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Purchase costs

Despite of personally answering all of your questions regarding buying a property on the Costa del Sol and through our Legal Advice Department, we would like you to use our website as well to give you information regarding the basic questions you might have regarding a property purchase, such as here the purchase costs. Through many years of experience, our clients have visited the Costa del Sol with a good underpinning of knowledge thanks in part to our information.

 

For many of our clients one of the first questions is:

 

How much are the one-off initial purchase costs when buying property in Spain?

 

To answer it correctly, we have to look at different purchase scenarios, that lead to the different lists of initial purchase costs.

 

When buying a RESALE property WITHOUT finance / mortgage

 

When you purchase a resale property in Spain, meaning a property that has already been sold at least once before, you will have the following one-off additional purchase costs:

 

As a general rule we count with approximately 10 % additional purchase costs. They can increase a little bit, if the property is of higher value, due to the rising acquisition tax, as you can see in the following scheme:

 

Amount: Type of Tax/Fee: Comments:
8 %
9 %
10 %
Transfer Tax “ITP”
(Impuesto de Transmisiones Patrimoniales)
Property acquisition tax,
8 % on the part of the purchase price from 0-400.000 €
9 % on the part of the price from 400.000 – 700.000 €
10 % on the part of the price above 700.000 €
1 % plus 21 % VAT Lawyers’ Fees The 1 % fee may be negotiable, depending on the value of the property (e.g., if the property has a very high purchase price), but always add 21 % Spanish VAT, so here 1,21 %.
Approx. 0,5 % Notary Fees Depends on the property value and number of pages in the Notary Purchase Deed
Approx. 0,375 % Land Registry Fees For the inscription of the Notarial Purchase Deed into the Land Registry

 

Please be aware that the property acquisition tax is payable on the HIGHER of the real purchase price or what the Tax Ministry considers to be the “Fiscal Value” of the property. By Law the Tax Ministry has the right to value the price of a property according to its estimation. This value could be higher than your purchase price, for example, when you are buying at a very reduced price.

 

We can calculate the fiscal value for you, to check whether or not the transfer tax would be applied to the purchase price or a higher fiscal value.

 

Once we have found your dream property, we will, of course, provide you with a detailed list of the one-off initial purchase costs for that specific property. 

 

When buying a RESALE property WITH finance / mortgage

In this case you will have to sign two title deeds at the Notary appointment: the purchase title deed and the mortgage deed.

In addition to the above-mentioned one-off purchase costs of approximately 10% without finance you have to add the costs for:

 

  • Mortgage Opening Fees from the bank / broker fees
  • Fees for the bank’s department that will deal with the paperwork involved in issuing the mortgage deed
  • Costs of the bank valuation for the property

 

We cannot estimate these costs, as they completely depend on the bank and product you will use. In each case they will be different. Our specialist mortgage adviser will be very happy to detail the costs of the best offers she will find for your personal situation in the vast range of entities and products she can independently introduce to you. Please read more about this under our section Finance / Mortgage. In case you would like to have a free consultation with her, please do not hesitate to CONTACT US.

 

 

 

When buying a NEW property, OFF-PLAN, or ready built from a DEVELOPER, WITHOUT finance / mortgage

 

When you purchase a NEW PROPERTY directly from the DEVELOPER, (off-plan, in process of construction or already finished, yet still on the name of the developer’s company in the Land Registry), you will have the following one-off additional purchase costs:

 

As a general rule we count with approximately 13,5 % additional purchase costs.

Amount: Type of Tax/Fee: Comments:
10 % VAT = Value Added Tax In this case the property acquisition tax is 10 % VAT the developer has to charge you and then declare and forward it to the Tax Ministry. (This applies already to each single stage payment, so at the end you will have paid 10 % VAT on the full purchase price.)
1,5 % AJD = stamp duties Tax to be paid to the Land Registry Tax Office when the Purchase Title Deed has been signed at the Notary.
1 % plus 21 % VAT Lawyers’ Fees The 1 % fee may be negotiable, depending on the value of the property (e.g., if the property has a high purchase price), but always add 21 % Spanish VAT, so here 1,21 %.
Approx. 0,5 % Notary Fees Depends on the property value and number of pages in the Notary Purchase Deed
Approx. 0,375 % Land Registry Fees For the inscription of the Notarial Purchase Deed into the Land Registry

 

 

When buying a NEW property, OFF-PLAN, or ready built from a DEVELOPER, WITH finance / mortgage

 

As explained in the case of a resale property (further above), in this case you will have to sign two title deeds at the Notary appointment: the purchase title deed and the mortgage deed.

In addition to the above-mentioned one-off purchase costs of approximately 13,5% without finance you have to add the costs for:

 

  • Mortgage Opening Fees from the bank / broker fees
  • Fees for the bank’s department that will deal with the paperwork involved in issuing the mortgage deed
  • Costs of the bank valuation for the property

 

We cannot estimate these costs, as they completely depend on the bank and product you will use. In each case they will be different.

 

In the case of new developments many developers have already a pre-agreement for the mortgage conditions their bank would offer to clients who buy in the complex, yet you are not obliged to use that mortgage. It is well worth to compare its conditions with the ones of other entities.

 

Our specialist mortgage adviser will be very happy to find the best possible solution and product for your personal situation in the vast range of entities and products she independently works with and can introduce to you. Please read more about this under our section Finance / Mortgage.

 

In case you would like to compare the conditions of the developer’s mortgage option to others available to you in the market, please do not hesitate to CONTACT US.

 

We understand that this chapter of one-off initial purchase costs involved in a property purchase contains a lot of chapters and new information that most likely is very different to what you are used to in your country. Therefore, if any questions arise, please always feel free to CONTACT US . We are more than happy to help you!