Posted on 09 August 2017
Buying a property in Spain probably means fulfilling a long held ambition. But getting there presents certain challenges, such as an added language barrier and a new set of rules and regulations. This often throws up a whole host of questions around a variety of topics, leaving you scratching your head. Don’t let this put you off. Think of all those Brits already living the dream that needed the same questions answering once upon a time.
Let’s try and answer five of the most common questions that crop up during the property buying process in Spain:
What’s the minimum deposit I’ll require to buy in Spain?
Having made you immediate down payment to secure the property, you can enter an initial contract where 10% is paid, or complete immediately.
Find out everything you need to know about buying property in Spain by downloading your FREE Spain Buying Guide here!
What additional costs will I have to pay?
This will very much depend on whether the property in brand new or is being resold.
- A transfer tax (ITP) – 6.5-10% – is always paid on a resale property
• Notary fees – €300-€1,200
• Land Registry fees – €400-€600, or 0.4% of the purchase price.
• Independent solicitors fees – €1,000-€2,000
• Legal fees – typically 1% of the purchase price plus VAT, but with a minimum fee.
• VAT (instead of ITP) on new-builds – 10%
• Stamp duty for a new-build – 1.5% of the purchase price
How much should I budget for taxes and fees?
Set aside 11-14% of the purchase price to pay for taxes and fees. This might differ slightly depending on the property type and location.
How does inheritance tax work in Spain?
The tax band is currently set at 7-34%. The amount payable depends on the region the property is located in and the total value of the assets at the time of death. An exemption of €175,000 per legitimate inheritor (spouse and children) will only be applicable if the distribution of assets is reflected in a Spanish will, prepared by your Spanish lawyer and signed in the presence of a Spanish Notary Public.
Are there any purchase tax issues I should be aware of?
The seller of the property is required to pay capital gains tax – the difference between the purchase and the sale price. If they insist upon paying part of the price in cash, in an attempt to reduce the amount of tax they pay, they will be committing tax evasion. Don’t agree to a cash payment, otherwise you will be guilty of assisting tax evasion.
When you’re ready to make the move, click here to download the Spain Buying Guide. It’s completely FREE and packed with great advice.