When buying a property in Spain, first of all and in order to identify our costs, we will need to differentiate between buying from a developer or buying from a private individual. In this case, we analyse a buying operation without mortgage
There are many costs that will remain the same whether buying from a private owner or from a developer/bank, so in first place we will enumerate the costs that remain the same and after the different ones. It is an important reminder also that the price of the buy is not the first one, added costs like taxes or public documents can add up to 12-15% of the original price.
Real Estate Agent fees
This charge is normally held by the seller and it can be from 2% to 5% so it is necessary to choose the agency very carefully, in rare occasions, part of the agency fees can be held by the buyer and this is when the buyer has contracted the agency in order to find a property.
Survey/ independent valuation
Market prices are normally in constant flow and the buyer must be completely satisfied of acquire, in order to guarantee it, an independent professional advice it’s a good idea. Prices are not always the same and they may vary depending on the type of property, difficulty on it etc. An amount between 500-1.000 euros, plus IVA (VAT) is the minimum cost of this service.
An essential part of this process is legal advice and help through all the buying documentation, legal requirements and to deal with public bodies. For that reason, a fully legal covering is strongly recommended. When hiring a lawyer to help us through the process buying it’s important to choose experts in real estate law, contract and property law. The fees charged will normally be adjusted to a minimum and it will vary from 1-2% plus IVA the difficulty of the process will affect the final price.
Notary Public Expenses
Along with the fees derived from the hired lawyer come the fees from the notary. They will normally be held by the buyer as the common practice in Spain says. The price will be fixed regarding the value of the property and in the complexity of the asset. They are normally around 0.5-1% plus IVA of the final price.
Land Registry Inscription Fees
This fee will be also bearded by the buyer. Like most of the fees here calculated, the Land Registry will also depend of the size of the property, complexity and so on. We will recommend being ready to pay up to 1% of the deeds, however, depending on size and area the fee can be considerably lower.
First of all, you must get the NIE number, after this, opening a bank account in a Spanish bank is mandatory. Banking fees are several and expensive in most of Spanish banks. When is about different currency there will be a currency exchange fee that can add up to 3-5%. Some banks charge fees also for transferring euros above a specific quantity, so it might be a good idea to make several but small transfers. There will be further charges depending on the operation made with the bank, as an example, banks will also charge for issuing the bankers’ draft of completion that can cost itself 0.25-1% of the price.
Taxes derived from buying from an individual
Tax Retention on a Spanish property transfer
This is an important tax to bear in mind with when buying a property in Spain from a non-resident owner. When this happens the buyer has to retain a 3% of the declared purchase price that will be handed to the Spanish Tax Authority. If this is not done, the property will be considered as the asset backing the capital gains tax liability of the seller.
If the property we are about to buy is deemed to be the second or posterior transfer the buyer has to pay an extra tax. The whole amount of this debt has to be paid upon completion. The tax in Andalusia is 8%.
Taxes derived from buying from a developer
IVA (VAT) & Stamp Duty
Contrary of what we have seen before, this tax applies to those properties that have never been occupied before; they have to be, of course, residential properties. This tax has the character of national so is the same amount in every region of Spain. The current percentage of VAT is 10% for residential houses and for commercial plots and lands increases to 21%.
The second part of this tax is the stamp duty and it varies depending of the region. It will also be held by the buyer and it will be 1% of the price in Andalusia.
NOTICE: The information shown above is for guidance only (it does not have legal or binding power), and it does not replace under any circumstances legal advice from a legal professional.