Purchasing a Spanish house: taxes and charges in 2021!

The purchase of a house in Spain can be both exciting and intimidating for several reasons, particularly for expats moving abroad and buying property for the first time in Spain. The method often differs between countries and can vary in some or several ways from where you come from. In addition to the price of the land, you must also include other costs and expenses. If you want to buy a house in Spain, then look at the 2021 taxes and charges. apartments studio for sale

A mortgage is not the only big cost in the process when you purchase a property in Spain, and you will have to do your estimates to make sure you do not experience any unwanted surprises. Banks in Spain normally fund 80% of the value of the property (if the property is used as your principal residence), which means they need 20% of the value of the property to pay a deposit. However, this is not all: before you can become the owner of your new homes in Spain, there are many other costs and taxes that must be taken into account and charged to formalize the operation.

Between the assessment of the land, the notary, the register and the related fees, specialists suggest savings of 10% to 12%, depending on the location and price of the property. These figures are up to 20% of the mortgage deposit you need. Please notice that you will have to pay these extra fees if you do not need mortage. These are all compulsory costs related to a home purchase, but the full payment depends on whether you purchase a new home or an existing one, where you purchase the property and the sum involved. A description of each one and the estimated price/value in 2021 is given here:

 

Buying an estate: extra costs

The Notable

The Registry of Land

Fiscal taxes

Taxes payable when purchasing a new Spanish home

Taxes payable for the purchase of a property in Spain

A consultant

Spain's additional mortgage costs

Assessment of the land

Fee for opening

Buying an estate: extra costs

 

The Notable

One cost to be considered when purchasing a new or used house in Spain is the office of the notary. Notaries in Spain do the work that a solicitor tends to do when you purchase a house in the UK, and the payments, called tariffs, are governed by the State. In the case of the public sales certificate, the rates are, depending on the property's worth, between EUR 600 and 875. For eg, you would pay about EUR 850 for a flat of 100,000, while you would have to pay about EUR 1,000 for a flat of EUR 250,000.

The Registry of Land

It also costs money to file the documents which the notary has signed. Again, these charges are regulated and are directly dependent on property prices, although typically between EUR 400 and EUR 650.

Fiscal taxes

The purchaser of a house must also spend some additional money in order to pay taxes, even though the sum depends on the house price and whether it is new or secondary.

If you buy a brand new home in Spain, you have to pay more taxes, most importantly VAT (IVA in Spanish). VAT will be 10% of the property price in 2021. In other words, for a EUR 100,000 home and EUR 25,000 for a EUR 250,000 home it would mean EUR 10,000. It is worth noting that VAT in the Canary Islands is just 6.5% for the purchase of property (this is the IGIC-Indirect General Canary Islands Tax). For public housing, VAT can be 4%, but this varies depending on the Autonomous Region and the social housing category.

In the event of the purchase of a new home in Spain, a second VAT tax has to be added: (IAJD, also often known simply as AJD). This tax is still charged by the consumer and relies on each Autonomous Community as well. Please note that these taxes are not applicable to previously owned properties.

Taxes payable when purchasing a new Spanish home

Self-employed Group AJD VAT

Andalusia

1.5% 10.0 percent

Aragon 1.5% 10.0% 10.0%

Amazonia

1.5% 10.0 percent

The Balearic Islands are 0.5% 10.0%

The Canary Isles

1.0 percent - 6.5%

2.0 percent Cantabria 10.0 percent

Castile-The Sleeve

1.5% 10.0 percent

Leon and Castile

1.5% 10.0 percent

Catalonia Catalonia

2.0 percent 10.0%

Ceuta 0.5% 10.0% 10.0%

Madrid 0.75% 10.0% Madrid

Valencia Valencia

2.0 percent 10.0%

Far-reaching

2.0 percent 10.0%

Galicia 1.5% 10.0% 1.5%

The River River

1.0 percent 10.0%

0.5 percent Melilla 10.0 percent

Murcia Murcia

1.5% 10.0 percent

Navarre 0.5% 10.0% 10.0%

The Basque Land

10.0 percent 0.5%

 

The most critical tax for pre-owned homes is the property transfer tax (ITP). The sum in this case depends on the percentage of the registered price and the autonomy in which the house is situated, but in general the rate is between 6 and 10 percent. Currently in 2021 the following rates apply:

Taxes payable for the purchase of a property in Spain

Self-employed Group ITP

 

Andalusia 8.0%.

8.0 percent Aragon

8.0 percent Asturias

8.0% of the Balearic Islands

6.5% of the Canary Islands

10.0 percent Cantabria

9.0 percent Castile-La Mancha

Leon and Castile

Eight.0 percent

10.0 percent of Catalonia

Ceuta 6.0% 6%

6.0 percent of Madrid

10.0 percent Valencia

Extremadura, 8.0%

10.0 percent of Galicia

The Rioja 7.0%.

6.0 percent Melilla

8.0 percent Murcia

6.0 percent of Navarre

 

The Basque Land

Seventy percent

It should be noted that there are also lower concentrations of VPOs (subsidized housing), large families, people with disabilities and young people. In Madrid, for instance, large families who purchase a separate house would pay 4 percent of the price reported as a property tax, given that the home they buy is their principal residence.

A consultant

The only optional cost of purchasing a property is to get a "manager," who can process tax payments and make other paperwork. Hiring a consultant such as this can be especially helpful for expats who speak no Spanish. They may not have specific payments and normally are only contracted when a mortgage for the property is opened for purchase at a cost of approximately EUR 300.

Spain's additional mortgage costs

Both the above taxes and fees apply, whether or not you have to pay a mortgage. If you intend to buy property in Spain by mortgage, make sure that you do not foresee any extra charges.

Assessment of the land

If the buyer applies for a mortgage, the buyer must pay a valuer to valuate the land. This is also facilitated by the bank because, after this assessment, the bank knows how much funding it can provide. As reported, Spanish banks lend a sum equal to 80% of the purchase price or the valuation value, although some finance 90%-100% of the purchase price, typically settling at the lowest level. In 2021, depending on the company conducting the operation, the type of property and its value, it will cost between EUR 250 and EUR 600. Some, but not all, banks are going to cover these expenses. When the assessment is complete, it shall be valid for 6 months after the issue date.

Fee for opening

Some banks can charge you a fee either to open an account or to take off a mortgage, which may be up to 2% of the capital loaned, as the financial institution has agreed. However, many banks do not apply this penalty. Notice that banks can also require you to take home or life insurance to take such mortgages.

So it is time to find your dream home in Spain with all this in mind. And don't forget that our idealistic hypothecary experts will also help you find the best hypothecary to meet your needs.