Cost of Buying a property in Spain
Spain now derives more of its foreign income from tourists than any other country in Europe and foreigners buying property in Spain has become very popular. Due to low European interest rates, now is a good time to buy property in Spain.
If you are considering buying a property in Spain the initial costs of buying are the following:
As well as the cost of the property, the buyer will be liable to pay for transfer tax (in case of second hand property) or VAT (in case of a new one) which at present is 10% in the region of Cataluña (includes Barcelona, Costa Brava, Costa Dorada, Garraf…). Only in case of a new development the buyer will also pay 1,5% of the prize on stamp duty.
The property registration office will charge the buyer a fee to change the new deeds into the buyer name’s. It will vary depending on the sell-purchase prize. This is usually around 500 €.
There will also be notary charges of the sell-purchase deed. The charge is on a scale depending on the contract prize.
In total you should allow 1% of the purchase price for costs.
Banks may also charge an opening commission for mortgages loans or to issue draft checks. Clients should verify these in detail with their Bank.
Annual costs of owning a property in Spain
The local town hall charge “IBI” which is an annual real estate tax. The previous owner is obliged to give the buyer copies of previous bills.
Community charges apply when you buy a property on a community development. These covers things like maintenance, swimming pools, gardens, cleaning, insurance building, security, repairs, …
The new owner will also be liable for imputed income tax, payable annually and based on the value of the property, is an annual tax charged as 0,5% of the “catastral” value of the property. If you are a resident in Spain you will not be charged this on your principal home.
If the property is rented the owner will also be liable for a property owner income taxe based on your income from the property. This is 24% of the rent obtained.
Finally, when you come to sell te property, capital gains tax will be charged on any profit you have made.