Hidden and legal fees to consider when buying a Spanish property
Buying property in Spain is a dream and aspiration many people have, whether you’re eyeing up a holiday getaway or planning a permanent move. But before you jump in headfirst, there are quite a few things to consider. The initial price of the property you’re looking at is just the beginning, and the property market works very differently in Spain when compared with the UK or the US, so there are several extra costs that can surprise you along the way.
That’s where our expert English-speaking conveyancing solicitors come in at Gascon Bernabeu; we’ll break down the different expenses you’ll encounter when buying a home in Spain, help you make a well-informed decision, and support you throughout the entire process from beginning to end.
Legal fees are the first step in the process
Before you start thinking about taxes or property values, one of the first costs you’ll face is legal fees. While it’s not absolutely necessary to have an English-speaking lawyer to help you through the process, it’s highly recommended, especially if you’re a non-Spanish speaker, as the law can get quite complicated.
One of our conveyancing lawyers can guide you through the entire legal process, ensuring everything is in order with contracts, property ownership, and compliance with Spanish law. Legal fees generally cost around 1% to 2% of the property’s value, so it’s best to factor this into your budget from the beginning. It is an extra cost, but it’s a small price to pay for the peace of mind of knowing that everything will be handled on your behalf, making the entire process smoother and more secure – especially if you’re handling the process remotely from outside of Spain.
What you need to know about Spanish property tax
Next up, you’ll need to consider taxes. When buying property in Spain, the taxes you pay depend on whether the property is new or pre-owned. If you’re buying a pre-owned property, you’ll be paying the Property Transfer Tax (ITP), which usually falls between 6% and 10% of the property’s value, depending on the region. On the other hand, if it’s a new property, you’ll pay VAT (IVA) at 10%, along with Stamp Duty for new builds, which ranges from 1% to 1.5% of the property’s price.
But now, there’s more to consider. Earlier this year, the Spanish government proposed a new tax specifically targeting non-EU residents, which could be as high as 100% of rental income or the property’s value. This proposal is part of the government’s efforts to address housing availability for Spanish locals. While the full details are still being worked out, it’s clear that these changes are likely to significantly affect foreign buyers looking to purchase in Spain. So, if you’re thinking about buying a Spanish home, you’ll want to stay on top of these changes and consider acting sooner rather than later.
Mortgage opening fees, and other costs to budget for
Beyond legal fees, the property fee itself, and taxes, there are a few additional expenses to keep in mind. If you’re thinking about taking out a mortgage on your property, there are some upfront costs like property valuations (usually between €200 and €500) and mortgage opening fees, which can range from 0.5% to 1% of the loan amount. On top of that, if you’re using a real estate agent to help manage some of the processes, their fees usually range from 3% to 5% of the property’s sale price. Sometimes the seller may cover this, but not always, and if the latter is the case, then the buyer will end up covering the cost.
It’s easy to overlook the basics while you’re focusing on the legal fees and taxes, but don’t forget to think about the ongoing costs of owning a property, too. Once you’re the proud owner, you’ll need to set up services like water, gas, and electricity. It’s also a good idea to budget for home insurance and general property maintenance. These costs might seem small, but they can add up, so it’s best to plan ahead to keep your new home running smoothly.
Buying property in Spain is definitely an exciting adventure, but a little planning goes a long way in making everything run smoothly. To make sure you don’t get caught up in any surprises, our experienced team can guide you through the process. With the right advice, you’ll be able to enjoy the process of getting your home in Spain without worrying about the fine print.
If you’re buying a property in Spain, our team of English-speaking conveyancing solicitors is here to help. We’ll guide you through the legal process, ensure you understand all the taxes and fees, and help you make the best decisions for your future.
For more information on our Spanish conveyancing services, visit our service page.
If you’re ready to get in touch, you can reach out to us via email at info@gbabogados.co.uk, via the contact form here on our website or give us a call at +44 (0)20 3137 1320 and book a no obligation consultation with one of our experts. We’re here to help.