Since June 2019 an important rule change established that some of the expenses related with the mortgage are assumed by the bank entities. However let’s take a deeper look on what are the expenses you have to consider when buying a property in Spain.
- Expenses of the purchase:
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- Notary: the prices are set by the Administration. All notaries charge the same and its cost is around 600-1000€ depending on the price of purchase.
- Property Registry: linked again with the price of purchase, the registration of the notary deeds can cost between 400-600€.
- Advisor: The advisory to assist the buyer on the purchase process are 400-500€.
- IAJD (Documented Legal Acts tax): It can vary from 0,5% to 1,5% of the purchase price depending on the region where the property is located. If the property is in Catalunya, Comunidad Valenciana or Andalucia you have to pay 1,5% and if it is in Madrid you have to pay 0,7%.
- ITP (Wealth Transmission Tax): If it is a second hand property you have to pay an amount that goes from 6% to 10% of the purchase price depending on the region where the properry is located. You have to pay 10% in Catalunya and Comunidad Valenciana, 8% in Andalucia or 6% in Madrid.
- IVA (Value Added Tax): If it is a new property you have to pay 10% of the purchase price (except in Canary Islands where it is a 6,5%).
- Expenses of the mortgage:
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- Notary, Property Registry and IAJD: Since June 2019, all these expenses are assumed by the bank according to the Ley de Crédito Inmobiliario 5/2019 (Mortgage Act).
- Valuation: Always required by the bank entity, it is a cost around 500-600€.
In conclusion, the expenses to buy a property in Spain will be around 10-12% of the purchase price.
It is also important to consider that there are discounts on some of the previously announced taxes for people with disabilities, young buyers (below 33 y.o.), social housing or large families. If you want to know more about this don’t hesitate to contact us.
