Costs of Buying A Property in Spain
Property Spain: Villa and Apartment Sales
There are various costs involved in the purchase of a property in Spain. As a general rule be prepared to pay 10% in costs of the purchase price of the property. You will be responsible for:
- Legal Costs
- Notary Costs
- Value Added Tax (currently 7% in Spain)
If you are renting your property to holiday makers and are still residing in your own country you will be responsible for income tax on the amount received over and above any finance / mortgage interest paid, if any. If you generate any income from the property you buy in Spain you should discuss this with either the tax authortiies and or your accountant to ensure you will not receive any surprise tax invoices.
Lawyers costs can vary a great deal but usually about 1% of the puchase price is considered the norm. A good solicitor is worth the fee as they could save you a lot of misery and money and costs in the long run. It is important your lawyer has a good knowledge of Spanish property law, it does not really matter if they are based in youyr own country or Spain, as long as they have the relevant expertise.
You need to be wary of estate agents charging fees to the buyer. Some agents try charge a fee to both the buyer and seller of the property. It is important that you or solicitor establish this very early on in the proceedings. You will need to bear this in mind when and if you come to sell the property. Some estate agents are known to charge as much as 6% of the sale price, howver some agents are now offering a much more palatible 2.5 - 3%.
The usual practice in Spain is that the purchaser secures the property with a 10% deposit which is non refundable. This is a safeguard for the buyer as well. If the owner decides not to proceed with the sale of the property for whatever reason, the owner has to pay the buyer double the amount of the deposit as a penalty for not completing the transaction. Please discuss all of these factors with your appointed solicitor.
If you are not living in the property full time it would be prudent to appoint a local management company to look after things at the property when you are not around. Management companies can be appointed to check the property on a weekly or monthly basis. Get the property ready for your arrival and make sure your property is prepared for your rental clients arrival. |
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