 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. |
