Buying a Property in Spain
Let us help you find your property. Take a look at some of the properties we have on our website enjoy a taste of what we have to offer, but the most important thing is to come here and see everything at first hand. If you cannot find on our website what you are looking for you can also fill in this PURCHASE FORM with the details we request and we will find it for you.
We live and work in the areas where we sell houses and have good local knowledge. Let our experience and our broad network of contacts help you.
Once you find one or several properties that meet your requirements and you are ready to come to Spain and visit them, we will help you organize your trip, flights, accommodation and we will also organize your transfer from the airport. We usually need 2-3 days to show you a range of selected properties and show you the area. After that time clients are normally ready to make a decision or they want to think about all the options. We will never put any pressure on our clients and they can take the time they need as buying a property is an important investment and we will help them through the whole process to make sure they make the right decision and they are happy with the purchase.
There are some tips and costs you have to bear in mind relating the purchase of a property in Spain.
Costs of buying a property in Spain
As a buyer of a property in Spain there are several costs and taxes over and above the property price that you will have to pay. Depending upon whether you are buying a new property from a developer, or a resale property from a private individual, you will either have to pay VAT & Stamp Duty, or a transfer tax. The different cases are explained below, along with the other costs and taxes that are common to both cases.
- VAT & STAMP DUTY (IVA & Actos Jurídicos Documentados – AJD)
These taxes apply if the property is being transferred for the first time and the seller is a property developer (NEW DEVELOPMENTS or KEY-IN-HAND PROPERTIES). The VAT (known as IVA in Spain) is 10% in the case of built residential property (villa, apartment, etc), and 21% in the case of plots of land (without built property) and commercial premises. The Stamp duty (known as AJD) is 1.5% of the price of the purchase, but might go up in some regions or provinces, so be sure to check on the latest rate. Both VAT and Stamp Duty are paid by the buyer, and if any deposit is paid before completion of the sale, such deposit will be subject to VAT at the moment of payment of this deposit.
- TRANSFER TAX (Impuesto sobre Transmisiones Patrimoniales – ITP)
This tax applies if the property has been transferred before (RESALES) and is paid by the buyer. The full amount of ITP has to be paid upon completion. There is no VAT or stamp duty to pay.
The Transfer Tax rate may vary from one region to another as it is set by the regional governments so the current rate needs to be check out at the time of buying. It is usually around 10%.
- INCOME TAX PROVISION when buying from non-residents
If the seller is not a Spanish resident, the buyer has to withhold 3% of the purchase price and pay it to the tax authorities (application form 211). If this is not done the property will be considered by the tax authorities as the asset backing the capital gains tax liability of the seller.
- LEGAL FEES
We can help you arrange all the legal formalities and advice you throughout the whole purchase process. We will draw and review the contracts and will explain you all the legal steps to buy a house in Spain. We will also arrange and check the title deeds at the notary’s office, check that the property is free of charges or debts before completing and also we will arrange all the documents to complete the process (pay the property taxes, land registry fees, stamp duties, notary’s fees, etc…) on your behalf so you do not have to worry about anything.
We have a special package for our clients that includes several legal services and you can check on this link: LEGAL FEES FOR OUR CLIENTS
- MORTGAGE COSTS
If you need a mortgage to finance the purchase then there will be some additional costs to add that will vary depending on the bank or even the branch:
- Property valuation (around 500€)
- Opening fee (around 1%)
- Stamp Duties
- Notary’s fees
- Property Registry fees.
So taking into account of the information above you need to add approximately 13% on top of the purchase price to cover all the taxes and additional costs. If you need a mortgage these costs can be slightly higher since the bank will charge some fees and also there are some extra taxes, notary’s and property registry’s fees involved. In this case all the costs might reach between 14% and 15% of the price of the property.