La Alhambra Palace in Granada, Spain

I have looeked at my private contract (its in Spanish) and so far cannot see a reference to plus valia tax. This is normally paid on a resale but can be paid by the seller of a new house. Looking at the list of what I have to pay from my solicitor it did not include plus valia.  See quote below:-

The Plusvalia Tax is a tax set by the local authorities and based on the increase of the value of the land from the date the owner acquired the property to the time of the present sale.

The local authorities determine the amount of plusvalía to be paid for each house purchase in Spain, depending on the area where the property is located. The market value or sales price of the property does not have an effect on the plusvalía tax.

Normally, but not necessarily, the seller pays the plusvalía tax. However, this will depend on the sales agreement. The tax is calculated according to the ratable value of the property and the number of years it has been in the ownership of the vendor.

I have looked at the summary of our contract sent by our solicitor ( who was provided by the selling agent  - foolish of us I know ), and it states that payment of the local Plus Valia tax is our responsibility.

Has anybody else actually been asked to pay this? What is the amount likely to be? I feel that "our" lawyer has acted in the Developers' interest on this one. Also could anybody who has already  completed be able to tell me what the Notary and Land Registry fees are likely to cost on a purchase price of 211,500?

Every website I look at seems to give slightly different figures. A Mortgage Broker has told me that set-up costs for a mortgage are approx 4%. Is this in addition to the costs of 12% approx that are normally mentioned? If we arranged an equity release on our home here to fund the purchase in Spain would there be a major saving?

Apologies for the rambling nature of the questions, but all help is appreciated.

This all seemed so simple in November 2005 when we reserved the apartment !! It now seems like a potential minefield.

Regards to all,

MCK

Hi MCK,

I think rule of thumb is 1% for stamp duty and under 1% for the notary fees. (Ours was less than 0.5% but it all depends on the value of the property)  We funded our purchase through an equity release as we didn't want to send money over every month and get stung on the exchange rate.  But it does all depend on the amount you need to borrow.

Daniela.

It is the responsibility of the developer to pay the Plus valia tax on the initial sale of the property.

However, some developers sneak in a clause in the contract,  so that this is passed to the buyer.

If you add 12-13% to your initial purchase price you will be covering 'all' costs.  Unless you have a dodgy solicitor charging over the odds. You can negotiate a solicitors costs down if you think they are going to charge too much. There are plenty who will charge 1%, or less, if you intend to purchase other properties for investment purposes.