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Property costs

Research all legal issues and costs involved. Your solicitor/lawyer will advise and assist you.

Before you have decided on a property it's important to be fully aware of the legal process and costs involved in your puchase. Obtain professional advice and check your finances, taking account of these additional costs.

Be well prepared with your finances; taxes can be high when buying. Set up a direct debit from a native bank account to pay for bills. Be careful not to miss payments and read those red letters; foreign banks are not lenient with those who don't pay up in time. If you're considering renting out the property when it's empty, bear in mind that advertising in the UK for a property abroad could result in tax demands from both the English and foreign authorities. 


The costs involved in the purchase of a property

The purchase of a property involves a series of necessary administrative procedures that represent an additional cost over and above that of the property itself. The largest of these costs are those of the title deed, registration, notary and taxation, which mainly depend on the price of the property in question.

In general terms, if the property is not to be mortgaged, the costs are:

a) Taxation. If it is a second hand property, you will have to pay the "Impuesto de Transmisiones Patrimoniales" [Property Transfer Tax], which varies between 4%, 6% and 7% of the price of the flat depending on the area in which the property is located. If it is a newly-built property, the buyer will have to pay the 7% "IVA" [VAT].

b) Notary. Using a Notary Public for the signing of the public title deed is an obligatory requirement. Notary fees are regulated, although the final cost will depend on the price of the property.

c) Property Registration. Upon formalisation of the title deed, the property must be recorded in the "Registro de la Propiedad" [Properties Register], a public body that is responsible for recording all the properties in the country and which you should first consult regarding whether the property has any additional encumbrances. The costs in this case are those arising from the recording of sales contracts and mortgages.

d) Documented Legal Acts. Only in the case of newly built properties. In order to calculate the cost, the region in which the property is located and the price of the deed must be taken into account. In the provinces of Almeria, Alicante and Murcia, the tax is always 1% of the value of the deed.

All the above costs must be paid on the day the public deed is signed.

 
 
 
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