The costs involved with buying a home in Spain

Have you started to hunt for your new home in Spain? Have you found your dream home, and you’re in the process of making it yours? No matter what your particular situation is, we advise you to read this article and make sure you’re aware of all the expenses relating to the transaction.

When we think about the costs involved in buying property, we often forget that there are other expenses apart from what we must pay for the house itself and/or the mortgage repayments (if we need one). The experts recommend having previous savings of between 10% and 12% of the total price of the property.

Here’s a list of all the expenses you need to take into account when buying a house in Spain:

Notary fees:

This is an expense you will have to face no matter what type of property you buy, regardless of whether it is new or second-hand. Notary fees are State-regulated, that is, all notaries charge the same amount. In this case, the exact amount will depend on the value of the property, but fees for public deeds of sale are between 750 € and 1,500 €.

Property Registry:

It is highly recommended, though not compulsory, to register the deeds that have been signed by the notary. As in the previous case, the prices are regulated and depend on the value of the property, but it tends to cost between 400 € and 600 €.

Taxes:

The amounts depend on the price of the property and whether it is new or not.

The most important taxes in the case of new development properties are:

• VAT (IVA): In Costa Blanca, the VAT on property is currently set at 10% of the property value.
• Stamp Duty (IAJD): This amount depends on the region the property is located in. In Costa Blanca, it amounts to 1.5% of the property value.

In the case of second-hand properties: 

• Transfer Tax (ITP): In Costa Blanca, this is 10% of the property value. In the case of social housing, people with disabilities, large families and youngsters there are reduced rates, provided that it is a purchase of a main residence.

Agency (gestoría) fees:

This expense is optional, as you can decide whether or not to employ an administrative agency to assist you with the settlement of taxes and completion of formalities. In this case, there is no regulation of fees or fixed prices, but as a rule of thumb you can expect to be charged somewhere around 300 €.

Mortgage costs:

Obviously, you will only need to cover these if you are going to have to apply for a mortgage in order to purchase your new home.

• Valuation of the property: You will have to employ the services of an appraiser to value the property. This is what the bank will use to decide on the amount it will loan you. Banks generally lend up to a maximum of 80% of the appraisal value, depending on each buyer’s profile. The price for the valuation is between 250 € and 600 €. Keep in mind that the valuation is valid for 6 months, after that you will have to have it valued again.
• Opening fee: This will depend on what has been agreed with the financial institution, but it is usually 2% of the capital granted. This fee is deducted from the amount delivered.
• Stamp Duty (IAJD): You won’t have to worry about this bit, as the bank is responsible for paying this tax.
• Notary: You won’t have to worry about this expense either as the financial institution also has to cover it.
• Property Registry: You will have to register the deeds signed by the notary. The cost of this is regulated and covered by the financial institution.
• Administrative agency (Gestoría): The lender you decide to work with will choose the administrative agency, and must cover the costs.

We hope that you find this article useful upon buying your new home in Costa Blanca. You may find the process of purchasing property in Spain rather complicated, but you can rest assured that at Jetvillas, we love to help. Get in touch with us if you need any further information. We’ll be delighted to accompany and assist you throughout the process.

Plus, if you buy through us, you can get the Safe Purchase Guarantee Stamp completely free of charge. Do you know what it is? It’s an insurance that covers your property for the next 20 years. Sound good? Click on the button below: