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Property Purchase & Sale costs
Apart from the actual costs of the property, you have to include the transfer costs in the overall purchase budget. Allow approximately 10% of the final purchase price. It can be somewhat more or less depending on the type of property and whether it is a new property from a developer in which case VAT is payable.
Unless otherwise specified by contract, the buyer and seller split taxes and fees as follows:
Buyer Pays:
Either Transmission Tax or IVA: This makes up the bulk of the purchaser’s transmission costs, at 7% on a resale property up to 400.000 euros and 8% thereafter.
If you purchase a property from a developer you will pay 8 % IVA (VAT) and 1% stamp duty. This must be paid within 30 days of the signing of the title deeds. Surcharges apply if not paid within the 30 day limit.
All properties are subject to a five-year period where the Spanish tax authorities can request proof of payment. However, in practice it is impossible to register the change of ownership, new deeds without paying these taxes as the Land Registry will require proof of payment.
Notary Charges: The drawing up of the new title deeds or “Escritura”. The fees are set on a sliding scale, which increases with the price of the property and the complexity of the sale.
If there is a mortgage, a separate contract will be drawn up and will incur the same type of charge, and be billed separately.
Property Registration Fees: these are charged by the local Land Registry Office to register the property in your name.
Legal Fees: 1% - 1.2% Depending on your solicitor and complexity of the transaction.
Vendor pays:
Plus Valia tax: This is a municipal tax that is based on an officially assessed increase in the value of the property since the previous transfer of ownership. This can be quite small if purchasing an apartment, but can be substantial on a villa, which has not changed hands for a number of years. The exact amount due can be ascertained easily from your local authorities and your legal representative should do this prior to signing at the Notary.
Estate Agents Fees: Paid by the vendor, as per the contract agreement between the parties.
Legal Fees: The vendor pays his own legal fees.
Cancellation Fees: The vendor is responsible for the payment of any taxes or charges to cancel a mortgage or any other debts on the property. As the property must be sold free of all charges.
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Buyers Guide - Email us for a copy here
Sellers Guide - Email us for a copy here