Costs of Buying & Selling
The costs of buying and selling a property in Spain
We get asked many times what the costs are for buying a property in Spain. When buying a Spanish property there are both costs for the buyer and seller. However, we notice there are a lot of uncertainties as to which costs belong to the buyer and which costs belong to the seller. In this article you will find the full breakdown of both costs for the buyer and seller.
|Costs for Buyers||Costs for Sellers|
(between 600-1000 euros)
|Property registry costs|
|Capital gains tax|
(variable 19%,21%,23% for 2018)
(1%) ex vat. (with minimum of 1500 euro ex vat)
|Property Transfer Tax|
For newly built properties
(IVA or VAT 10%)
|Income Tax Provision (Retención)|
(3% non-residents only)
|Property valuation costs|
(only if a bank mortgage is needed normally around 800 euros)
|For newly built properties |
Stamp duty 1.5%
Notary fees → Buyer
These are the costs for drawing up the title deeds which in Spain is called the “Escritura”, and ar paid by the buyer. Notary fees are based on the selling price stated in the deeds of the property. As an example, you pay around 675 euros for a property of 100.000 euros. But for a property of 1 million, you might have to pay 1000 euros.
Property registry costs → Buyer
It is normally a standard fee also based on the selling price in the deeds. These costs may vary depending on the municipality you live in and in most cases, it is between 400 and 650 euros.
Lawyer Costs → Buyer & Seller
Solicitors can also handle all paperwork and normally charge around 1% of the selling price.
Property transfer tax → Buyer
When buying a second-hand property, the buyer has to pay property transfer tax. For newly built properties, the buyer pays instead VAT or IVA of 10%.
The property transfer tax is a tax that varies from region to region
In the Costa del sol the property tax is as follows:
8% for the amount from €0 – €400,000
9% for the amount from €400,000 – €700,000
10% for the amount from €700,000 and up.
For properties price under €400,000 is 8% property transfer tax. For a property price at €1,000,000 its calculated:
€0,00 till €400.000,- (8%) €400.000,- * 8% = €32.000,-
€400.000,- till €700.000,- (9%) €300.000,- * (9%) = €27.000,-
€700.000,- till 1,000,000 (10%) €300.000,- * (10%) = €30.000,-
Total transfer tax for a property priced at 1,000,000 = €89.000,-
Property valuation costs → Buyer (only if you need a mortgage)
In case a buyer needs a mortgage, the bank has to make a valuation of the property. In this case, the buyer will pay around 800 euros for this appraisal.
For newly built properties → Buyer
When buying a new built property directly from the developer you pay IVA or VAT of 10% instead of paying the normal property transfer tax. On top of that, you also pay a Tax on documented legal acts or IAJD in Spanish
Agency Commission → Seller
When you sell a property through an estate agent you will have to pay a commission fee. Estate agents usually charge 5% commission in Spain. The seller can deduct the Agency commission fee from his capitals gains tax.
Capital gains tax for 2018 → Seller
The tax is broken down as follows:
19% for the first 6.000 euros
21% from 6.000 till 50.000 euros
23% from 50.000 onwards
A Property was bought in 2005 for 100,000 euros and sold in 2012 for 250,000 euro. The capital gain is (250,000 – 100,000 = 150,000).
19% for the first 6000,- euros = 1,140
21% over 50,000 euros = 10,500
23% over 94,000 euros = 21,620
Total tax: 33,260
There are exceptions when the seller does not have to pay capital gains tax and that is when the sellers of the property are older than 65 and have lived in Spain officially as a resident for at least the last 3 years.
All official invoices relating to the purchase of the property, such as refurbishing, notary expenses, lawyer expenses and estate agency fees can be deducted from the capital gains tax.
Income Tax Provision for non-residents – Retención → Seller
If the seller is not a Spanish resident he has to pay 3% income tax provision or retención in Spanish which goes directly to the tax office to cover any taxes resulting from the sale. However, the seller can claim for a refund if he believes that his tax liability is less than 3%.
Energy certificate → Seller
From June 1 2013, by Spanish law all property owners who want to sell or rent out their property need an energy certificate. These certificates must be issued by a qualified certifier, such as architects, surveyors or technical house engineers. The costs for such a certificate are around 150,- euros. The invoice for this certificate can also be deducted from the capital gains tax.
Plusvalía → Seller
The plusvalía is a tax over the increase of the value of the ground the property is on. This is paid to the local town hall. The plusvalía is calculated on the basis of 3 factors: The period of ownership, the location of the property and the cadastral ground value.
The plusvalía tax can easily be requested at the town hall where the property is located.