Taxes and expenses in the process of buying real estate in Spain
When buying property in Spain, it is important to know about the taxes and expenses that will need to be paid. They will differ slightly depending on which market you buy accommodation - on the primary or secondary. For example, in the case of buying the primary real estate, you will have to pay the Value Added Tax (VAT) to the Spanish Treasury, in the case of the purchase of the secondary, you must pay a transfer tax.
TAXES IN THE CASE OF BUYING A PRIMARY REAL ESTATE
- If you buy a new property from a developer in Spain, (it means the new accommodation from a building company), you must pay the Spanish Treasury a Value Added Tax (VAT), in the amount of 10% of the value of the property. Since it is the SELLER who transfers this money to the tax authorities of Spain, VAT must be paid immediately when signing the bill of sale.
- Another tax is a STAMP DUTY, (or a tax on documentary legal actions). This tax is paid by the buyer and ranges from 0.1% to 2% of the value of the property (depending on the autonomous region, which the property is located in).
- Notarial expenses. The amount of notarial expenses depends on the cost of accommodation (and officially fixed tariffs of notaries). The cost of notarial services depends on the particular notary. On average, from 600 to 1000 €.
- Registry costs, associated with the REGISTRATION of the deeds of sale of real estate in the "Property Registry of Spain". It’s also paid by the buyer. And their amount is on average from 300 to 500 € (depending on the autonomous region, which the property is located in).
- Also, in order to avoid potential debts for a mortgage (or taxes) from the PREVIOUS OWNERS of your chosen property, it is recommended to "check the STATUS of this accommodation". This document is requested in the "Property Register of Spain" and is called Nota Simple. It indicates all the necessary data about your chosen property and about the previous owners. This check costs about 10 €.
TAXES IN THE CASE OF BUYING A SECONDARY REAL ESTATE
- In the case of buying a resale property from a private individual in Spain, we need to consider the “TRANSFER TAX OF OWNERSHIP”. This tax is paid by the BUYER. It ranges from 6 to 10% of the value of the property (depending on the region).
- Notarial expenses (from 600 to 1000 €);
- Registry costs (from 300 to 500 €);
- and Expenses for checking the status of the property (up to 10 €).
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