Spain is a frequently chosen location for buying property whether as a vacation home, a rental property, or a permanent residence. However, prior to wrapping up the purchase, understanding the expenses involved is crucial. This article will dig into the expenses associated with purchasing a home in Spain. 

What costs are involved in buying a house in Spain?

Buying a house in Spain necessitates numerous expenses, such as:

1. 1. Property price: The first and most clear cost is the purchase price of the property, which will vary on the location, size, and age of the property.
2. 2. Notary fees: When you buy assets in Spain, you’ll need to have the acquisition agreement and the title deed certified. Notary fees are set by law and are typically between 0.1% and 0.5% of the purchase price.
3. 3. Property registration fees: After the buying agreement and title deed have been notarized, the property will need to be recorded with the Land Registry. Property registration fees are based on the property’s value and typically range from 1% to 2% of the acquisition price.
4. 4. Legal fees: Engaging the services of a legal representative is highly recommended when acquiring real estate in Spain. The costs for legal assistance may fluctuate depending on the attorney you select but typically range between €1,000 and €2,000. Your legal counsel will take charge of all the legal formalities involved in the transaction, such as verifying the property's ownership and guaranteeing that all dues and levies are set
5. 5. Taxes: There are various charges that you must settle while purchasing a property in Spain:

• Transfer tax: This tax is paid by the buyer when buying a resale property. The amount of transmission tax varies depending on the region, but it’s typically between 6% and 10% of the acquisition price.
• Value Added Tax (VAT): If you’re buying a new property from a contractor, you’ll need to pay VAT as an alternative to transfer tax. The current rate of VAT in Spain is 10% of the acquisition price.
• Stamp duty: Stamp duty is a tax that’s paid on permissible documents, counting the purchase agreement and title deed. The rate of stamp duty varies conditional on the region, but it’s typically between 0.5% and 1.5% of the purchase price.
• Mortgage fees: If you’re planning to finance your property purchase with a debt, you’ll need to pay additional fees. These fees can include a mortgage setup fee, valuation fee, and notary and registration fees for the mortgage agreement.

Costs involved with buying a new property in Spain

Buying new real estate from a constructor in Spain usually necessitates payment of Value Added Tax (VAT) as opposed to transfer tax. The present-day VAT percentage in Spain amounts to 10% of the buying cost. Additionally, you would be required to make payments for notary charges, property registration charges, legal charges, and mortgage charges if you opt for financing the purchase via a mortgage.

The cost involved in resale home buying in Spain

In case you're purchasing a second-hand property in Spain, you'll be required to remit transfer duty in lieu of VAT. The transfer tax amount varies according to the area, but it is generally within the range of 6% to 10% of the buying cost. Additionally, you'll be responsible for covering expenses related to notary services, property registration, attorney fees, and mortgage fees if you're availing financing to purchase the property.

Common costs accompanying the purchase of a house in Spain

In addition to the costs mentioned above, there are other costs that you may need to pay when buying a house in Spain. These can include:

1. 1. Property inspection fees: It’s a good idea to have a property inspection done before you make the purchase to ensure that the property is in good condition. Property inspection fees can vary depending on the inspector you choose, but you should expect to pay between €300 and €500.
2. 2. Bank fees: If you’re transferring money from another country to pay for the property, you may need to pay bank fees for the transaction.
3. 3. Utility setup fees: When you purchase a property in Spain, you’ll need to set up utility accounts for water, electricity, and gas. There may be setup fees associated with these accounts.

Income Tax Provision when buying from non-residents

If you’re buying a property in Spain from a non-resident, you’ll need to withhold 3% of the purchase price and remit it to the tax authorities. This is to ensure that the non-resident seller pays any applicable taxes on the sale. If the non-resident seller doesn’t owe any taxes, they can apply for a refund of the 3% withholding.

Costs of buying a house in Spain calculator

Various digital tools are accessible on the internet that can assist in approximating the cost of buying property in Spain. These tools consider the buying rate, levies, charges, and additional expenditures to provide an estimate of the total amount you may have to spend..

Owning costs after buying a house in Spain

Once you’ve purchased a property in Spain, you’ll need to pay ongoing ownership costs. These can include:

• Property tax (Impuesto sobre Bienes Inmuebles or IBI): This tax is paid annually and is based on the value of the property.
• Community fees: If you’re purchasing a property in a community, you’ll need to pay monthly or annual community fees.
• Utility bills: You’ll need to pay monthly bills for water, electricity, and gas.
• Home insurance: It’s a good idea to have home insurance to protect your investment.

Ongoing fees after a property purchase in Spain

In addition to the ownership costs mentioned above, there may be other ongoing fees associated with owning a property in Spain. These can include property maintenance fees, property management fees, and repairs and renovations.

In conclusion, buying a house in Spain involves several costs and fees, including taxes, notary fees, legal fees, and mortgage fees. It’s important to work with a trustworthy lawyer and real estate agent who can lead you through the process and guarantee that you understand all of the costs involved. Moreover, owning a property in Spain involves ongoing ownership costs that should be factored into your budget. By understanding the costs involved, you can make an informed decision and enjoy your property in Spain.