Buying a property in Spain entails certain costs in addition to the price of the property. As well as taxes, you’ll need to pay fees for professional services bringing the total to between 10% and 15% extra. These are explained below so please do not forget to factor this figure into your budget for the purchase.
Property purchase taxes in Spain are between 8% and 11.5%. Which taxes and how much you pay depend on the value of the property and whether you’re buying a new or resale property.
The purchase of a new build (a property being sold for the first time) involves the payment of VAT which is 10% of the price, plus 1.5% Legal Documentation Tax. This brings your total tax bill to 11.5% if you’re buying a new property in Spain.
If you’re buying a resale property (one that has already changed hands at least once), you’re liable for transfer tax that is levied on a sliding scale depending on the purchase price. On the Costa del Sol, you pay between 8% (on properties priced below €400,000) and 10% (on properties priced over €700,000).
In addition to taxes, you’ll also have to pay certain fees when you buy in Spain. These are:-
1. The notary charges for preparing the title deeds for the sale and witnessing the signature of the deeds by both parties. Fees are calculated depending on the purchase price and the complexity of the title deeds. Factor in between 0.5% and 1% of the price.
2. The Land Registry officially records the ownership of the property in your name once the purchase has been completed. For this, fees of between 0.5% and 1% are charged, depending on the purchase price.
3. Using the service of a lawyer during the purchase process is highly recommended. Do this before you pay a deposit or sign any legally binding paperwork on the property. They will carry out due diligence on the property, arrange your NIE (national identification number), represent you in front of the notary and in public identities. Expect to pay around 1%+VAT of the price for legal services.
Please Note: On the Costa del Sol, real estate agency fees are usually paid by the seller, you don’t need to budget separately for them in your calculations.