The key to the successful purchase of a property in Spain is to understand the buying process and the costs involved in doing so, here we will help you understand these points further in relation to purchasing a property in Spain.
All property transactions in Spain must be approved by a registered Notary, a legal representative of the Spanish government. Only Notaries can register you as the rightful owner of a property in Spain’s Land Registry, which they do after witnessing the signing of the deeds (Escritura) by the buyer and vendor, and ensuring all associated payments and taxes are paid.
Once you have found your dream home it is standard practice that a “reservation” is signed to secure the negotiated price of a property, this reservation requires that a “reservation fee” is paid to secure the sale at the agreed price. This fee is normally around €3000 and forms part of the price paid for the property.
Additional Purchasing Costs
So what about additional costs when purchasing in Spain? As a ballpark, when buying a property you should budget for a further 13% dependent upon the purchase price of the property to cover all taxes and fees. If you are buying with a mortgage, costs will be slightly higher than if buying outright.
Costs for a new build property, which should come with a Licence of First Occupation, are slightly different. Transfer tax is not payable, but instead VAT (IVA) is payable at 10 per cent of the purchase price
Notary fees (fixed on a sliding scale but typically €500 – €900)
Land Registry fees (roughly half the cost of notary fees)
Independent lawyer’s fees, approximately €2000 including IVA
stamp duty is also payable at 1.5 per cent of the purchase price (without VAT)
Additional Anual Running Costs
Once you are a proud home owner on the Costa Blanca, you will have to pay annual council tax, known as IBI and also referred to as SUMA in the southern Costa Blanca, as well as a tax for rubbish collection.
In addition to that, you will need to think about the usual running costs that come with home ownership, from electricity bills to community fees (if your property is part of a complex).
Click Here To Visit Goverment Website on Advice on Buying in Spain