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Before your offer is accepted and the private sale and purchase document has been signed by both parties; then it is important to be aware of the costs involved over and above the agreed purchasing price. Here is a breakdown of the costs you should expect; some are obligatory charges such as transmission costs or purchase tax; and others are value added tax related fees for notary, administration and registration. They are as follows - and hence account for a total of between 9% and 12% (and depending on the purchase price banding the last revision introduced by the Spanish government in 2012 – see below*) and which are over and above the sale price offer you have placed:
Notary fees for the preparation and notarising the escritura title deed – The Notary, Notario – is popularly referred to as a "super lawyer" in the sense that they are an independent legal officer acting on behalf of the government to ensure that any document witnessed and approved by them complies with the very latest Spanish legal rights and codes. It is a legal office that has its roots in the times of ancient Rome; and as such has a long and established history as an officer of the law and the established legal system. This office has the power to authorise testaments, wills, and any other contract involving the exchange or movement of an estate or property. Among the duties involved in the sale and purchase they will ensure that the vendor is who they say they are and has the full and competent authority to act for the sale without recall to relatives or heirs; that the property is free of all charges or debts on the actual day of the exchange (this is ensured by direct contact with the Spanish land registry office at the time of completion); and where applicable - that the full terms and conditions of a mortgage are content and included within the deed. Finally, the notary will ensure that all parties fully understand the contract that they are signing - and when required then full translation services will be offered. The cost of this will depend on the extent of the document, the type, description and size of the property and the mortgage conditions. Generally speaking the average apartment costs would be around 500 Euros; and if a mortgage deed is to be included then the costs wil be twice this amount. Iva (vat) will then be added at 21%. NOTE: that as of January 2012 – the Spanish government increased the value added rate of tax for services from 18% to 21%.
8%* Purchase tax (equivalent to VAT or transmission taxes) in Andalucia - If you are purchasing a property in Spain then these taxes are due within 30 days of the notarized property exchange. Since January 1 2012 a new banded purchase tax regime was introduced, and for the region of Andalucia (BOJA de 31 de DICIEMBRE de 2011, Ley18/11,255) these are as follows - up to 400,000 Euros 8%, 400,001 to 700,00 Euros 9% and over 700,001 the tax due is 10%. Garages and storerooms also are subject to a similar banding as follows – to 30,000 Euros 8%, 30,001 to 50,000 Euros 9% and over 50,000 then 10% is due. NOTE: There are also variations in the purchase tax between different regions in Spain – ie Canaries 7%, so please check beforehand.
Impuesto Sobre Actos Jurídicos Documentados (AJD) - Where applicable, this is a 1.5% tax on 'documented legal acts' most probably a near equivalent to the stamp duty charged in some countries. It is charged for all new properties, and also for obra nueva transcriptions - ie declaration of extensions to a pre-existing property. It is a duty not due on a standard re-sale of second hand properties.
Property Land Register (Registro) – is the department responsible for publicly registering the title deed to your property. Registering your deed with the local office of the Registrar of Deeds for Granada province will usually cost approximately 400 Euros; and must be paid no more than 30 days from when you have taken title or fines will be charged after that date.
Electricity (luz) - Generally speaking you should allow 150 to 200 Euros for the standard contract of 3.500 Watts to transfer the title to your name. Thereafter you receive billing (monthly or bi-monthly) based on consumption and power rating (wattage) – approximately 25 to 100 Euros per month according to supply rated and consumption. The connection to all utilities is bonded from assurance of your Spanish bank account; and all monies are taken by direct debit. Note that in older properties, and prior to exchange of title, the utility company may demand an independent installation inspection and/or modifications prior to any re-certification. This can cost up to 800 Euros or more depending on the size and age of property together with any additional work involved.
Water (agua) - Again the cost of the contract title change is approximately 150 Euros; with quarterly bills thereafter. Depending on consumption allow 25 to 40 Euros per month. Direct debit bonded - the billing may also include, in some areas and villages, costs for basura (rubbish collection) and alcantarillas (mains sewage and drainage).
Gas (gaz o butano) - Outside of the major cities, gas infrastructure is rare in southern Spain. As a consequence the most common form of provision is by bottled gas. Butano, gas bottles cost around 15 Euros for the refill and delivery; while the contract per bottle costs 45 Euros the cost of the installation certificate is approximately 100 Euros and is again dependent on the extent of the installation, type of use and the range of appliances connected.
Legal fees - A lawyer generally charges between 1% to 1.5% of the sales value; and thereafter for additional documents like power of attorney, cadaster applications, etc. It may be wise to consult with your lawyer in advance and agree a set fee for the work. A gestor (solicitor) will often charge much less for the same work and searches.
Community fees - Where they apply, in urban developments or complexes with communal areas, there is no standard fee. Much depends on the areas and facilities provided (ie.; pool, communal gardens/terraces, lifts, cleaning, porter, maintenance, insurance, water supply, etc) and the range can be anything from 50 to 100 Euros per month. These charges will be due either monthly, quarterly or in some cases annually. It is important that prior to exchange of the property that your legal representative obtains a certificate from the community of owners that there are no debts, missed payments, additional costs or pending unpaid charges notified by the community (at the last agreed AGM) and therefore ultimately due on the property prior to exchange.
Contribucion Urbana IBI - That is the local land tax for an urban property and or urban land, due annually and generally paid in 2 amounts (though not necessarily half yearly) to the local authority or municipality. In Almunecar an average 2 bed apartment will pay annually around 200 Euros or more - 50% in August and 50% in November.
Contribucion Rústica IBI - Is the local land tax for rural land rather than property, and is also due annually for payment to the local authority or municipality. In Almunecar this will depend on the size of the land, and its use and can range from a few cents to less the 30 Euros per anum.
This is a general list of the costs that the buyer should expect to pay for a typical exchange of property title in Spain, and to this you may also need to allow for including mortgage deed costs, independent valuations, independent structural surveys, and/or technical building inspections.
NOTE: Some real estate agents in Spain can also charge the buyer a fee for part or all of the costs involved in the property sale transaction. Please be certain in advance that the estate agent with whom you are dealing with makes you aware of these hidden charges in advance. Here at Tropicana Estates the prices advertised include all sale commissions.