Before you begin your property search, you need to understand (and budget)
for the purchase costs you will eventually incur when you purchase your
property. We would always recommend you identify these, together with
any other significant costs (such as costs against the sale of another
property) and 'factor' them into your budget against the maximum purchase
price you can afford.
As a starting point, and as a very 'general' rule, the amount of costs you
are likely to incur when you purchase a re-sale, non-commercial property
in Spain is approximately 10% of the asking price. These costs are broken
down as follows:
Purchase Tax (property sales / transfer / land tax):
The amount the purchaser pays will vary depending on the type of property
and the nature of the vendor.
- New build/development property. If the vendor is a property developer
the purchaser will pay 7% in VAT and 5% in AJT (stamp duty).
- If the property is a piece of land or commercial property, the purchaser
will pay 16% VAT and 1% AJT (stamp duty).
- If the vendor is not a property developer (private sale), the purchaser will
pay 7% in property transfer tax - (most sales fall into this fee situation).
PlusValia Tax:
The plusvalia tax is calculated by the local Town Hall of each municipality
using formulas which take into account different variable such as the
ratable value of the land and the number of years elapsed since the last
sale/purchase. This tax is more commonly known as "Increased Land
Value". It has become common practice in Spain to under-declare the
true value of the property in order to reduce the level of plusvalia.
Be extremely careful with this as the Spanish are starting to clamp down
on what has previously been a quite acceptable tax dodge.
In order find out the plusvalía tax amount, you (your lawyer) need to go to
the local Town Hall where the property is located. They will tell you the tax
accrued if the property was to be sold on that date.
Notary Fee:
The purchaser has to pay the Notary a fee of approx 1% which covers the
Notary fee and also the property registry inscription fees.
Title / Deed Transfer Fee:
The fee associated with the preparation and subsequent transfer of title
deeds from vendor to new property owner is approx 0.5%. This fee is
sometimes 'built' into a mortgage advance, particularly if your mortgage is
taken out in Spain.
To help our clients understand the related costs against buying a property
in Spain, we put together the following property purchase examples with
the relative costs breakdown.
Example 1 - property costs breakdown:
(NEW property, non-commercial, £150,000)
| |
Costs |
| Purchase Price |
£150,000 |
| Purchase VAT (7%) |
£10,500 |
| Notary Fees (1%) |
£1,500 |
| Title / Deed Fees (0.5%) |
£750 |
| Legal / Lawyer Fees (1%) |
£1,500 |
| Stamp Duty (AJT) (5%) |
£7,500 |
| Total |
£171,750 |
Example 2 - property costs breakdown:
(RESALE property, non-commercial, £150,000)
* PlusValia example only, see above detail
| |
Costs |
| Purchase Price |
£150,000 |
| Purchase Tax (7%) |
£10,500 |
| Notary Fees (1%) |
£1,500 |
| Title / Deed Fees (0.5%) |
£750 |
| Legal / Lawyer Fees (1%) |
£1,500 |
| * PlusValia Tax (1%) |
£1,500 |
| Total |
£165,750 |
Note: The information set out above is our interpretation of the various laws and
regulations when purchasing a property in Spain. The detailed information has
been checked by us, so that as far as possible, all information is correct at the
time of publish. However Charterhouse Homes cannot accept liability for any
inaccuracies or change to the information provided.
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Costs - buying Property in Spain
