Where should I buy? Schools in Spain? Healthcare? Legal fees? Please browse through this section for helpful
hints and answers to all your questions on buying property in Spain.
Costs of Buying Property in Spain
When buying a property in Spain there are a number of taxes and fees applied to the purchase
which must be taken in to account and planned for financially in order to avoid any problems.
As a general rule of thumb, allow for 10% of the purchase price of property in Spain to cover
the various taxes and legal fees. These taxes and fees are paid at the time of completion and
signing of the deeds at the notary. The costs of buying Spanish property break down as
follows:
Taxes Applied When Buying Spanish Property
IVA (Impuesto sobre el Valor Añadido) equivalent to VAT
New property in Spain sold directly by a developer are subject to VAT, the rates being 7% of
purchase price in the case of property for private use (villa, apartment etc) or 16% for
property designated for commercial use, and for plots of land without any buildings. The rate
for new garages and parking spaces is also 16%.
AJD (Impuesto sobre Actos Juridicos Documentados) equivalent to Stamp Duty
This tax applies to new properties and is approximately 1% of the value stated in the purchase
contract, although there are regional variations.
ITP (Impuesto sobre Transmisiones Patrimoniales) - Transfer Tax
Transfer Tax is applied to resale or second hand properties, generally at 7% (although again
there are regional variations) of the declared value of the property in the purchase contract.
Resale or second hand property in Spain is subject to IVA and stamp duty is included in this
tax. This tax is paid by the buyer to the notary at the time of completion.
Plus Valia Land Value Appreciation Tax
This tax is a capital gains tax levied on the increase of the value since the sale of the land
on which the property is built. It normally doesnt amount to much (less than a couple of
hundred Euros) and is usually paid by the seller unless the purchase contract specifically
states otherwise.
Legal Fees for Buying Spanish Property
El Abogado Lawyers Fees
The fees charged by your lawyers will vary depending on which services you have instructed
them to carry out. Normally, the conveyancing fees are charged at a percentage of the value
of the property allow 1% as a general guide. Always get a quote before instructing your
lawyer and make sure you are aware of what services are included in the quoted price.
El Notorio - Notarys Fees
The notary acts as the public official when signing the public deeds. The notary charges a
standardised fee for the preparation of the escritura or title deed which varies according
to the amount of land involved, the size of the property and the declared value of the
purchase. Allow approximately 0.5% of the value of the purchase to cover notarys fees when
buying property in Spain.
Gastos De Inscripción - Land Registry Fees
When the relevant taxes have been paid the deeds for your Spanish property will be registered
at the Land Registry. A fee is payable to the Land Registry for the inscription of the title
deed in your name. This fee varies depending on the value of the property; allow 40% of the
notarys fees as a general guide.
Other Costs to Consider When Buying Property in Spain
Bank Charges
Make sure you are aware of the fees involved if taking out a mortgage. Generally, mortgages
on Spanish property are more costly to set up than the equivalent in the UK but take advantage
of the lower interests available in Spain. There may also be charges for transferring the
capital sum if making a cash purchase. For further information regarding mortgages fees
<click here>.
Utility Connection Fees
If the utility services such as water, electricity and telephone have not been connected
there will be a fee for doing so. Check that the property has a C�ula de Habitabilidad -
an occupancy certificate, as this will be required to contract any of these services.
Community Charges
If the property you are buying in Spain is part of a community such as an apartment in a
complex or a villa on an urbanisation, there will be annual maintenance and service charges
to pay. The charges will vary according to the size of the complex, whether there are lifts,
communal swimming pools, gardens, tennis courts etc.
Basura y Alcantarillado - Local Tax for Mains Drainage / Refuse Collection
This is paid annually to the local government collection agency an usually a small amount,
less than 100 per annum.
Impuesto sobre el Patrimonio - Wealth Tax
The first 108,132 is tax-free for residents. In addition, residents enjoy an exemption of
150,293 on the value of the principal home.
After this:
0 - 167,129 is taxed at 0.2% per annum
167,129 - 334,247 is taxed at 0.3% per annum
IBI (Impuesto sobre Buenes Inmuebles) - Impuesto sobre Buenes Inmuebles (IBI)Local Property Tax
An annual tax based on the rateable value of the property. Rates vary between different local
authorities but are usually between 0.5% - 1.0% per annum.
Removals Costs
If you want to move your furniture and belongings make sure you get a quote for removals fees
and factor this in to your calculations.
Making the right investment is key and if you pick the right investment,
you could be in for a handsome return.
Where should I buy? Schools in Spain? Healthcare? Legal fees? Please browse through this section for helpful
hints and answers to all your questions on buying property in Spain.
When buying a property in Spain there are a number of taxes and fees applied to the purchase
which must be taken in to account and planned for financially in order to avoid any problems.
As a general rule of thumb, allow for 10% of the purchase price of property in Spain to cover
the various taxes and legal fees. These taxes and fees are paid at the time of completion and
signing of the deeds at the notary. The costs of buying Spanish property break down as
follows: