if applicable).
SpainForSale.Properties, real estate agency in Marbella, explains below the estimation of the costs you need to include in you budget when buying a property in Spain.
When buying a new development the tax (VAT) is 10% based on the purchase price. Then you need to add another 1,5 % of the purchase price for stamp duty and usually 1% more to the lawyer of the purchase price.
When buying a used property, a resale property the taxes are calculated diffenently. In Andalucia the amount of taxes (ITP) starts from 8% up to € 400,000. Next 300,000 € is subject to 9% and after this it is a blanket charge of 10%. With resales the Notary fees and registration may vary from 0.5% – 1% of the purchase price, so this needs to be added to your budget, plus the lawyer fee of 1%.
To make sure you know exactly how much you can spend. This will help you focus on properties you can buy, which can help you save time and money.
– Notary and Property Register
There isn’t a fixed percentage or fee for these two costs. Between 600e and 800e should be set aside for the Notary’s costs and 500e for Land Registry.
– Sundry costs.
Many small expenses must be borne in mind such as bank charges or commissions for transferring money, Power of Attorney to your lawyer, etc. The amount you should expect to pay is in the region of between 300e and 400e. In addition to the above mentioned, you must allow approximately 10% on top of the property price to cover the conveyancing expenses. Loans and / or mortgages have not been considered.
– Taxes and Expenses on Mortgage.
The purchase of a property in Spain can sometimes involve the setting up of a mortgage. It is important to establish the costs and expenses involved in setting up a mortgage, in order to avoid any possible misunderstandings or difficulties.
– Mortgage Title Deed.
The fee is calculated depending on the amount of mortgage liability, copies, pages of the original document and the application of the notary fees in force at the time of completion. Stamp Duty: 1% of the mortgage liability.
– Land Registry Costs.
The amount of the registration cost is also calculated on the mortgage liability, copies of the land search note, authorised copies and the application of the notary fees in force at the time of registration.
– Taxes on Holding Property.
Council Tax is currently calculated on a percentage of the rateable value. For example, a 200.000e property with a rateable value of say 100.000e may attract around 450e in tax. Non-residents property Income Tax: The base rate is 2% of the rateable value and the applicable tax is 25%.
Taxes and Expenses SELLING a Property / Legal costs
A percentage of around 1% is to be expected or a fixed rate.
– Capital gains tax. (*for sellers).
This is based on the difference between the purchase and selling price. Purchase price is not only the net property price but also the taxes, fees or any other costs incurred on the purchase. On the selling price any selling costs (commissions, fees, etc) can be added. The difference, once indexed according to inflation rates, is taxed at a flat rate of 18%. If the vendor is a NON RESIDENT, the buyer must withhold 3% of the price to be deposited at the Revenue as part of the final 18% of the Benefit / Plusvalía.
This small Council tax is usually paid by the vendor although it could be agreed that the buyer pays it.
– Below you can find some international, well known, luxury Real Estate and financial Webs:
Choose a property and any of SpainForSale.Properties, real estate agents, will be delighted of calculating the buying costs for you.