REAL ESTATE PURCHASE & SALE WILLS AND INHERITANCE TAXATION CORPORATE LAW
Buying property in Spain (Taxes and costs)
In general, the costs associated with the purchase of a property will vary, depending on the price of the transaction. They usually amount to between 10% and 13% of the purchase price, and are as follows:
Depending on the complexity and length of the process, the lawyers’ professional fees can range between 1% and 1.5% of the purchase price, plus the current VAT at that time. These fees must be agreed at the start of the contractual relationship and not vary throughout that relationship (except where the initial assignment undergoes substantial changes at the client’s express request).
Our lawyers do not charge for their specific hours of work, meetings, drawing up documents, communications or visits, as experience has shown us that, in those cases, if we applied the rates recommended by the Bar Association, the costs for the client would rise considerably. Our minimum fee in any case would amount to 1.500 Euros plus VAT.
All notaries in Spain must charge the same rate for the same service, although the cost of notarial documents varies, depending on several factors such as the price or value of the goods involved in the transaction, the number of intervening parties, the number of pages in the document, etc., which makes it difficult to calculate the final sum of the invoice. They usually range between 300 Euros and 1,500 Euros.
Property Register fees
As with notaries, Property Registrars must keep their fees in line with certain rules that are the same all over Spain. As a general rule, their fees are lower than notaries’ fees.
Transfer Tax (Property Conveyance Tax) and Stamp Duty (for Documentation of Legal Acts)
a) Transfer Tax
This is only applied to second-hand property purchases (resale) and is paid after the public deed has been signed.
In Andalusia, the tax is calculated by stages and determined by the price of the property. The levy starts at 8% for operations of up to 400,000 Euros, rises to 9% for prices between 400,001 and 700,000 Euros, and reaches 10% from 700,001 Euros and above. The tax is assessed individually, so that these quantities and tax rates refer to the percentage that each buyer has in the purchase.
In Murcia and Valencia, however, the levy is set at a fixed rate of 8% and 10% of the purchase price, respectively.
b) Stamp Duty
This tax is exclusively charged on the purchase of new housing, not second-hand (as the latter is subject to the Transfer Tax).
The applicable rate in Andalusia and Valencia is 1.5% of the price, and goes up to 2% in the region of Murcia.
The autonomous communities in Spain set reduced tax rates for certain cases, including the acquisition of one’s usual home at a price below 130,000 Euros by individuals under the age of 35, or up to a price of 180,000 Euros if the person acquiring the home has an officially-recognised disability, and the acquisition of social housing for one’s usual home.
The purchase of new housing is subject to payment of Value Added Tax (VAT). The current rate is set at 10% of the price.
Apart from those that have already been mentioned, purchasers will need to cover other expenses that, in theory, should not excessively increase the final cost of the purchase operation, and which include the contract and connection fees for utilities and other such supplies, obtaining the NIE, the drawing up of a power of attorney or a will in Spain, and all administrative taxes.
Do you still have queries on this subject? Have a look in the FAQs about purchase of real estate in Spain.