It is always convenient to take into account the specific rules of the tax and legal system of each country when purchasing a property.
Depending on the particular circumstances of each transaction, we offer to you as a guide, the summary procedure of buying and selling in Spain.
Once you have decided which property you want to purchase, you should together with your real estate agent request all the information related to the property: urbanist situation, General plan (PGOU), if there is an existing mortgage, what are the costs of community, IBI and what are the costs involved in buying a house in Spain.
Our recommendation is to use a lawyer who will carry out all of these tasks and will be responsible for the drafting of the contract of sale between the parties involved, i.e., between the seller and the buyer. Reflecting the particular circumstances of the transaction and where will be referred to any deposit handed over, as well as, the terms in date and amounts agreed to sign the title deed with the notary assigned. Very important data to also be included in the contract is the form of payment of certain taxes arising from the transmission of the property.
Once the document is signed, it will be time to have prepared the sum corresponding to the purchase of the property and check again all the details before the signing of the Title deed in notary. Always keep in mind that the pending amount must be paid before or at the same time of the signing of the deed. At this time the notary fees will also have to be paid.
The next step will be paying the taxes arising from the processing of the good at the relevant tax office, since otherwise, writing may not be filed in the appropriate land registry.
Once completed the registration, this will be provided in writing sealed, thus leaving your property protected against any third party rights. At this time you must also pay Registrar fees.
What are the costs of buying a property?
The costs involved in buying a property in Spain vary, depending on several factors: if it is a new build or a resale property, the actual purchase price of the property, and whether you are a cash buyer or buying with a mortgage.
You should generally allow 10-15% of the purchase price to cover all taxes and fees.
- For a resale property, transfer tax (ITP) needs to be paid; this is usually levied at 8%
- Notary fees – typically €400-€900
- Land Registry fees – roughly half the cost of notary fees
- Independent lawyer fees could be €1,000-€2,000
- Valuation fees are around €350
- Stamp duty is 1.5% of the mortgage deeds
- Lender’s commission is typically 1% of the capital loans (if you are buying with a mortgage)
- VAT of 10%, instead of ITP if the property is a new-build