There are many things that you have to consider when buying a property in Spain. Like the city you want to live in, the type of property you need, the neighbourhood, schools and hospitals nearby… and the list can go on and on.
However, there are some critical facts in the latest stage of the buying process that we need to consider.
And these are The Closing Costs.
You have found the house of your dreams, and you can’t wait to move in and start enjoying your new life. But before that, you will have to take care of the final details of the purchase. We will guide you through them to have an idea of what to expect when the time to close the deal comes.
These are the expenses you will have to pay to the notary, the lawers and the land registry. Please consider that these are just an example and that you might find slight variations when you go through the process.
Notary Fees: about 0,3% of the purchase price
Land Registry Fees: around 2/3 of the Notary Fees
Lawyers Fees: Generally, 1% of the purchase price
Once you have dealt with these, we need to take care of taxes. Taxes vary depending on the region and city in which you are going to purchase your home. In addition, there are different kinds of taxes depending on whether you buy a resale property or a new development one, and taxes that apply to both types of property.
We will go through them and show you some examples.
You must pay all the taxes arising on purchasing a property within 30 working days of signing the deed. Beyond this period, the buyers will have to pay a surcharge of 5, 10 or 15% of the tax, depending on each case. All foreign buyers must have an NIE (tax identification number) in order to pay taxes.
As we said before, you will have to apply different taxes depending on the type of property.
a) Resale Properties:
Transfer Tax (impuesto de transmisiones patrimoniales)
Any amount up to 400.000€: 8%
From 400.000€ to 700.000€: 9%
Any amount in excess of 700.000€: 10%
As an example, the purchase of an apartment for 750.000 euros would pay the following transfer tax:
For the first 400.000€ 32.000€
The remaining 300.000€ (from 401.000€ to 700.000€) 27.000€
The remaining 50.000€ (from 700.000€ to 750.000€) 5.000€
b) New development
VAT (“IVA” ): 10% of the purchase price.
Stamp Duties (Actos Jurídicos Documentados): 1,2% of the purchase price
C) Common Taxes (Resales Properties and New Developments):
Plusvalía (Municipal Tax on the increase of land value): by law, this is the vendor’s responsibility, but both parties can agree that the buyers will pay it. The amount depends on the cadastral value of the land at the time of the sale and the period of ownership. The taxable base is a percentage of this cadastral value which varies from 3,7% to 3%. Each Townhall fixes the tax rate with a maximum of 30%
Stamp Duties (Actos Jurídicos Documentados): 1,2% of the principal loan secured by the mortgage, plus interest and budget costs in the contract in case of non-payment.
Once you are done with this list, you can lay back, relax and enjoy your new property in Spain.