www.propertyinspaingroup.com What costs are involved in buying a property in Spain?
Here I cover the costs of buying a property in Spain to help you decide on a budget.
Have you been deciding on a budget for your property purchase in Spain and wonder what extra taxes and fees you will need to Pay? Here are a few things you need to consider.:
Are you going to pay cash for your property?
Do you require a mortgage?
You are going to be in a much better position to make an offer on a property that you find if you already have been pre-approved for a mortgage in Spain. This will save you time and give you an advantage as the application process can take up to 6 weeks in some cases. But a mortgage will cost you more with broker set up fees, notary and land registry fees and a valuation. You can apply for a mortgage directly through a bank or through a mortgage broker.
Have you set up your currency exchange company?
Check out the current exchange rate and economic situation. Check the rates with a couple of different companies and get signed up and ready with at least one just in case you find a property you like and want to make an offer. It doesn't cost anything to sign up.
How soon do you intend to purchase.? You may wish to set a rate in place with the currency company.
What costs are involved in buying a property in Spain?
The buyer usually pays the fees. They vary from region to region. Many are negotiable – there are no fixed fees for lawyers or estate agents. Costs paid by the buyer include:
Property transfer tax 6–10% (existing properties) / VAT (or IVA) at 10% (new properties);
Notary costs, title deed tax and land registration fee 1–2.5%;
Legal fees 1–2% (including VAT).
The seller usually pays the estate agent’s fees. This is typically their only cost. Estate agents usually charge a percentage, typically around 5% of the final sale price.
In general, you should allow 11% on top of the purchase price to cover the transfer tax for a resale property under 500,000 and notary plus land registry fees (600-1000 euros ) plus 1% lawyers fee. Most lawyers do have a minimum charge of between 1200 and 1500 euros per transaction. So if you are buying under 120.000 euros the cost of purchase will be slightly more. If you require a mortgage you will need 15% on top to cover the 8% transfer tax plus mortgage set up fees and you pay double land/notary fees plus you will have to pay for a bank valuation. The sale of Land has a 21% tax.
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