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When you are looking for real estate in Spain, it is obviously important to know what costs are associated with this purchase. In addition to one-time purchase costs, you should also consider costs that recur periodically (predominantly annually). We list the most important ones for you.
ONE-TIME PURCHASE COSTS
When purchasing an existing home or apartment, you should take into account an additional cost of approximately 12% to 14% depending on whether it is an existing home or a new construction project.
Which costs should you definitely consider?
- 8% to 10% registration tax (also called 'TPO', or 'Impuesto sobre Transmisiones Onerosas') depending on the region. This is the tax applicable to the purchase of an existing home in Spain. This tax must be paid within a month after signing the deed at the registration in the property register.
- 10% VAT when purchasing a new construction project.
- 1-1.5% costs for advice and guidance during the purchase by a consultant and/or lawyer. Depending on the complexity of the sales procedure, this cost may vary. Often a fixed amount is agreed in advance to avoid later surprises. This will be at least 2,500 EUR. Also, seeking advice in advance regarding personal planning, tailored to your personal situation, is certainly not an unnecessary luxury.
- +/- 2% notary costs (including stamp duty, to be paid before signing the notarial deed) and the costs for registration in the land registry. Stamp duty can vary considerably depending on whether you purchased with registration tax or VAT. When purchasing with registration tax, only the fixed stamp duty is owed.
Note! Keep in mind that when taking out a mortgage, higher appraisal and stamp costs will apply.
PERIODIC COSTS
A number of annual costs listed:
- 'Impuesto sobre bienes inmuebles' - property tax
- 'Renta de no-residentes' - non-resident tax
- 'Impuesto sobre el patrimonio' - wealth tax
For these taxes, we refer you to the blog: 'The answers to your questions about Spanish taxes.
Additionally, you should consider fixed costs of utilities such as gas, water, electricity, internet, insurance, community owner fees, and maintenance and repair costs related to the garden/pool and home.
No worries! This may all seem like a lot, but with the right guidance and expertise, your tax obligations will be taken care of. Baker Tilly can optimally guide you personally in this. Together we will bring this to a successful conclusion.
