Expenses when buying a property in Spain, part 2
In this article, we continue with the topic of the most important expenses that you must take into account when buying a property in Spain.
Expenses related to the signature of the deed
The deed of purchase will officially certify the transfer of rights over the chosen property, and its effects are established by Spanish legislation. Therefore, its provisions have greater legal force than the provisions included in the deposit contract.
This act, as its name indicates, is signed in the presence of a notary, and its price is regulated by the State, which, in turn, depends on the value of real estate objects of contract, and other factors such as the number of guarantors or the amount of the transaction. If the property is purchased in Spain, and that implies a new mortgage, since subrogation is not possible, two notarial deeds must be signed separately: one of the purchase and the second of the mortgage loan.
Below we will talk about taxes and mandatory payments for the purchase of a second hand home in Spain.
– Tax on the transfer of property rights (ITP) to be paid for the purchase of a second hand house or apartment in Barcelona and is of 10% of the cadastral value of the property. This percentage may vary depending on your age, among other factors.
– Tax on the registration of title deeds and legal acts (IAJD) to pay for signing the deed by the notary and its subsequent registration in the Property Registry in Spain. Although it may vary depending on the type of property and the Spanish autonomous region, it usually varies between 0.1 and 1.5%.
– Agency fees: only if the purchase was made with the help of a mortgage, so it was calculated by the bank manager, who participated in the issue of the mortgage. The fee varies depending on the company, and usually a deposit is paid, and after registration of the purchase and mortgage when the exact amount of these fees is known, the remaining funds are returned to the buyer.
– Municipal tax on the increase of the value of urban land (IIVTNU), formerly known as the municipal tax on capital increase, subject to an increase in the value of urban land from its purchase until the moment of its sale. The calculation is based on the cadastral value of the land, the number of years during which the property was owned, the tax growth rate set by the fiscal authority of the municipality in which the property is located.
– Registration in the Property Registry
The costs of registration in the Property Registry are not fixed and may vary depending on the value of the properties in Spain, their location and individual characteristics. This tax is approved by the local government, and rarely exceeds 1% of the cadastral value.Posted on: Updated: