Buying property in Spain (Taxes and costs)

In general, the costs associated with the purchase of a property will vary, depending on the price of the transaction. They are usually between 10% and 13% of the purchase price, depending on the value of the properties and whether it is a first sale by the developer or a second or consecutive sale of a completed property. The detailed expenses are as follows:

Lawyers’ fees

Depending on the complexity and length of the process, the lawyers’ professional fees may vary, but are usually charged at a rate of 1% of the value of the transaction, plus the applicable VAT. The fees are agreed at the beginning of the contractual relationship and do not vary during the course of the relationship unless the initial assignment undergoes substantial changes at the express request of the client.

Except in cases where, for reasons beyond the firm’s control, the transaction has not been completed, our lawyers do not charge specifically for hours of work, meetings, drafting of documents, communications or travel, as experience has shown us that in such cases, if we were to apply the rates recommended by the Bar Association, the costs for the client would usually tend to rise.

Our minimum fee in any case would amount to 1.500 Euros plus VAT.

Notaries’ fees

All notaries in Spain must charge the same rate for the same service, although the cost of notarial documents varies, depending on several factors such as the price or value of the goods involved in the transaction, the number of intervening parties, the number of pages in the document, etc., which makes it difficult to calculate the final sum of the invoice. They usually range between 400 Euros and 1,500 Euros.

Property Register fees

As with notaries, Property Registrars must keep their fees in line with certain rules that are the same all over Spain. As a general rule, their fees are lower than notaries’ fees.

Transfer Tax (Property Conveyance Tax) and Stamp Duty (for Documentation of Legal Acts)

a)    Transfer Tax

This is only applied to second-hand property purchases (resale) and is paid after the public deed has been signed.

This tax is one of those that have been transferred by the State to the Autonomous Communities (regional governments) and over which they have a certain regulatory capacity, so the rate to be paid will depend on the Autonomous Community where the real estate object of the sale is located. In Andalusia, where we usually provide our services, the tax rate is currently 7% of the value of the property. 

b)    Stamp Duty

This tax is exclusively charged on the purchase of new housing, not second-hand (as the latter is subject to the Transfer Tax).

The rate applicable in Andalusia is currently 1.2%, which is applied to the value of the property.

The Autonomous Communities (regional governments) establish reduced tax rates for certain cases, such as the acquisition of one’s usual home at a price below 130,000 Euros by individuals under the age of 35, or up to a price of 180,000 Euros if the person acquiring the home has an officially-recognised disability, etc.

VAT

The VAT rate for the first purchase of a new home acquired from a property developer is 10% of the price, except in the case of social housing under a special regime or public development, in which case the tax rate is 4%. 

The same rate of 10% applies to parking spaces included in the purchase of a property (with a maximum of two units) and to storage rooms. If the purchase includes a third garage, this is taxed at 21%.

Garages and storerooms purchased from the developer after and independently of the purchase of a property are taxed at 21% VAT. The same rate applies to commercial premises.

Other expenses

Apart from those that have already been mentioned, purchasers will need to cover other expenses that, in theory, should not excessively increase the final cost of the purchase operation, and which include the contract and connection fees for utilities and other such supplies, obtaining the NIE, the drawing up of a power of attorney or a will in Spain, and all administrative taxes.

Do you still have queries on this subject? Have a look in the FAQs about purchase of real estate in Spain.