Buying & Selling Guide: Part 7

Part 7: What costs can a buyer expect?

The last part of our Buying & Selling Guide is finally here, and we’re focusing this week on the costs a buyer can expect when purchasing a property on the Costa del Sol. On average, most buyers in Spain can expect to have buying costs of between 9-11% of the property value for resale properties and around 12% for new build properties, plus lawyers’ fees. If you haven’t already, make sure you check out the previous week’s part of the guide which was all about Contracts.

Transfer Tax (ITP)

Provided the vendor is not a developer or considered a re-sales trading business, a Transfer Tax (ITP) is payable to the buyer for any property or land (apartment, villa, land, garage or commercial land).

The tax applicable to pay is dependent upon the difference between the price and the ‘minimal fiscal value’ of the property. An amount equal to 8% is applicable up to a property value of 400,000. If the property is valued between 400,000 and 700,000 then 9% is applicable, and finally, 10% applies to a property value above 700,000.

For developers and real estate professionals in the resales business, a reduced transfer tax of 2% is applicable if the property is bought and sold within 5 years.

VAT (IVA) and Stamp Duty (AJD)

For VAT (IVA) standard rates differ depending on the type of purchase.

  • New Residential Property: 10% IVA

  • Land & Commercial Property: 21% IVA

With Stamp Duty (AJD) standard rates can vary from region to region, and this tax will be applicable if a mortgage is requested for the purchase of a property, or when a new residential property is purchased.

  • In Andalucia: 1.5% AJD

Property Registry Fees & Notary

Notary fees can be on average around +/- €3,000 depending on the level of complexity of the transaction in relation to the value of the property and title deed.

Municipal Added Value Tax (Plusvalía)

This is a tax applied by the town hall and can vary from a few hundred to a few thousand euros depending on the value of the property purchased.

As you can see, when buying a property in Spain there is a lot to consider beyond the cost of the property itself. It is important when searching for a property on the Costa del Sol that you bear these buying costs in mind, on top of the deposit you are also obliged to pay. Remember, our summary above is only a guideline and we would always recommend seeking legal guidance to clarify any costs should expect when buying a property in Spain.

We hope you enjoyed our 7-part guide on Buying & Selling property on the Costa del Sel! Make sure to check through our blogs to read all of the previous weeks. And of course, if you’re interested in buying or selling a property on the Costa del Sol, get in touch with us now using the contact details below to find out how we can help you.

Phone: (+34) 952 527 300