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Buying a property in Spain can be one of the most important investments in life, it has several costs for the buyer. Knowing the costs that must be paid is one of the issues that may surprise us most. Although it depends on each Spanish region, the costs are around 8% to 15% of the price of the property depending mainly on whether a mortgage is taken out or if it is paid in cash.

Let’s take as an example a property at a selling price of  € 200,000.

There are 2 cases for buying costs based on if you buy a new home, or if you buy a second- hand property.

SPANISH NEW HOMES

1. The VAT is paid on the property (first transmission): 10% if it is free of tenant and 4% if the property has a special regime of official protection. This VAT has also to be paid on the parking bought together with the property with a maximum of 2 parkings. In our example lets take a cost of € 20,000.

2. Jurisdictional Acts Tax (AJD), varies between Spanish regions, it is in between 0.5% to 1.5%. This is a tax on documents attached to the property transaction and is a percentage of the value of the property. In our example it would be between € 1,000 and € 3,000.

SPANISH RE-SALE PROPERTIES

ITP
The main cost when  you buy this type of property in Spain is the Tax of Patrimonial Transmission (ITP) which is paid when a second-hand house is acquired or second transmission. It may happen that it is a dwelling where no one lives, but a transmission has already been made to a financial institution, for example, then it is called a second transmission. The ITP tax is applied to the registered value of the property and it is between 6 to 10%. In this case between 12,000 and 20,000 euros.

In Barcelona it is 10%, in Madrid 6%. In Galicia it is 4, 7 оr 10% depending on the ecological situation of the buyer. In the Canary Islands it is ruled by the IGIC at a lower rate.

ОTHER CОSTS: notary fees, property registry, lawyer, accountant and tax adviser (gestoria)

Notary fees: (450- 1000 euros) These are the costs for drawing up the deeds called the Escritura, the buyer usually pays he full amount. This cost is officially fixed based on the value of the property.

Property Registry costs: (400-650 euros) It is a standard fee based on the selling price of the property in the deeds. In this case, there would be around 400 euros.

Gestoria costs: (250 -500 euros) The Gestoria is a bookkeeper that helps tax payments and paperwork who formalizes the deeds of the property and mortgages.

Lawyer: (around 2 000 euros) It is highly recommended to use a lawyer for your transaction who will verify all the paperwork and the status of the property you are buying in the property registry and in the cadastro.

SPANISH MORTGAGE COSTS: property valuation, AJD tax, property registry, notary fees, bank fees, property insurance

If you ask for a mortgage as a local resident you could get up to 80% of the value of the property, as a non-resident probably max 50%, there are therefore more costs involved.
Property valuation (tasacion):  (500 – 800 euros) The bank will ask you to provide a valuation of the property, the cost will be based on the value and size of the property.

Tax: Jurisdictional Acts Tax (AJD) in between 0,5% and 1,5% of the buying price of the property. In this case it is between € 1,000 and € 3,000

Property registry: (250- 300 euros) the official document for the mortgage (escritura de hipoteca) will be registered there.

Nоtary fee: (450- 510 eurоs) They are calculated on the basis of the hypothesis.

Bank fees: (0- 3200 euros in our example) Mortgage set up fee upfront usually between 0% and 2% of  the mortgage capital.

Property insurance: the bank will oblige you to take some insurances on the property.

Do not hesitate to contact us for any questions on this article.