Introduction
Are you preparing to buy a property in Spain? Be aware that, beyond the purchase price of your property, there are several taxes and fees that you will have to pay. The experts at Terreta Spain explain.
The ITP
This is the tax most known to buyers, the Impuesto sobre las Transmisiones Patrimoniales (Tax on Patrimonial Transfers). We have dedicated a very detailed sheet to it, but here is what you should know about the subject:
- It is a one-time tax.
- It concerns all properties purchased in the resale market.
- The ITP is a regional tax and its rate varies depending on the autonomous community in which the property is located. It ranges from 6 to 13%.
To go further, consult our practical guide on the ITP.
Advice from the experts at Terreta Spain:
- Find out about any available reductions. Some regions have specific regulations for first-time buyers or large families, for example.
- If your project is to invest to generate maximum profitability, target autonomous communities in which the ITP is lower. Madrid, the capital, is a very good choice. The Tax on Patrimonial Transfers is at 6%, demand is exploding and rental vacancy rates are very low.
IVA and AJD
The IVA is the equivalent of VAT in Spain, the Impuesto sobre el Valor Añadido. The IVA concerns properties purchased as new builds and is always 10% of the purchase price when it is a residence.
The payment of the IVA is accompanied by the AJD, which concerns Documented Legal Acts. It is marginal and amounts to between 1% and 1.5% of the amount of the property, depending on the autonomous community.
If you buy land or commercial premises, the IVA rises to 21%.
Notary fees
- In Spain, notary fees are not very high since the role of the notary is limited to certifying the legality of the transaction and officially registering the transfer of ownership.
- They depend on the value of the property and generally vary between 500 and 2000 €.
Administrative management fees
In the process of buying property in Spain, it is common to use a gestoria, a specialized agency that handles the administrative procedures related to the purchase, such as the payment of taxes. This generally costs between €200 and €400.
Lawyer's fees
If you use a lawyer specializing in Spanish real estate law, which is not mandatory but recommended, take their fees into account. They represent approximately 1% of the purchase price, plus 21% VAT.
Bank charges
If you plan to use a bank loan, don't forget to add the related costs.
- Expect to pay between €350 and €500 for tasación fees, the valuation of the property's price by an expert. This is required by banks. To learn more, check out our practical guide on the subject (to be integrated once published).
- Add between 0.5 and 1% of the loan amount for bank charges on average.
Estimated total of additional costs
It is estimated that the costs of buying property in Spain represent between 10 and 15% of the property price.
Sources: Idealista, Terreta Spain
