When we want to buy a house in Spain, we need to be ready for a thorough expense control. The spend as the mortgage is one of the different costs when you buy a house in Spain, but not the only one. Along this article we will analyze the principal cost, and the process to buy a house in Spain.

First of all, we need to find the house what  we want to buy, and we have to know that in Spain there is a diference between news and resale properties. 

How much taxes will I pay?

Resale properties

We suppose that we decided to buy a resale property,  what we need to know.

As general rule, the most important tax (ITP) Property Transfer Tax. This amount will be depending on Region in which the property is located and it will be between 8% and 10%. There are some exceptions, for example, for the Officially Protected Housing (VPO) this tax is reduced around 4% however, also with large families and the young people often have reduced rates.

 As we can see on the table this tax will be paid in sections of purchasing price. In Andalucia (Málaga, Marbella, Estepona and Sotogrande etc…) We pay 8% when the purchase price is less than 400.000.-€. If the purchase price is between 400.000.-€ to 700.000 the buyer pays 32.000.-€ (8% of the 400.000.-€) + 9% of the remaining amount. If the purchase price is 500.000.-€ This tax will be 32.000.-€ + 9.000.-€ Total 39.000.-€ and so on.

Tax Base Since Integral fee Euros Rest of taxable Base Euros Tax Rate App
0 0 400.000,0 8,00%
400.000,01 32.000,00 300.000,00 9,00%
700.000,01 59.000,00 …onwards 10,00%
  There are a lot of exceptions and some keys to save some money or not paying more than we need to. If you have any question please don’t hesitate to   contact us.

 

You can find more information about reduces taxes conditions for Andalusia Community here: https://www.juntadeandalucia.es/organismos/haciendaindustriayenergia/areas/tributos-juego/tributos/paginas/impuestos-cedidos-transmisiones.html

 

New properties

We suppose in this case that we decided to buy a new property, from a promotion company or renovated house, what we need to know.

The new properties purchase in Spain are graved by the VAT tax (IVA). It´s the 10% of the deed Price as general rule. New properties purchase when this house is public promotion or social housing, 4%. There are some exceptions about the renovated houses, we will be happy to explain you, please contact us.

When we buy the new house in the Canary Island, we will pay IGIC (Special VAT from Canary Community) paying 6,5%.

Also, in all cases we need to pay Tax of Juridical Documents-Stamp Duty (IAJD) it will be calculated betweent 0,5% to 1,5% from the deed property price, but this is paid by the bank part since 2018. It will affect you only if you need financial acquisition from the bank.

The Notary

It´s doesn´t matter if we buy a resale property or new one, the notary fees needs to be paid. This price are regulated by the government, so we will find similar notary prices. The prices are between 600.-€ and 900.-€ and may depend by the property price.

The Public Registry of Property

We need to pay also for published the deeds singned by the notary, in the public registry of property. The fees are regulated by the government between 400.-€ and 650.-€ and may depends by the property price.

Other important costs and advices to keep in mind when we buy a property in Spain

 

  • The IBI (The Property Tax) is inescapable:

This is a local tax, and we have to pay it one per year, and we should to know how much it costs. We must to find or ask for the last receipt payed by the last owner. The first year we should pay just the proportional part of this costs, don´t be fooled. This tax is calculated by the cadastral value, multiplied by the local tax.

Let´s take an example: We suppose that 150.000.-€ is the cadastral value of our property. Now, we need to apply the 0.655% to this amount, so 150.000 * 0.00655, we will pay of IBI 982,5.-€.

  •  The community of neighbours:

Sometimes we don´t think about it, but this cost is very important in Spain and we need to include it in our budget. It can change, depends the services received by the community, and our house coefficient calculated on the total percentage of the building, and sometimes may be a real tragedy. It can vary between 30.-€ and 500.-€ or more, and the payment depends, some comunity ask for the quote every quarter, while other are paid monthly.

  • Home insurance:

It is an integral part of the mortgage negotiation and we can find a lot of insurance companies to make comparisons. We aren´t obligated to contract the house insurance with our bank, but the bank can use it to negotiate our mortgage conditions. Our advice is that we need to compare between the insurance companies and the bank conditions to take the best decision for us. We will be happy to calculate the insurance to help you taking best decision. 

  • Supplies costing and rubbish collection fees:

Where are we going to buy the house? How much is spent on heating? And, how much in air conditioning? This is a very important thing to think about it. Asking for the previous bills will serve as our starting point to find the solution. Knowing the status of these will allow us to adjust the correct Budget, and it could be a very serious weapon to negotiating the Price in the resale properties buying. Also the rubbish collection fees must to be paid every year, if our city apply it, and it cost is around 70.-€ on average. 

There are a lot of exceptions and some keys to save some money or not paying more than we need to. If you have any question please don’t hesitate to contact us.

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