Legal process and costs involved:
If you are considering buying a property in Spain, it is always advisable to find a qualified lawyer or financial advisor, preferably with expertise in real estate law, to offer legal and tax advice.
Here is a useful guide to the steps to consider when buying a property in Spain:
Property registration: The property registration is an important formality to know if the property is free of charges.
Contract of purchase: A private purchase contract will be made including all details of the property and the sale including the legal description of the property, the price, the form of payment to be made, the date of completion and the date when the property enters your possession.
Deposit: Once the contract has been made, a payment is then made that serves as a form of deposit which may vary in amount, but as a [a1] general rule of thumb a completion date of around 30-60 days would require 10% of the agreed purchase price.
Deed: Once the full amount has been paid on any purchase of the seller's property, a public deed will be issued. The deed is issued in the presence of a Spanish notary who will pass it to the tax office to determine the transfer tax (whether it is a resale or second-hand property) or a public deed that will be assessed by the stamp duty if the property has been sold directly by the developer.
Property registration: Once all of the processes have been completed for your property, it will be put on the Land Registry (Registro de la Properiedad).
Taxes, costs and fees involved:
In general, a total of 9-10% may be paid in taxes for secondhand homes and 12% for new properties.
Here is a guide to the percentages:
Transfer tax (I: T: P): This is the buyer's charge for any type of real estate, whether it be a villa, land, commercial location, etc. If the minimum fiscal value of the premises is greater than the price, then the following tax valuations are applied:
- 8%: This is the percentage corresponding to the amount of 400,000 € for properties/land or up to 30,000 € for individual garages.
- 9%: If the amount is between 400,000 € and 700,000 € (30,000 € and 50,000 € for garages)
- 10%: If the amount exceeds 700,000 € (or exceeds € 50.000 for garages)
For example: If a property costs 500,000 €, you pay 8% (40,000 €) on the value of 400,000 € and then the remaining 100,000 € (since the property costs 500,000 €) would require paying 9% (9,000 €) for a total of 49,000 €.
VAT Tax: For any villa or apartment in which the seller is a seller or dealer in new properties, the tax is set at 1.5% and the VAT at 10%. Tax is set at 1.5% and VAT is set at 21% for land, commercial locations, garage or commercial parking spaces for which the seller is a trader or dealer in the real estate sector.
Notary and property registration fees: Notary fees vary depending on the complexity of the title deeds, how much your property is worth and the complexity of the operation, but you can usually expect to pay up to 1,750 €.
Municipal value added tax (capital gains): This tax is applied to the provider, who is responsible for this payment unless otherwise negotiated. Several factors come into the calculation of this type of tax, including the length of time the real estate property. This sum is also based on the value of the city council index of land only from sellers who bought prior to the present sale. This amount is usually not much for an apartment or a house and may be less than 1000 € if carried out within the past 5 or 6 years.
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