So we have found your dream home.
We checked that all is good to go, the house is legal, papers are all in place and we negotiated a fair price with the seller.
You are about to sign on a sunny, spring morning at the crowded office of your local notary.
Apart from the agreed price, what other costs do you need to consider?
The transaction costs of buying a property in Spain are high
Property Transfer Tax – Impuesto sobre Transmisiones Patrimoniales (ITP)
The ITP is only applied to Second Hand Properties.
The ITP is charged at between 8% and 11% depending on the purchase price. Properties over €1,000,000 carry an 11%.
New Construction are charged IVA (VAT) which currently stands at 10% plus 1% Autonomous Tax.
Agency Fees
The standard agency or broker fee is between 3% and 5% depending on the size of the transaction. This is paid by the seller and already included in the price.
Legal Fees /Lawyers Fee
The standard charge for the lawyers handling the transaction are around 1-1.5%. This can vary somewhat in terms of the complexity of the transaction and the size.
Notary Fees The fees are also negotiable but indicated between 0,05% and 0.1%.
Property Registry Fee Dependent on property and location but fees are between 0,05%-0.1%.
Banking Costs
Transfer costs & Bankers Check fee can be up to 0.5%, worth shopping around.
Annual Taxes
IBI , the Impuesto sobre Bienes Inmuebles or Land/Building Municipal Tax – around 0,1% of the property value.
Garbage Tax- Around €50 to €150.
So when you add it all up including taxes we are looking at around an additional 12% to 14% transaction costs on top of the agreed price for premium properties.