Following my last article on the costs that have to be taken into account when purchasing a home in Spain, see here a quick reminder of what it was specified last week. Please see below a guideline.
The expenses of a NEW home purchase.
• Public notary
• Registration with the Property Registry
• Gestoría (if we request mortgage)
• Document duties
Please use these amounts as indicative. Do ask in your local notary for an exact quote.
Purchase amount Notary
50,000 € 625€
2. Property Registrar
There are variations that modify the general rules. For example, there are changes for public housing of, agricultural buildings, or for farms.
Purchase amount Notary
50,000 € 420€
• VAT (value added tax): for "First delivery" new homes (currently at 10%). "First delivery" means those that are acquired from the developer after its construction.
10% in general or 4% in the case of public housing under the special regime or those developed by local authorities.
• IAJD (Documented duties): this tax is generated by signing in the notary and later registering in the registry. The type of tax applicable will be determined by each autonomous community, in general terms it would be between (0.5% - 1.5%) on the purchase price.
Expenses on a SECOND HAND home purchase.
• ITP (Property Transfer Tax: the tax levied on real estate sales is the alternative to VAT (IGIC in the Canary Islands) for second-hand housing
The amount is set by applying a percentage on the value specified on the deeds and depending on the autonomous region in which the home is located, is between (6% and 10%).
Or Patrimonial Transmissions (ITP) of the purchase (second hand).
• IAJD (Documented duties):
As in the case of new homes this tax is generated by signing in the notary and subsequently registering in the registry. The type of tax applicable will be determined by each autonomous community, in general terms it would be between (0.5% - 1.5%) on the amount of the sale shown on the deeds. (This amount is generally less than the actual price paid on the purchase)
• Gestoría: will only be paid if a mortgage is obtained to buy the property. The administrative manager performs all the necessary procedures until the inscription of the deed of purchase in the Property Registry
The agency is selected by the financial institution since it would not deliver the money until the purchase and the mortgage in the Property Register
Being free professionals, their rate is not regulated and may vary from one company to another. Typically, on the day of signing before the notary, a sum of money is requested to provide funds to be able to pay for all the procedures specified above. Once the purchase and the mortgage are registered in the Property Registry, the remaining money will be refunded.
Or Documented Legal Acts (AJD) of the purchase (new work - 1st transmission).
Finally, there is what is commonly called "municipal surplus value", which is the municipal tax on the increase in value of land of an urban nature and paid by the seller. This municipal tax, not to be confused with the tax surplus, taxes the increase of value of the lands of urban nature experienced during the years in which the seller has been the owner of the house. For the calculation of this tax it does not take into account the value of the purchase, nor the market value of the house, but the cadastral value.
It is calculated taking into account the cadastral value and the number of years that the seller has had the property (it has a maximum limit of 20 years) and cannot be less than 1 year. In case of over 20 years will be taken as a reference the maximum (20 years)
According to the law, it is normal for the seller to pay, unless otherwise agreed between the parties. There is a deadline of 30 calendar days from the date of that deeds are signed and payment is carried out it in the city hall.
All the above information have been obtained from the “Idealista” portal so I strongly advise that you obtain the guidance of a good English speaking Spanish solicitor on the Coast.