The following information is only supplied as a general guide. In Spain, as in any country, always seek professional advice before entering into any contract.
Buying a property in Spain involves a large amount of paperwork. With this comes a number of costs. As a guideline you should add 10% to the declared purchase price of the property to cover this. Costs are as follows:
This is the one which will hit your pocket hardest. 6% is payable on a resale property. 7% IVA (VAT) and 1 - 1 1/2% Stamp Duty is payable on a new property. 16% is payable on the purchase of the property if you buy new and intend to have a pool or garage built at a later date. Try and have these included with the sale of the property as if you build later you will attract tax at the higher rate of 16%.
These are set on a fixed scale by law and you should expect to pay around 300 Euros. This should be considered more of a minimum, however, as arranging these through a bank can raise the figure to around 500 Euros.
Probably the best investment you will make. Buying without a solicitor's advice could cost you dearly. Expect to pay around 600 Euros on a property purchase of between 60,000 and 120,000 Euros as a minimum estimate. Savings can be realized if you use a smaller local law firm. These have the same legal "clout" as a full blown international firm but can cost substantially less.
For having the property deeds inscribed to your name at the Registrar you can expect to pay between 120 and 300 Euros. Registration is two parts, once with the Property Registry, and the other (rates) is with the local town hall (IBI).
Who Pays What?
Spanish law states (unless stipulated in the contract) that taxes and fees are split between the buyer and seller as follows:
- The Transfer Tax or IVA (aka "VAT")
- Property Registration Fees
- Notary Fees for the drawing up of deeds, and signing.
- Peripheral Costs - associated with legal fees (if you do not have a lawyer, this is optional, but not recommended), water and electricity changeover fees, transfer of funds, etc.
- Plus Valia Tax (Capital Gains), which is calculated on the increase in value of the land since the last sale, if the property is a resale.
- The Estate Agent Fees (pre-marketing, & additionaly the commission or pre-agreed price associated with the property, per agreement or contract of sale).
- Any outstanding taxes, community fees, liens or mortgages, unless otherwise specified.
These rules are not followed rigidly and it is often the buyer who ends up footing the bill for most of them. In Spain all debts on a property stay with the property why it is sold, another good reason to employ a solicitor to discover any "nasties" are hidden away with a property.
The paperwork in Spain is a VERY complex thing and only the people who write the laws (and solicitors) have a true understanding of it.
Although there are a number of books written about the subject, these should only be used as a way to gain a basic understanding and are useful in this respect.
Every property has its own category and location and is taxed accordingly. In other words, each varies, but there are general rules that can be applied to certain types (apartments will pay less than a house, for example). Your solicitor should be able to give you estimates where applicable.
The above information is only supplied as a general guide. In Spain, as in any country, always seek professional advice before entering into any contract.
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