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Costs of Buying a Home in Spain: an Essential Guide for Foreign Buyers

Costs of Buying a Home in Spain an Essential Guide for Foreign Buyers - Costs of Buying a Home in Spain: an Essential Guide for Foreign Buyers

Buying a house in Spain implies different procedures and taxes, which means expenses. Knowing all the costs of purchasing a home will be fundamental because they affect the total outlay of acquiring the property.

Home purchase expenses apart from the sale price

These expenses may vary depending on whether it is a new or second-hand property. And, in any case, the sum of all of them is between 10 and 15% of the sale price. They are usually the following:

Notary

The law regulates the cost of the deeds and depends on the sale price. Generally, it represents between 0.2% and 0.5% of it.

Taxes

In this regard, there are essential differences when calculating home purchase expenses:

  • In the case of a brand-new home, we'll have to pay VAT: 10% of its value. And we must add the Tax on Documented Legal Acts (IAJD), which depends on each region and ranges between 0.5% and 1.5% of the property value.
  • In the case of a resale home, we won't pay VAT or IAJD (unless we purchase the property with a mortgage), but we'll have to pay the Property Transfer Tax (ITP). However, it also varies according to the region and can be between 4% and 10% of the sale.

Property registration

Similarly to notary fees, some laws regulate it. It gets between 0.1% and 0.25% of the property value. For instance, for €300,000 home, the cost will be around 525 euros.

Other expenses involved in the buying procedure

These other expenses are optional:

Consultancy: fees can be very different from one to another. On average, an agent can charge around 300 euros for carrying out the procedures related to the sale.
Appraisal: when requesting a mortgage, the bank will ask for an official appraisal whose price depends on the dimensions and characteristics of the property. Usually, it is between 100 and 500 euros.
Mortgage expenses: getting a mortgage also entails costs in notary and taxes.

Home purchase expenses: practical examples

The best way to see how these home purchase expenses impact is to see it through examples:

Newly-built home valued at 250,000 euros:

• Public deed: 570 euros.
• Registration in the Land Registry: 375 euros
• VAT: 25,000 euros
• IAJD: 3,750 euros (in regions where 1.5% is applied, such as Catalonia); 1,250 euros (in Andalusia, where 1% is applied).

If we add consultancy costs, the expenses will rise between 27,000 and 30,000 euros.

A second-hand home valued at 250,000 euros:

• Public deed: 570 euros.
• Registration in the Land Registry: 375 euros
• ITP: 25,000 euros (in Catalonia, where 10% applies) and 17,500 euros (in the Balearic Islands, where 8% applies).

If we add other costs, the total amount could increase above 18,000 euros. Besides, we'll have to add the IADJ if we get a mortgage to buy the property.

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