Does your budget cover the property sale in Spain?
Don't ruin your property sale in Spain by not finding out about the additional buying expenses.
The price tag on the property is just the beginning when figuring out the costs of buying abroad. As a rule you should add a total of between 10% and 12% of the purchase price onto the price tag to cover all expenses and legal fees.
This is not a decisive list but buying Expenses can include:
There are a lot of good solicitors in Spain that speak fluent English. A solicitor charges in between 1% and 1.5% of the purchase price.
Notary fees vary depending on the circumstances.
Land registry fees
These vary according to the area, type and value of the property. They are not strictly taxes but fees charged by the Land Registry to register your title.
Taxes - I.T.P.
Transfer tax is payable when on any resale property, may it be a house, an apartment or a building plot from a private owner. It is calculated at the rate of 7% of the declared value of the property as expressed in the Title Deed. Severe penalties are payable in respect of under declarations which, in addition, can lead to Capital Gains Tax headaches at a later date, as the declared value on your purchase is the base line used by Authorities when assessing the Capital Gain you make on the disposal of the property.
I.V.A: This is the Spanish equivalent of VAT. It is charged at the rate of 7% on the purchase price of any new property with the exception of commercial property and plots.
Stamp duty is payable by the purchaser at 1% of the purchase price on any new property sale in Spain.
A local tax paid on the increase in the value of the property from the last transaction. Normally payable by the vendor but it may be stipulated that the buyer pays. Who pays this will be discussed in the negotiations and in consultation with your Lawyer.
In addition to the above costs, there will be other payments made on your behalf by your lawyer such as the Land Registry bank arrangement fee, broker fees (if you require a mortgage) and building insurance.
Just make sure you are aware of what duties and property taxes will have to be paid when you purchase your new home, and thereafter.
First time buyers? If this is the first time you are looking for a property sale in Spain, then it is essential that you get as much information as possible in anticipation to avoid the classic mistakes.
Once you have worked out your budget (price on the tag plus 10% - 12%), you can look at the different types of dwellings available.
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