31 Jul Costs in connection with property purchases
When buying a home in Spain there are costs and taxes that must be paid.
When buying a home from an existing property owner, i.e. a property that is already built:
- Transfer tax (impuesto sobre transmisiones patrimoniales, ITP) of 7% regardless of the price.
- Notary fee which can vary due to various factors but which is normally approx. 0.5% of the purchase price.
- Registration fee for the registration of the purchase in the property register. Here too, it can vary, but a good rule of thumb is 0.5% of the purchase price.
- Finally, you have a cost to your lawyer of 1% of the purchase price.
When buying a completely newly built property, where you are the first owner:
- 10 percent in Spanish VAT (impuesto sobre el valor añadaí).
- 1.5 percent in stamp duty.
- Notary fee which can vary due to various factors but which is normally approx. 0.5% of the purchase price.
- Registration fee for the registration of the purchase in the property register. Here too, it can vary, but a good rule of thumb is 0.5% of the purchase price.
- Finally, you have a cost to your lawyer of 1% of the purchase price.
Costs if you take out a mortgage loan in a Spanish bank:
In Spain, the mortgage must be registered as a separate deed and notarized. After this, it is registered in the property register. Previously, until June 2019, it was the borrower who was responsible for all the costs of the notary, the land registry and the transfer tax. After this date, the bank must cover all these costs. It is very positive as the borrower saves approx. 2% of the total amount of the loan. The following must still be paid by the borrower:
- Set-up cost of 1% of the loan amount.
- The bank's valuation of the property costs between 300 – 500 euros.
