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Top tips for buying and owning property in Spain

Tuesday 25th July 2017

Written by Roy Weatherby, The Overseas Investor

It is important that you know all there is to know about purchasing and owning a property in Spain. So what costs are involved?
 
The costs of purchasing from a developer or a bank
 
There is VAT and Stamp Duty to pay on residential properties that are sold for the first time. The VAT is currently 10% on residential properties and 215% for commercial properties and land. Stamp duty is 15% of the purchase price although this could increase in some regions of the country.
 
The costs of purchasing a resale home
 
If you are purchasing a home that has been sold before then you will need to pay Spanish Transfer Tax. The general rate is 7% but this can change depending on the region. Should the seller not be a resident of Spain, the buyer will have to keep back 3% of the purchase price which will then have to be paid to the tax authorities. 
 
The additional costs of purchasing a new build or resale property
 
Buyers will be expected to pay estate agent fees which can be anything from 2% to 15%. The process of purchasing a property will require the services of a lawyer as they will be able to handle any legal or administrative issues you may come across. The fees they charge can differ but it could be around 1% of the purchase price.
 
If the property is being purchased with a mortgage then there will be costs associated with this. There are property valuation costs as well as the cost of the mortgage which varies but is often around 1% of the value of the mortgage. There are also notary fees of around 0.5% of the price of the property as declared in the deeds while Spanish Land Registry Inscription fees will cost around 1% of the purchase price.
 
In addition to this, there are banking costs, furniture costs and Plusvalia Municipal Tax.
 
The costs of owning a Spanish property
 
There are many costs involved in owning a property in Spain. These could include maintenance costs, repairs, utility bills, refuse collection and even cleaning. These costs are relevant to the size of your property.
 
Property Ownership Tax is a local tax that has to be paid regardless of whether the owner is a resident or not. The amount is based on the administrative value which is lower than the market value. This figure is set by the town hall.
 
While owning a property in Spain is exciting for both residents and non-residents, it is vital that buyers are aware of the costs of purchasing a property and owning a property. These costs can add a considerable amount to the cost of purchasing while the taxes that have to be paid are an integral part of owning a property. However, the costs do not stop there as there are then costs associated with owning a property and this is why you need to be aware of everything that comes with purchasing an owning a property in Spain.
 
For more information on investing in Spanish property, please contact Hopwood House.
 


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Editorial Contact Details - Conor Shilling
conor.shilling@angelsmedia.co.uk
0845 672 6000
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