The Costs Associated with Buying a Property in Spain: What You Need to Know Before Acquiring Your New Home

The Costs Associated with Buying a Property in Spain: What You Need to Know Before Acquiring Your New Home

Before diving into the purchase of a property in Spain, it is essential to understand the costs associated with this transaction. Spain imposes a series of taxes and fees that can significantly impact the total purchase cost. In fact, estimates suggest that the costs associated with buying a property in Spain can represent up to 13% of the total purchase price.

This percentage may seem high, but it is important to understand that these costs include various elements such as VAT, notary fees, property taxes, and other administrative expenses. By understanding and planning for these costs in advance, buyers can avoid financial surprises and ensure that their budget aligns with their expectations.

We will take a detailed look at each component of the costs associated with buying a property in Spain, providing clear explanations of what to expect at each stage of the process. Whether you are considering purchasing a new property or a resale property, understanding these costs is essential for making informed decisions and ensuring a smooth real estate transaction.

1. Taxes:

   • VAT (Value Added Tax): For new properties, VAT is currently set at 10% in 2023.
   • ITP (Property Transfer Tax): For second-hand properties, ITP usually varies between 6% and 10% depending on the autonomous community.

2. Registration, Notary, Cadastre, and AJD:

   • Property Registration: Fees associated with registering the deeds signed by the notary, generally between €400 and €700.
   • Notary: Notary fees for drafting contracts, regulated by the state and varying according to the property price.
   • Cadastre: Fees for registering the deeds signed by the notary, also regulated and dependent on the property price.
   • AJD (Tax on Documented Legal Acts): Tax applicable to the purchase of new properties, the amount varying by region, usually between 1% and 1.5% of the purchase price.

3. Management or Lawyer:

   • Administrative Management: Fees for the services of a management firm, which can assist in handling tax payments and other administrative formalities. At GestaliHome, we are associated with Gestali, a consultancy firm specialized in legal, accounting, and tax matters. The administrative or management fees are fixed, meaning no percentage is taken from the transaction. Both companies work closely together to provide comprehensive service to the client.
   • Lawyer: Some buyers choose to hire a lawyer to advise them throughout the property purchase process in Spain. However, when you buy with us, we offer a complete service that eliminates the need to hire other professionals. Our experienced team is here to guide you at every step of the process, providing complete legal, administrative, and tax assistance, allowing you to conclude your transaction with confidence and peace of mind.

By thoroughly understanding these different costs, you will be better prepared to manage the expenses associated with buying a property in Spain. Keep in mind that amounts may vary depending on various factors, so it is recommended to consult a professional for tailored advice to your specific situation.