Cost of House Purchase

What would be the approximate cost of  a straightforward sale in the region of €45 000, please?

Are you selling or buying a house at 45k ?

When selling I would say  keep 10 per cent back. This should be more than enough to cover estate agent, IVA/taxes and legal fees.  You may even have some monies left over.

If buying then I would say add 12 per cent to the purchase price and this should cover everything.  All taxes, legal fees, NIE, POA. They say add 10 but in my experience it was more. I notice the lawyers do over estimate to ensure you have enough monies for completion.  If they do you will get this back, I did.

Hope the above helps 

Depends where you're buying. No good adding 10% on if you are buying in the Valencia region as tax on all properties in now 10% by itself. Now recommended 14% of the buying price should be budgeted for. 

Thank you all for your helpful replies.  We're buying, and it's not in Valencia. We already live here and have NIEs so that's not going to be an expense. 

Hi, can i just clarify the system, for my own benefit please.

Looking at the postings, if i was both selling and buying, at say 50k for reckoning.

I would have to allow 10% on each transaction, costing me 10K or 20% in fees overall, is this what your saying here?

Hi Brian

I'm doing the same as you buying and selling.  Basically I was told to keep back 10 per cent of whatever I sell my property at to cover estate agent fees, tax and legal costs. I think this sounds  about correct as the lawyer keeps 3 per cent for taxes and the estate agent charges 5 per cent plus IVA then of ourse the legal fees.  Bear in mind you can claim the tax back if you are  entitled to but I have been told this can take quite a while.

I'm buying again but this id another big expense as you know. I  worked this out to be at around 12 per cent of my purchase price paid.  Like the person says below this may be higher depending on where you live.

I love Spain but it's pricey to move house, ha!

Around 10-15% of the purchase price 

If the property is resale:  

                   * Transfer tax (ITP)  8% but in Costa Blanca which is 10%

                   * Notary fees -  €400-€900

                   * Land Registry fees - €200- €500

                   * Property valuation: 300€-400€ 

                    If you need a mortgage:  Stamp Duty Tax  1.5% of the mortgage deeds + 1% lender´s commission

If the property is newly-built:

                    * VAT of 10%(  4.5% in the Canary Islands).

                    * Stamp Duty of 1,5%

In both cases:  Lawyer`s fees: €1,000-€2,000

In the UK there are estate agents fees payable by the seller and taken at the point of completion usually.  

You didn't mention estate agency fees Maria, that must also bump up the percentage?

Maria,

Are there tax implications in buying a second home in order to get a rental income?  I suspect there are, but would welcome some clear facts and figures, please.

Thank you,

Donna

If you mean the taxes on purchasing a second property, such as has been introduced in the UK for stamp duty on buy-to-lets etc., then no, as far as I know, the transfer tax on property in Spain is the same regardless of how many other properties you already own. (of course, someone may be along soon to tell me that in Valencia it's different!)

If you mean will you have to pay income tax on rental income, then yes, regardless of whether you are resident or not, you will be liable for income tax on any rental income, and if the property is not rented, you will have to pay "imputed" income tax on it. 

i bought a huge house in catalunya last year for 31k euro, total fees were just over 3k, so yes about 10%,here.but does depend where you live of course.

Just to be clear here - since the transfer tax alone on resale properties in Catalunya has been 10% since 2013, are we to understand that the cost of purchasing your property was another 10% on top of that? 

ALL taxes and fees including legal came to 3,086 euro, i believe some costs were covered by the seller,

Not that it's any of my business, but unless you paid part of the purchase price in black money (i.e. under-declared the true purchase price) or the seller paid your transfer tax (virtually unheard of), your figures simply don't add up, and will only serve to confuse other members. 

If you paid €31k, the transfer tax alone would have been €3,100. On top of that you would normally have to pay land registry and notary fees, plus your own lawyer's costs. Even if you're saying you paid €31K including taxes & fees, it doesn't stack up.

lol. no, nothing much stacks up in spain if you ask me, but that is exactly what i paid, certainly not looking to mislead anyone, it is what it is, have noticed talking to others, these 'fees' seem to differ from village to village, not just from region to region! maybe an expert may enlighten us, i would also be interested in taxes etc i would need to pay if i sold this property, after having reformed it, and supposedly added value to it.??

Keep your receipts for any work done. You will be liable to capital gains tax on any profit unless you are resident and buy another property. 

Don't know about Catalonia but, here in Valencia, the regional government have come up with a good scam by charging "complementary" tax. Property they consider has been bought for too low a price and doesn't match their valuation have had this tax applied. For example, buy a property at 40k and pay the transfer tax to make it 44k. They then reckon it is worth 60k so they charge a further 10% on the 20k difference. Some people have been hit up to 4 years after the purchase. 

A hangover from the days, as Roberto mentioned, when everyone paid "black" money to avoid the tax. 

As Bob says, keep all VAT (IVA) receipts for work done, and you may be able to offset some or all of the renovation costs against any capital gains tax - but unless you declare an "obra nueva" (which I'm guessing would involve applying for a building licence, having the work inspected and a new licence of occupation being issued etc., which I'm also guessing would mean mountains of red tape and hassle - but I'm guessing) there's probably a limit to how much you could claim for basic home improvements. I've seen a figure of 7% of what was paid for the property mentioned elsewhere. You need to discuss this with a competent gestor or lawyer. 

Going back to my previous post for a moment, you have a very specific figure for purchase costs ("ALL taxes and fees including legal came to 3,086 euro") so I would suggest you look to see if there's a breakdown of that figure (transfer tax, notary fees, land registry fees, lawyer) and also look at your escritura to see how much was actually declared as the purchase price, because it simply does not make sense. If you did indeed pay black money, this could seriously impact on your capital gains when you come to sell. 

Setting that aside for now though, if you are non-resident, 3% of the sale price will be held back in lieu of any capital gains tax arising - the difference between what you sell for, and what you paid, less any allowable renovation expenses, and also the €3,086 taxes & fees you paid on purchase. If the 3% is more than your tax liablilty, you will be able to claim back the difference; if it's less, you'll have to pay the extra. I think the tax on gains is currently about 19.5% - but it could be different in Cataluña, so again, you need to speak with a tax advisor / gestor. If the property is your principle residence, & you are a fiscal resident in Spain, you may be exempt from CGT if you reinvest the sale proceeds in another primary residence, or if you are over 65.

You will also be liable for Plus Valia which is levied by the local council and depends on the land value, how long you've owned the property and of course, where it is. If you sell through an estate agent expect to pay between 3-5% commission.

You'll also need to pay for an energy efficiency certificate - and who knows (I know nothing about Cataluña laws), maybe even a licence of habitation!

Welcome to Spanish property!

hiya both, and thanks for the imput, i paid cash with no black money,may 2015,am back in uk at mo,all my paperwork is locked away in safe,in spain.,i just remember that figure stuck in my brain for some reason,(not much else does)!!

one other thing that stuck in my mind at the time, was a 2k discrepency in what i paid and what was written down,i assume this was the agents fee.

i was a little concerned at the time of purchase, that there may be some back tax to pay at a later date, as the house would seem to be undervalued,( i made an offer on said property the previous year, at around 20k more) it was removed from the market at the same time, for some unknown reason,then back on market a year later much cheaper?......anyway, i guess only time will tell if i get stung at a later date, but hey it was dirt cheap so no complaints from me whatever happens, i still need to spend around 10k to make it nice,so well under 50k for a 5 storey 500sq mtr property overlooking the ebro,suits me sir..)

Briando:

I mentioned what are strictly costs and expenses ( Notary, registry, tax and lawyer). Of course every property transaction has agents commissions attached.

MusicDonna:

If you buy for renting, the tax burden of the purchase itself is same as if it was your first residency. You will then have to pay taxes on the rental income ( by way of VAT or Income Tax) depending on if the rental falls into the category of touristic rental or not.