Spanish Property Purchase - Costs
As you may have already read in books about Spanish properties you need to allow about 10% of the purchase price for additional costs. The main costs which make up this figure are:
- Government Tax (8%)
- Notary Fees
- Registration Fee
- Legal Fees
The main buying cost is a government tax of 8% (4% on new properties bought from a development company until end of 2012) Other than this the buyer can also expect to pay registration costs of around €400 euros plus a gestors fee of around €200 euros for helping pay the taxes and arranging the registration of the new escritura.
There is one other tax which is called "plus valia" and by law should be paid by the vendor although in some areas estate agents prepare contracts with the buyer responsible for the plus valia or even for all of the costs of the sale. Our contracts normally state that the seller pays the plus valia and half of the notaries fees and so overall the total buying costs should be no more than 9% of the purchase price.
Lawyers normally charge an additional 1% for legal costs and for buyers who do not speak Spanish there are various English speaking lawyers in the area. It would not be entirely satisfactory to appoint a lawyer from another area as in Spain there is no system of searches with the local authority and whoever you rely on to assist you through the buying process must have good local knowledge if they are really to be of much help to you. Eg knowledge of local water supplies, routes of new roads, financial state of the community of owners, planning/building rules that would apply to other land nearby, etc etc. As well as having good local knowledge whoever is helping you complete your purchase must also be competent to confirm that the legal title to the property is entirely correct and without any encumbrances.
Once an agreement has been reached we do rather more work for buyers than for sellers as all that the seller expects is the financial proceeds of the sale. We regard it as part of our job to ensure that our buyers receive not only the physical property concerned but also full registered title with no charges or liens registered against it and all outgoings paid up to date. On the day of completion we make a detailed account between the seller and buyer to include an apportionment of any community fees, local taxes and any other regular outgoings. If the vendor has unpaid bills that would attach to the property we pay them on behalf of the vendor from the deposit we hold. We change over the electricity and telephone contracts and property ownership records with the local authority. We assist non-resident buyers in obtaining their fiscal number and certificate of non-residence and we can also help open a local bank account. If finance is required we can assist with a mortgage application to one of the local banks who nowadays are very happy to lend up to 70% of the purchase price to non residents. With relatively low euro interest rates (5.5%-6.0%) many buyers are finding it advantageous to finance part of their purchase with a Spanish mortgage rather than use their existing capital for the entire purchase price. (If a local mortgage is required remember to allow +/- 3% of the loan amount for mortgage start up costs in addition to other purchasing costs mentioned above.) Click this link to a Local bank mortgage repayment calculator
We can introduce you to reliable companies for insurance and fiscal affairs, building and maintenance works, letting and management services. We never accept introductory commissions from companies (including banks offering mortgages) that we introduce our clients to instead requesting them to reflect any commissions that they would normally pay to introducing estate agents in a better deal for our client.
Even when we handle all aspects of conveyancing we make no direct charge to buyers for our comprehensive service as we consider this work to be part of our overall job in bringing each sale to a satisfactory conclusion for both parties. We will happily pass on contact details of recent buyers so that you can hear directly from them how they feel about their experiences with us.
Return to our introduction about procedures and costs for Spanish Property Sales