New Build Property for Sale in Algorfa Costa Blanca

What are the costs of buying in Spain?

Buying a home is an investment in our lives. It is important to calculate all the expenses you will have. In this article we report on the various costs of sale in Spain.

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In our real estate experience we know that when making such an important decision what is involved in the purchase of a housing investment, we must be clear what that entails. Expenses, as you know, do not just include the price of the property, but also payment of the mortgage (if any) and expenses arising from the sale. About the latter, we explain what they are and what they are for:

Expenditure preliminary to the sale

1. Costs of appraisal: When applying for a mortgage, after the loan agreement or transaction, the bank needs to make an appraisal of the property to know that the price fits its value. The cost of this as an approximate cost and is between 100 and 400 euros, depending on the type of house and its square meters.

2. notary fees for the preliminary contract. At the time of making the sale it is very normal that before writing, a preliminary contract between seller and buyer is signed. It is a private contract that ensures the transaction, as it requires both parties to meet the covenants contained therein, provided they are within the law. This, while not mandatory, is very common. Enlisting the help of a notary for these cases will prevent future problems.

Expenses of the transaction

1. Writing the notary public: This is the public deed certifying the change of ownership and, although it is not compulsory to grant a sale, it is advisable, since its effects are specifically regulated by law and, therefore, are more valid than the clauses included in the preliminary contract. To be regulated by law, all notaries in Spain charge the same for the same service, although some can make a discount of 10%.

2. Tax. There are different taxes on the sale of homes. We list the main ones:

- VAT: Only when it is a new build house and the purchase is directly from the promoter. In this case, buyers have to pay 10% tax on the value of trading.

- Transfer Tax: Only if it is a second hand home. If it is a resale property then you must pay the taxes on transfer of assets, which is between 5 and 8% of the deed price, depending on the autonomous region.

- Stamp Duty Tax: It pays for signing at the notary and registering in the Register every deed. It bases the calculation on mortgages it is the mortgage liability and, although the amount varies depending on the type of housing and the Autonomous Community, this ranges from 0.1 to 1.5%.

- The Tax on the Increase in Value of Urban Land, formerly known as local goodwill, taxes the increase in value the land experiences from acquisition to transmission. Unless both parties agree to pay half, this tax is borne by the seller, which has 30 working days from the date of the deed to file the tax return or settlement declaration to be paid at the office of the City.

3. Registration in the Land Registry

The costs of registration in the Land Registry are not fixed and vary with the value of the property, depending on their location and characteristics. The rates are approved by the Government, they can be found in the Official Gazette and rarely exceed 1%.

In the event that this inscription comes from an agency, you must pay the fees of the private agency. Contrary to what happens with notaries, managers rates are not fixed and, therefore, should be well informed before hiring one.

These are the costs of buying in Spain. Do you have more questions? Contact Spanish Sun Golf Properties will help in the search for housing as in any other aspect of the property market in Spain on which you have doubts. We are passionate about Spain, and provide personalized assistance you need.