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Are you thinking about a second home on the other side of the border? Maybe you want to spend your summers in paradise or
Are you thinking about a second home on the other side of the border? Maybe you want to spend your summers in paradise or perhaps you´re planning to move the family with you. Regardless of the situation, this is exactly what you need to know before making the big move.
Don´t let the small letter catch you off-guard; read on, be informed, and live your dream happily.Compulsory expenses when buying the property
All of the following expenses are compulsory before you receive the keys to your new house. That being said, if you are going to buy your property with your own funds, you can overlook expenses related to the mortgage. Otherwise, those will also add up to the final number.Mortgage entrySpanish banks usually finance up to 80% of the value of the property you want to buy. This is if you´ll be using it as your primary residence. Why is this important? It is important because you need to have the remaining 20% (at least) to access the mortgage.
This sum of money will vary depending on the price of the property and where it is located. Nevertheless, that is money you need to pay upfront.The notaryIf you are familiar with solicitors in the UK, then you´ll know exactly what notaries do in Spain. Their fee (called tariff in Spain) is fixed by the state. This means that regardless of the client, they charge their tariff depending on the value of the property.Their fee starts roughly around 600 Euros and, depending on the property price, goes up. For example, a 100,000 Euro property will cost you 875 Euro while a 250,000 Euro one will cost you around 1,000 Euros.
Once you have signed the deeds with the notary, it is time to go for our next step.The land registryRegistering the deeds you signed with the notary also carries a fee. The fee for the land register is again regulated by the state and is independent of the client. This means, that the only variable affecting the land registry fee is the value of the property.
Just as a guide value, the land registry usually varies between 400 and 650 EurosTaxesThe next step is taking care of the taxes inherent to the money transaction. These will be divided between new house and previously owned house operations.
New homeWhen buying a new house you have to pay VAT (IVA in Spain). This tax is again fixed by the state and is a percentage of the property value. Depending on the location, the fee is around 10% of the value of the property (25,000 Euros for a 250,000 Euro home). Adding to that, the Documented Legal Acts Tax also needs to be paid by the buyer and oscillates between 0.5 and 2% depending on the region.
Previously owned homes do not pay any of the above taxes. That being said, these properties pay Property Transfer Tax (ITP in Spanish). This tax depends on the location of the house but oscillates between 6 and 10%.Mortgage additional costsIn the case you will not need a mortgage to access paradise, then you can skip this section and go to the conclusion. Otherwise, keep on reading.
Property valuationBefore loaning you the money, the bank needs to valuate the property. For this, they need an appraiser. The whole endeavor will cost you around 250 and 600 Euros depending on the company.
Some banks will charge you up to 2% of the total loaned capital as a "take out mortgage fee”. Bear in mind this is not all banks.ConclusionLiving in paradise involves some extra paperwork and taxes but will pay back in smiles and happiness. Don´t hang a picture of the sun setting over the Mediterranean Sea in your home buy one with a window so you can see it every day.
Move into your dream house and live the life you always wanted, Spain is closer than you think!
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