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Acquiring properties in Torrevieja or any other city in Spain is accompanied by some additional expenses. Their total amount will depend on the market the property was selected on (the primary or the secondary market), their prices, and location.

Among the extra costs connected to Spanish real estate acquisition, notary services, land registry, tax costs, and bank fees for a mortgage loan can be distinguished. Below you will find detailed information that will help with the preparation for a real estate transaction.

Expenses when buying a home in Spain

Additional costs that absolutely every homebuyer will have to face include:

Notary

One of the most obvious extra costs to bear in mind when buying a home (both new and pre-owned real estate) in almost any country is notary services. The salary of local notaries is regulated by the state. This suggests that they charge the same amounts for identical services.

In the case of a standard purchase and sale contract, buyers usually have to pay between 700 and 1,000 euros. Notary service prices depend on the housing value. As an example, for the purchase of a residential unit worth 100,000 euros, the notary will take about 850 euros, and for the purchase of a unit worth 250,000 euros, the services will cost about 1,000 euros.

The Land Registry

Registration of sales contracts signed by a notary also costs some money. Again, these fees are fixed by Spanish legislations and directly depend on the housing price. As a rule, their amounts vary between 400-700 euros.

Taxes

The homebuyer should also prepare in advance additional resources to pay Spanish taxes. Their amounts will be determined by the value of the chosen unit and the market type in which it was purchased, primary or secondary.

Individuals acquiring a brand new property will have to pay more taxes. This is due to the fact that local new buildings are subject to the VAT (IVA), value-added tax. In 2022, VAT is equal to 10% of the property price. To put it another way, buyers must save an extra 10,000 euros in order to purchase a unit for 100,000 euros.

It is worth to remember that the Canary Islands have a lower rate for this tax. VAT on local housing purchases is only 6.5%. This tax may be as low as 4% for those buying state-owned properties, based on the Autonomous Community and the type of the selected unit.

The next tax that purchasers of new Spanish building projects should pay is the tax on documented legal acts (IAJD, also known as AJD). The property location is one of the key factors applied to this tax.

Buyers of pre-owned houses should be prepared to cover property transfer tax (ITP). It is connected to the percentage applied on the tax base basis and on the autonomous community where the unit is located.

It should be emphasised that lower rates apply to young people, large families, disabled people, and purchasers of subsidised Spanish real estate. For example, large families acquiring real estate in Madrid have to pay 4% of the purchase price as long as the purchased home becomes their main place of residence.

The costs for issuing a mortgage loan in Spain

Extra expenses that a buyer of Spanish real estate who intends to take out a mortgage loan may face are:

Appraisal of property 

If buyers intend to take out a mortgage loan, they will have to pay for the property appraisal. As a rule, the bank is the organisation of this procedure. After receiving the results of the property appraisal, the financial institution’s employees will be able to determine the amount of mortgage they are ready to offer to the creditor.

Typically, Spanish banks finance up to 80% of the purchasing price or estimated value. Nevertheless, some customers are able to receive 90% to 100%. This year, the price of this service ranges from 250 to 600 euros. It depends on the company handling the process and the type of property. Some banks pay for these expenses on their own.

Commission

Spanish banks may charge a commission from their customers either for opening an account or for obtaining a mortgage loan. Its amount does not typically exceed 2% of the loanable funds in agreement with the financial institution. However, there are now an increasing number of Spanish banks that refuse to collect these fees.

Assistance with selecting and acquiring real estate in Spain

One of the most extensive databases of Spanish residential properties, covering the leading regions of the country, is presented on the website Spain-Real.Estate. Contact the representatives of the aggregator in order to get a comprehensive consultation on any issue assosiated with a real estate transaction. Clients of Spain-Real.Estate can rely on complete support during the transaction process and after-sales service, in addition to assistance with choosing the best housing option.