Touchstone Spanish Mortgages

Click here to edit subtitle

Touchstone Fees

We charge a flat fee of 1.5% of the Mortgage amount. 

There is a minimum fee of €1000.

50% Paid upon signing Engagement Letter.

50% Paid on issue of the mortgage.

Buying Fees in Spain

All Banks charge a fee known as the Bank opening fee or Bank arrangement fee. This fee is taken from the loan amount at completion. Fees for Banks range from 1% to 2% of loan amount.

Other fees associated with a loan in Spain include the following and apart from valuation fee all fees are taken from gross loan amount at completion. Fees cannot be added to loan if the loan to value restriction has been reached.


Costs of buying property in Spain

As a buyer of property in Spain there are a number of costs and taxes over and above the property price that you will have to pay. Depending upon whether you are buying a new property from a developer, or a resale property from a private individual, you will either have to pay VAT & Stamp Duty, or a transfer tax. The different cases are explained below, along with the other costs and taxes that are common to both cases.


NEW BUILD FROM A DEVELOPER (OR BANK)

VAT & Stamp Duty (IVA & Actos Jurídicos Documentados – AJD)

These taxes apply for residential properties being sold for the first time (never previously occupied), or for commercial properties and plots of land. This is a national tax, so VAT is the same wherever the property is located (with the exception of the Canaries, which have their own version of VAT).

At present VAT (known as IVA in Spain) is 10% on the purchase price of residential properties (villa, apartment, etc), and 21% for commercial properties and plots of land.


The Stamp duty (known as AJD) is 1% of the price of the purchase, but might go up in some regions, so be sure to check on the latest rate. Both VAT and Stamp Duty are paid by the buyer, and if any deposit is paid before completion of the sale, such deposit will be subject to VAT at the moment of payment of this deposit. In this scenario there is no transfer tax to pay.


RESALE FROM A PRIVATE INDIVIDUAL

Transfer Tax (Impuesto sobre Transmisiones Patrimoniales – ITP)

This tax applies if the property is deemed to be a second or posterior transfer (i.e. not the first time a newly built home is bought), and is paid by the buyer. If any deposit is paid before completion of the sale it is not subject to ITP pro rata. However the full amount of ITP still has to be paid upon completion. In this scenario there is no VAT to pay, and stamp duty is already included in this tax.

The Transfer Tax rate is ceded to the autonomous regions, who can choose to apply the general rate, or their own rate.

The general (national) rule of ITP is 7%, but many of the autonomous regions have applied higher local rates. The rate you pay depends upon the autonomous region where you buy. In Andalucia it is 8%.


Income Tax Provision When Buying From Non-residents

If the seller is not a Spanish resident, the buyer has to withhold 3% of the purchase price and pay it to the tax authorities (application form 211). If this is not done the property will be considered by the tax authorities as the asset backing the capital gains tax liability of the seller. This condition is very unlikely to apply when purchasing from a developer.

Costs that affect both new build and resale property purchases

Legal Fees

You are strongly advised to hire a lawyer to help you during the buying process. Your lawyer drafts and reviews contracts on your behalf and can explain all the legal and administrative issues you face. Your lawyer should also carry out any necessary due diligence (checking ownership claim of the seller, charges on the property, permits, etc.) and arrange all the required documents to complete the process (property registration, tax payments, etc.).

A lawyer – Abogado in Spanish – will charge you according to the service you require. This will vary according to the complexity of the purchase. Many charge around 1.5% of the purchase price in legal fees.


Mortgage costs

If you choose to buy with a mortgage then this will incur several additional costs. First there will be the property valuation that the mortgage provider will require before granting the mortgage, this is paid for the by the buyer and can cost around 800 Euros. Then there will be the costs of the mortgage itself. This varies according to the provider, and even according to the particular branch. However there is usually some kind of opening fee of around 1% of the value of the mortgage. Finally a mortgage will increase the Notary expenses. ( Many Banks will waive this fee is you are buying a Repossession )


Notary Expenses

Notary expenses are nearly always paid by the buyer and are calculated in relation to the purchase price declared in the deeds of sale. To be on the safe side you should calculate Notary fees as being 1-2% of the purchase price declared in the deeds of sale. 


Property Registry Inscription Fees

Expenses related to inscribing the sale with the land registry are also nearly always paid by the buyer, and are calculated in relation to the purchase price declared in the deeds of sale. To be on the safe side you should calculate 1% of the purchase price declared in the deeds, though once again it depends upon the property and the area, and the fee could be considerably lower.


Plusvalía Municipal Tax

This is normally paid by the vendor, but it can become a problem for the buyer if the vendor fails to pay it. Buyers have to be particularly careful with this tax when the vendor does not live in Spain. 


Budget in the region of 15% For your Total Buying costs on a property over €150,000

Website Designed and Built by La Chispa Consulting www.lachispaconsulting.com