In recent times and with the economic crisis, the housing market in Spain has suffered a serious setback and it is not at all certain when or if it will recover its previous glory. Nevertheless, many people continue to invest in holiday homes here (especially around the East and South coasts) and it is ever important to be aware of the likely costs involved in the process when you are Buying a property in Spain.

As a rule of thumb, you can take it that additional costs will add up to about 10% of the purchase price for the property. A rough breakdown of these would include:

Taxes on purchase: If you are buying a new property, the purchase will be subject to 8% VAT (IVA or Impuesto sobre el Valor Añadido) plus an additional 0.5% Stamp Duty (Impuesto de Actos Jurídicos Documentados). If the property is second-hand (i.e. it has had a previous owner), then the operation will be subject to 8% Transfer Tax (Impuesto sobre Transmisiones Partimoniales y Actos Jurídicos Documentados).

Legal Costs: These can vary considerably but Most Spanish lawyers traditionally in the region of 1% of the purchase price plus 18% VAT. Strictly speaking, you do not need a lawyer but it advisable to seek out good legal advice throughout the process as things can sometimes get more than a little complicated especially when buying properties in country areas. If you look for a good English-speaking lawyer Spain has quite a number of them, especially along the coastline. Your embassy or consulate should normally be able to provide you with their contact details.

Notary: You will need to have the deeds (escritura)of purchase written up by a notary public (notario). Notary fees are regulated by the state so the actual amount you should not vary from one notary to another but will depend on the value of the property you are purchasing. If you are also signing a mortgage agreement, the deeds of the mortgage will also be signed before a notary and the cost of doing so is roughly the same as for the deeds of purchase themselves.

Land Registrar (Registro de la Propiedad): The land registrar will usually charge about 40% of the notary’s fees.

Mortgage: It is important to establish exactly what setup fees the bank will charge you for setting up a mortgage with them. If you decide at any moment to change banks, it is also important to establish from the outset if there will be any additional fees involved. The banking sector in Spain is a very dynamic market so it is important shop around to make sure you get the best possible deal.

If you need the assistance of a translator or interpreter (notaries can insist on this if they think that you are unaware of what you are signing), you will also have to compute this cost normally in terms of either based on an hourly rate for interpreters or the number of words you need translating.

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