It is very important to know the approximate costs involve in the purchase of a property so you can organize your finance when you want to invest in a real estate in Spain.
The costs start with the taxes, which will depend if the purchase is from the developer, in which case it will be IVA (VAT) what you would have to pay, or from a private seller or second transmission, which it will be transfer tax:
a.- New Construction.- The VAT is 10% in houses and together with this tax it comes, as well, the stamp duty which is 1,2%, so the tax involved in purchase from the developer would be 11,2% in total. The VAT has to be paid to the developer at the moment of each of the different payments that needs to be paid during the purchase process. The stamp duty will need to be paid after completion and to the Andalusian Tax Office.
b.- Second Transmission.- The transfer tax for the second transmission is 7%. This tax will have to be paid to the tax office within a month after completion.
Beside the tax the other costs involved are:
- The Notary and Registry costs.- The Escritura (title deed) must be signed before a Notary Public and registered in the Land Registry. These costs depend on several factors, i.e., number of folios, price, document adjoined, etc; usually between those two professionals together will be less than 1% of the price taking into account a price of 200.000 euros
- Legal fees. – It is not strictly necessary, but contracting a lawyer is highly recommendable, and the costs will depend on several factors, but the usual figure is 1% plus VAT.
Finally, if you need a mortgage, it will have as well other costs that need to take into account specially in the process to obtain the mortgage (valuation costs, open commission, insurances,….)
