Buying Property in Spain Hidden Costs!!

Full video of buying a property in Spain: • Guide to Buying Proper...
Are you dreaming of owning a piece of paradise in Spain? 🌞 Before you dive into the exciting world of Spanish real estate, it's crucial to understand all the associated costs beyond just the purchase price. From taxes to legal fees, we've got you covered with this comprehensive guide.
When purchasing property in Spain, buyers must be prepared for various costs, starting with taxes. The most significant tax for property buyers is the Property Transfer Tax (ITP), which ranges from 6% to 10% of the purchase price, depending on the region. For new properties, buyers must pay Value Added Tax (IVA) at 10% and Stamp Duty (AJD) between 0.5% and 1.5%.
Key Dates:
Before Purchase:
Reservation Fee: A small deposit to reserve the property, typically around €3,000-€6,000.
10% Deposit: Paid upon signing the preliminary contract.
At Purchase:
Balance of Purchase Price: Paid upon signing the public deed of sale.
Taxes and Fees: To be settled on the same day.
Tax Forms:
Modelo 600: For Property Transfer Tax (ITP).
Modelo 620: For non-residents paying ITP.
Modelo 601: For Stamp Duty (AJD).
In addition to taxes, buyers should budget for legal fees, typically around 1% of the purchase price. This covers the cost of hiring a solicitor to handle the transaction, ensure all paperwork is in order, and conduct due diligence. Notary fees and land registry fees can add another 1%-2%.
Examples:
Apartment in Barcelona:
Purchase Price: €300,000
ITP (10%): €30,000
Legal Fees (1%): €3,000
Notary and Land Registry Fees (1.5%): €4,500
Total Additional Costs: €37,500
Villa in Costa del Sol:
Purchase Price: €500,000
ITP (8%): €40,000
Legal Fees (1%): €5,000
Notary and Land Registry Fees (2%): €10,000
Total Additional Costs: €55,000
Don't forget ongoing costs such as property management fees, community fees, and annual property taxes. Be well-prepared and make your dream of owning a Spanish property a reality without any financial surprises!
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By Louise Misiewicz & Simon Misieiwcz of Optimise Accountants