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This article is part of our guide How to buy a house in Spain which you will find in our Real Estate Consulting section.
As we saw in our previous article, mortgages never cover more than 80% of the purchase price. This means that you need to have at least 20% of the property price available, plus about 15% on top of the cost of the property to pay for taxes, lawyers’ fees, notary fees, etc…
Taxes and expenses
Most costs are the responsibility of the buyer in Spain, and costs can vary considerably from one region to another.
In general, the additional fees and expenses to be paid by the buyer amount to 8 to 12% of the purchase price and include:
- Land transfer tax of 5 to 10% (existing properties).
- VAT of 10 % (new buildings only).
- Notary, land registry and cadastral fees 1-2.5%.
- Lawyers’ fees 1-2 per cent (including VAT).
Estate agent fees are usually paid by the seller, but it is advisable to check with your estate agent in advance, as sometimes fees are split. For your information, estate agents usually charge the seller around 5% of the final sale price plus 21% VAT.
Tax on capital gains
In the case of a sale, two taxes apply: If you make a pre-tax profit, then you will have to pay between 19% (non-resident) and a maximum of 23% on en profit. The second tax is:
“Plusvalía” of the municipality for the seller
In Spain, the local “plusvalía” depends on the municipality and can vary greatly, from zero to several thousand euros.
Sellers who want to minimise their taxes sometimes suggest notarising a lower sale price and receiving the balance in an envelope under the table.
Of course, this is not a good idea, as this approach can have very negative consequences. Firstly, it can lead to legal problems. Secondly, if you agree on a lower sale price now, you will have a higher tax bill yourself when you want to sell the property again.
Non-residents and foreigners
If you are a non-resident or foreigner, you can find more information about taxes in our article Taxes in Spain for non-residents and foreigners: Taxes payable on the purchase or sale of a property
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