Costs of Buying Real Estate in Spain: Taxes & Fees

The cost of buying a property in Spain differs depending on whether you are purchasing a brand-new or a resale property. If it is a brand new one from the developer, you need to pay VAT. If it is a resale property, you need to pay ITP. Both of them cannot be applied at the same time. The cost of buying a house in Spain also vary by property type, region, purchase price, payment conditions, and so on.

Spanish property purchase costs usually range from 9% to 14% of the sales price. According to the real estate that a buyer purchases and the region, prices might vary significantly, as we previously mentioned.

All costs and taxes are listed in detail below;

• VAT (IVA) in Spain
• Property Transfer Tax (ITP)
• Stamp Duty or Legal Documentation Tax (AJD)
• Lawyer Expenses
• Notary Fees
• Land Registry

Detailed Explanation of the Costs & Fees

1. VAT (IVA) in Spain

A brand new property is one that has never been sold before; in this situation, it is usually sold directly by the developer. If it's brand-new, the tax will be VAT. Except for Canaria Island, all regions of Spain have a 10% VAT when purchasing a brand new home. On purchases of land and commercial properties, VAT is 21%. Parking lots with separate title deeds are subject to a 21% VAT since they are regarded as commercial property. (Impuesto sobre el Valor Añadido)

2. Property Transfer Tax (ITP)

If you are buying a second-hand property, you need to pay ITP tax. It is usually between 7 and 10%. It could vary depending on the value of the property or the autonomous region. (Impuesto sobre Transmisiones Patrimoniales)

3. Stamp Duty or Legal Documentation Tax (AJD)

It is a tax you pay for all documents to be notarized. The cost can vary between 1,2% and 1,5%. It may differ depending on the autonomous region. It is applied to land and brand-new property sales or if a mortgage is used for second-hand property. If you buy a second-hand property without a bank loan, this tax is not applied. (Actos Jurídicos Documentados)

4. Lawyer Expenses

Lawyers commonly charge 1% + VAT. Although working with a lawyer for property purchase in Spain is not legally required, we strongly recommend it to keep the process running smoothly.

Especially if you work with a real estate company with corporate lawyers who specialize in the real estate sector, your entire process will be extremely comfortable and easy since they will explain all of the essential steps and assist you in the preparation of documents.

Additionally, you may give them power of attorney so they can act on your behalf and you will not have to be there during the buying process.

5. Notary Fees

When making a purchase agreement at the land registry office, it is required that the agreement be signed in front of a notary public. It usually costs around €1.000-€1.500.

6. Land Registry

A title deed registration typically costs approximately €750. It may vary depending on the property's purchase price.

Getting a Mortgage For Spanish Property

In addition to all the costs of buying a house in Spain listed above, using a house loan also comes with some additional mortgage costs. The cost of a notary public also goes up.

Valuation

The cost is determined by the appraisal company and the purchasing price. It is usually between €350 and €600.

A property valuation is a must to get a mortgage in Spain. The appraisal report must be prepared by a registered valuation company. The real worth of the property is determined by the report, and a certain portion of this value is used to calculate the mortgage amount.

Disbursement Fee

Depending on the bank, it may range from 0% to 1%.

Spain property purchase costs listed above are average. You can get the exact pricing from TEKCE professionals. You can contact our Spain property experts or visit our nearest office to learn more.

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