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Buying Property in Spain

9. The costs of buying property in Spain

I'm often asked about this one and of course there's no hard and fast answer. But, as a rule of thumb, be prepared to fork out 10% of the purchase price in various fees and taxes.

It's important to bear this in mind before you even start looking for a property because it can come as a nasty shock to buyers who haven't put enough aside to pay for all the extras.

You may pay more or less than 10% depending on your lawyer's charges, the notary fees and the level of the "plus valia" (a bit like capital gains tax levied on the increase in the value of the property since it last changed ownership).

It's a common practice in Spain to under-declare the true value of the property in order to reduce the level of plus valia. Be careful on this one because the Spanish are starting to clamp down on what has previously been a quite acceptable tax dodge. You'll find more details on this rather grey area in my ebook A Warts and All Guide to Buying Property in Spain.

Lawyers' fees vary but are usually around 1% of the sale price plus the costs of any official documentation needed. Don't just go for the cheapest lawyer to save money - he or she could cost you a fortune in the long run! Make sure your lawyer is from a reputable Spanish firm or a firm based in your own country with a strong reputation and special expertise in the Spanish property market.

If you use an estate agent this could prove to be one of your biggest extra costs. Commission fees can run into thousands of pounds, depending on the purchase price. Average commissions are around 6% but some agents charge 10% or more (and that's after they've already hiked the price far higher than the owner's actual asking price!)

Many agents, responding to buyer dissatisfaction with their fees, are now charging rates more akin to those in the UK - a more palatable 2.5 - 3%.

Of course if there are any problems or disputes over the sale (say, for example, the property is found to be carrying "hidden" debts) you'll incur greater legal costs.

It's common practice in Spain to put down an initial small deposit to persuade the agent and or owner to remove it from the open market. After preliminary legal checks prove satisfactory, it's normal to pay a 10% deposit to secure the property. This has the advantage of stopping the iniquitous UK-style gazumping - you lose your deposit if you pull out of the bargain but the owner has to pay you double your deposit if he or she reneges on the deal.

You'll find details of all the fees and taxes involved in a property purchase in my ebook.

10. And finally ...

Content for these pages is © Ann Knight, all rights reserved.

Related Links

Andalucia Real Estate - Property for sale in Andalucia.

Buying a property in Spain - Ann's own site promting her book.

Properties In Europe - European property portal with a searchable database of properties to buy and rent in France, Spain, Italy and Portugal. Includes for French, Spanish, Italian and Portuguese properties.

Book your holiday:

Hotels in Spain

Car Hire in Spain

Organised Tours in Spain

Buying property in Spain

Choosing the right location

Buying as an investment

Must I use an agent?

Must I use a lawyer?

Buying "off-plan"

The importance of learning Spanish

Retiring in Spain

Buying with a community

Costs of buying

And finally ....

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