BUYING A HOUSE IN SPAIN
Transfer Tax Payable by the buyer for the purchase of any property provided the seller is not a developer or trading business of resale properties.
On 300,000€ (400,000€ to 700,000€) – 9% =
Above 300,000€ 10%VAT at 10% and STAMP DUTY at 1.5% – For any property where the vendor is a developer or promoter for NEW PROPERTIES. VAT at 21% and STAMP DUTY at 1.5% – for land and commercial premises.
Notary fees and property registry inscription fees
Plus Valía Tax
The total official costs involved in purchasing a constructed residential property should be around 9-10% for resale properties or around 12% for new properties if VAT is paid on the purchase price, plus lawyer’s fees.
Ongoing costs involved in owning Spanish property
Local Rates (IBI)
Local rates are payable annually, and are calculated from the cadastral or rateable value of the land. The cadastral value takes into account the value of the land plus the value of the building. Upon this value, each municipal Town Hall decides on the percentage to be charged in respect of local rates. In the case of Marbella for example, the formula applied is 0,9644% (for 2007) of the rateable value of the property, which is almost always far less than its true market value.
Rubbish collection & water rates (Basura) (Agua)
The rubbish collection rate is applied by the Town Hall according to the property and payable every 6 months. For an apartment rubbish collection is approximately €180 and a villa approximately €300 per year. Water consumption is calculated by the water meter consumption in cubic meters and is payable every 3 months. Payment can be made directly at the Town Hall or by bank with direct debit instructions.
Generally speaking, the Community Homeowners’ Association is a legal entity comprised exclusively of the owners of the apartments in a building, or villas on an estate. The purpose of the Community or Urbanisation is to own and maintain the common elements of the building or estate in question, and each homeowner is obliged to participate in the expenses of the upkeep of the community areas and services on a proportional basis with the other owners. Usually, a homeowner’s percentage of the costs is fixed by the size of the apartment, or plot, divided by the total area of all the apartments or plots. A budget for the annual community expenses is presented at the annual general meeting of the homeowners, and they or their authorized representatives must approve the budget by majority vote of those present at the meeting. Expenses can vary substantially according to the services provided, and normally include salary of the reception and garden workers, lift maintenance, repairs to common elements, rubbish collection, water for community gardens, electricity for lighting communal areas, insurance, security, and administration fees A typical 2 bedroom apartment in a building or area with a hall porter, swimming pool, and a small garden, could cost between €120 to €300 per month in community fees. In the case of an individual villa in an estate of villas, community fees are often less since the private gardens and exteriors of such properties are generally not maintained by the community, and the community fees are limited to road and roadside garden maintenance, basic common service maintenance, and security.
Electricity is very expensive in Spain and is billed monthly or bimonthly, depending on the area. Minimum rates are applicable whether you are in residence or not, and the minimum varies according to the amount of electricity your house could potentially use with all power and lights turned on. The minimum charge for an apartment might be between €75 and €150 per month. Charges for a villa are from about €200 to €700 per month, depending largely on the extent of the electrical installation and the use of heating of water and air conditioning/heating.