When calculating the costs of buying a home in Spain, you should bear in mind that there is more to it than just the price of the property.
Here is a list, to make sure you are not taken by surprise. Go for it: living on the Spanish coast is worth it!
Clearly, buying a home involves a lot of costs for the buyer, on top of taxes. And it is not always clear why they are paid or to whom. Let’s clear it up:
Notary fees, known as “aranceles” in Spanish, are set by law, so all notaries charge the same fee for a given service, according to the value of the property. A reduction of 10% at the most may be possible.
According to the Civil Code, “the costs of granting a deed shall be paid by the seller, and the costs of the first copy and other costs after the transaction shall be paid by the buyer, unless otherwise agreed.” Therefore, a different agreement with the seller is also possible.
The role of the conveyancer is very important when buying a property in Spain. The conveyancer is in charge of procedures such as registering the property in the Land Registry, paying the associated taxes… and, if you apply for a mortgage, the bank usually requires the services of one of these professionals.
Once the procedures have been carried out, the conveyancer should send you an invoice for their services and a breakdown of the cost of each service, as well as proof of payment of taxes to guarantee that the process has been carried out in a timely manner. The services of the conveyancer usually cost around 400 euros.
Unless otherwise agreed, the registration of the property in the Land Registry is at the expense of the buyer. The price of registering a property in the Land Registry varies depending on the value of the property as stated in the deed of sale. The price will range from 24.04 euros to 2,181 euros.
Lawyers’ fees are not regulated, so they can vary quite a lot. However, typically lawyer’s fees will range from 1,500 to 3,000 euros, but it depends on the value and complexities associated with the purchase of a property, so they can be considerably higher.
If you apply for a mortgage at the bank, you will have to pay additional costs:
- The appraisal of the property. It usually costs between 250 and 600 euros, depending on the type of property, the price range of the appraisal company, the valuation of the property…
- Arrangement fee. Some banks charge an arrangement fee, which can be up to 2% of the capital loaned, although this can be negotiated. Nevertheless, more and more banks are getting rid of this fee.
- Bank charges. The bank may charge you for issuing a bank cheque for the payment of the property, or for the transfer of funds. This can also be negotiated.
- Mortgage fees. Let’s not forget the most important cost, the monthly mortgage repayments. This will depend on the interest applied by the bank, the value of the property, the number of years over which the mortgage is to be paid…
⚠⚠⚠ Before making any payments, make sure you get an invoice showing each item broken down with the VAT, identity and Tax Identification Number (NIF) of the person who issued it. In the case of invoices issued by notaries and registrars, you can appeal against any of the charges if you disagree with them.
Taxes on the purchase of a home
These are an essential part of buying a home. VAT, Local Property Tax or IBI, equity instruments, stamp duties… if you want to know more, read this post in which we explain them in detail.
There are certain expenses that you must also take into account once you are a homeowner and want to move into your new home, which will be incurred for as long as you live there.
In the case of appartment buildings and developments, you will have to pay a monthly fee to maintain the facilities, contract communal services, etc. The fee will depend on what is established and approved by the General Meeting of Owners each year.
It usually includes electricity and water for the communal areas, insurance, repairs, maintenance of areas such as the swimming pool, entrance hall, lifts, parking spaces…, community management…
The utilities are the basic services you need to be able to live in the property. Rates can vary a lot, so you will have to look at different offers in order to choose the one that best suits your needs.
- Landline telephone and internet services. Many providers, both local and national, offer different packages that may also include, in addition to telephone and internet connection, cable TV. These services are usually paid for on a monthly basis.
- The electricity bill is paid monthly, with a base rate payable regardless of whether the property is occupied or not, and a minimum rate that will vary according to the estimated use.
- Water supply. This is paid at the rate set by each local council, and is calculated according to water consumption in cubic metres.
- Gas. If you want natural gas in your home, there are also many different options, some in combination with electricity, and you can choose between the free market and the regulated market.
The rubbish tax also depends on each municipality, and includes the collection, processing and disposal of waste. It is usually paid once or twice a year, and varies from 0 euros in some localities to more than 150 euros in the most expensive areas.
If you apply for a mortgage, the bank will require you to take out home insurance to protect your home against any contingency. Even if this is not the case, it is highly recommended that you take it out. Otherwise, there will be a much higher cost if you don’t take out insurance and something goes wrong (fire, theft, flood, etc.).
The premium will depend on the insurer and the insurance coverage. There are different types of policies that may cover different risks. We recommend that you ask for a quote from several insurers in order to make a comparison and be as informed as possible. According to the OCU, the average cost of a comprehensive policy for a 120 m2 home is around 250€ per year.
Have you found the ideal house to start a new life? Take into account the costs of buying a home in Spain before starting the buying process. Remember, at Sonneil we can help you with everything you need.