Taxes buying property in Spain

Taxes Buying Property in Spain

What are the costs of buying a home in andalucia

You have something saved, your economic and work situation is more stable, and you decide that it is time to buy a home.

Known that the total cost of buying a home is not just the price you have to pay the seller.  Here you will find out what the real cost of buying a home is. What are the costs of buying a home besides the selling price? These additional expenses are for all home purchases, and go in proportion to the selling price. It means that the higher the price, the more expenses you will have. All these expenses that are detailed below are paid by the buyer. Surely you have heard that the cost of buying a home is 10% additional to the price. 

1.-Tax on capital transfers (ITP)

This is the tax you pay when you buy a second hand home. Currently in Andalusia is at 8% on the sale price (up to € 400,000). There is a discount on this tax, for which 3.5% is paid and the following requirements are met:

  • The purchase price of less than € 130,000
  • The house is intended for the habitual residence of the buyer
  • Buyer is under 35 years old

2.-The Value Added Tax (I.V.A.)

This is the tax that is paid when buying a new home, ie first transmission. The developer or builder sells you the house, and you are the first owner. Currently this tax is 10%. If it is official housing (VPO) this tax is reduced to 4%. In cases where you buy a new home, you have to pay the seller the sale price plus VAT, and it will be the one who is responsible for settling the tax in the Treasury.

3.-Tax on Documented Legal Acts (A.J.D.)

This tax is only paid on the purchase of new homes that carry VAT. Currently in Andalusia, this tax is 1.5% of the sale price. There is a reduction of this tax to 0.3% in cases of purchase of official housing (VPO), when the purchase is less than € 130,000 and the buyer under the age of 35. So, you have to know that the purchase of a new home in Andalusia, in general, liquidates a tax on the Hacienda of 11.50%.

4.-Notary

To formalize the purchase of your new home you need to make a public purchase-sale deed to be signed at a notary’s office. The cost of this service is fixed by regulations and depends directly on the amount of the property (at a higher price higher cost), although it can be increased by other factors such as the number of pages that the deed has, the number of copies, etc.

Notaries charge a fixed fee. All notaries in Andalusia charge the same (they have little margin to make a discount), and the choice between one and the other depends on personal preferences. The cost of this service, taking into account the average price at which the homes in Andalusia are sold, can be around 650 €.

5. Registration of property

Once the deed of purchase and sale is signed, the notary is in charge of quickly sending the information in a telematic way to the Property Registry. So that the new owner is registered as soon as possible. Again, these costs are set by regulation, and depend on the purchase price. The cost of this service, following the example above can be around € 400.

Taxes-buying-property-in-Spain, who pay?

All expenses described above are those derived from buying a home in Andalusia. They  correspond to the buyer, with one exception. If it is agreed that the notary’s expenses are “According to law”, then it is up to the seller to pay the deed of the deed, and to the buyer the first and subsequent copies. This means that approximately 70% of the notary’s cost is paid by the seller and the other 30% by the buyer.

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