If you're buying a new property in Spain you'll need to know about the purchasing costs you'll encounter as part of the process.
Here we take a look at what you can expect to pay.
What are the overall costs of buying a property in Spain?
You can typically expect to pay 11-14% of the cost of the property you're buying in purchase or closing costs, depending on the region of Spain, and the type of property. If you have a Spanish mortgage you need to add an additional cost of 2% to 4%. There will also be costs for obtaining an NIE number and connecting utilities. But the ballpark above includes Transfer tax (ITP), equivalent to stamp duty, calculated on the property purchase price and between 6.5% and 10%, depending on the region.
The estimate also includes the Notario’s fee of around 0.5% of the purchase price, which tends to range from €300 and €1200.
Land Registry fees in Spain tend to be between €400 and €600 – or 0.4% of the purchase price. Legal fees are usually a percentage of the purchase price – generally 1% plus VAT– but with a minimum fee. Typically this might be €1,000 to €2,000.
VAT on new-build properties in Spain is 10% and stamp duty on new-build is 1.5% of the purchase price.
Tax and fees
The tax you pay when you buy a property in Spain will normally depend on whether you are a tax resident there or not. Tax residence is determined by a number of factors – including how long you spend in that country, if your main home is there and whether your main economic interest is there. If you become a tax resident in Spain, then you would normally stop paying taxes in your home country and pay there instead. IVA (VAT) is payable by the purchaser when the vendor is considered a developer who pays IVA and/or this is the first time the property has been sold or transferred. The VAT rate depends on the type of property being sold: it’s 10% for residential properties and 21% for plots of land and commercial premises.
Stamp duty is payable at the rate of 1.2% where VAT is payable. If the house you’re buying is a resale (second transfer) property, then you will also need to pay Transfer Tax (Impuesto sobre las Transmisiones Patrimonilaes), which is usually between 8 to 10% depending on the values of the property and the area. This will need to be paid to the Spanish Treasury within 30 days of the date the title deed is signed. You may also need to pay Plusvalia, which is a tax based on the increase in the value of the land since the last transfer, although this is not normally a huge amount.
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