On average, the cost of buying a property in Spain will be in the region of 10% to 15% of the purchase price depending on the complexity of the procedure and the area of Spain in which you are buying.
The notary – 600 euros – The notary charges a standardised fee which varies according to the amount of land, the size of the property and its declared purchase value.
The registry fee – 300 to 600 euros – The inscription of the property in your name in the official property register
The transfer tax – 7% of the declared purchase value
Transmisiones Patrimoniales in Spanish, is 6% (7% in Andalucia) of the value declared in the contract. If you purchase a new property from a developer, this tax will be value added tax at 7%.
The document fee – 0.5% to 1% of the declared property value – This is equivalent to stamp duty and is currently 0.5% (1% in Andalucia) of the declared property value.
The municipal tax – 10% to 40% of the increase in value of the property. This municipal tax is on the increase in the value of the property since its last sale. It is called ‘plus valia’ and can vary from 10% to 40% of the annual increase, depending on the length of time between sales and the town in which the property is located. This can be a large fee so you would be wise find out exactly how much it will be by going to the municipal tax office and asking in advance.
Your lawyer – approximately 1% of the property value. The lawyer will charge you around 1% of the value of the transaction, unless there are some unusual complications<
The tax deposit – 5% of the declared purchase value. If you are buying from someone not resident in Spain, you will deposit 5% of the total purchase price at the town hall in the seller’s name as a guarantee against his future tax liabilities. You pay the seller 97% of the price, and pay the other 3% directly to the town hall. This serves as a guarantee against the non-resident seller’s various Spanish tax liabilities.
Deciding who pays which taxes – This list of fees pretty much covers the extent of the major expenditure when buying a property in Spain. The buyer and seller are free to agree whatever terms they choose as there is no Spanish law requiring that one of the parties must pay any particular tax. Typically, the seller pays the notary fees and the municipal tax, as he is the one making the profit on the increase in the property value, while the buyer pays the transfer tax and the registry fee, as he is the one who is interested in making sure the property is registered in his name.
Deciding the declared property value – Until recently it was common practice to declare a low value for the property in order to minimise the transfer tax. Now most lawyers advise both parties to declare a realistic market value. If the Spanish tax agency discovers that the value was under-declared by more than 12,000 euros or 20%, they can (and do) apply heavy fines. The safest way is to ask at the payment office of the nearest tax agency and they will tell you exactly what value they assign to a particular property
If and when you resell the property, you will be liable for Spanish capital gains tax on any profit made. Although it is tempting to declare a low value now, you will be liable for tax on a much bigger profit when you later sell.
