How high are realtors´ and lawyers´ fees in Spain? What about other property purchase costs?

Standing proud among its European neighbours, Spain has long been a prevalent choice for foreign real estate investors. Between its easy-going lifestyle, world-renowned gastronomy and favourable climate, this historic kingdom remains an attractive option for those seeking to grab their own slice of Mediterranean life.

Purchasing Real Estate as a non-resident

There are no explicit restrictions on purchasing property in Spain as a non-resident. However, it’s worth noting that foreign investors can expect to pay more in overall fees and taxes than resident investors purchasing a primary residence.

Non-residents seeking to purchase real estate in Spain will need to acquire a TAX ID Number or NIE (Número de Identificación de Extranjero) ahead of the transaction in order to be able to pay any associated taxes.

Property Valuation

There are two independent value measurements associated with real estate in Spain, upon which various taxes and costs are calculated.

The Cadastral Value (valor catastral) of a property refers to the estimated capital value of a property officially recorded in the land registry (Catastro). This value is determined by the local council based on various factors, such as the property’s location and surroundings, surface area and construction quality. This value can be found on the property’s IBI receipt and via a local land registry branch.

The Purchase Price refers to the sum agreed upon for the sale of the property. This value tends to be significantly higher than the cadastral value and typically forms the basis on which most sales taxes are calculated.

The fees and taxes associated with purchasing real estate in Spain fall into two main categories - sales taxes and maintenance taxes. As the names suggest, sales taxes are the one-time fees charged on the purchase and transfer of a property, while maintenance taxes are the regular fees associated with property ownership.

What are the costs like when buying a property in Spain?

Transaction Costs
		Who Pays?
ITP/IVA	6.00 - 10.00%	buyer
Stamp Duty (AJD)	0.40% - 1.00%	buyer
Land Registry Fee	0.40% - 1.00%	buyer
Notary Fee	0.10% - 0.40%	buyer
Legal Fees	1.00% - 2%	buyer
Real Estate Agent´s Fee	3% - 6%	seller
Costs paid by buyer	7.40% - 14.40%
Costs paid by seller	3.00% - 6.00%
ROUNDTRIP TRANSACTION COSTS	10.40% - 20.40%
See Footnotes Source: Global Property Guide

Sales Taxes & Fees

New Properties

• Brand new properties incur different sales fees than second-hand real estate, with VAT or IVA (Impuestos sobre Valor Añadido) charged at 10% of the purchase price for residential properties and 21% for commercial real estate and plots of land. This is different in the Canary Islands, where IGIC (Impuesto General Indirecto Canario) is charged instead of VAT at 7% of the purchase price.
• Stamp Duty or AJD (Actos Juridicos Documentados) is also charged on new properties at a rate somewhere between 0.5% and 1.5% of the purchase price depending on the region.

Resale Properties

• The principal tax charged on resale properties in Spain is ITP (Impuesto sobre Transmisiones Patrimoniales) and varies according to the property’s cadastral value. ITP is charged at 8% on properties worth up to €400,000, 9% on properties worth between €400,000 and €700,000, and 10% on those worth anything beyond this value.
• Capital Gains Tax (Plusvalia) is a tax paid based on a property’s cadastral value and the appreciation of the land value while owned by the seller. This tax is therefore charged at higher rates the longer a property has been owned. Tax coefficients vary significantly between regions. Plusvalia is typically paid by the seller but can also be paid by the buyer if so agreed by both parties.

Mandatory Fees

• Purchasing property in Spain will also involve a number of additional fees related to the overall transaction and associated services. First among these is the Notary Fee, which covers the cost of preparing and witnessing the signing of the title deed and ranges from 0.1% of the purchase price for properties worth over €400,000 to 0.4% for properties valued under €100,000.
• The Land Registry Fee (Registro de la Propiedad) is the charge incurred to register a property under the buyer’s name with the local land registry. Rates can vary between 0.4% and 1% of the purchase price depending on the region, location and property type. In the case that a property is mortgaged, the bank issuing the mortgage is instead liable for this payment.
• Those purchasing Spanish real estate will also require the services of a Gestoría to ensure all fees and taxes are correctly paid to the relevant bodies and transfer any local council taxes, community charges and utility bills to your name. A Gestoría will typically charge a set fee starting around €100.

Additional Fees

• Though not an explicit requirement, it’s highly recommended to hire a lawyer to aid in the legal transfer of the property. Legal Fees vary from firm to firm, but they typically fall around 1% of the purchase price.
• When selling through an estate agency, sellers are also liable to pay Agency Fees somewhere in the range of 2% to 10%. The fees charged to the buyer are typically included in the final transaction value of the property.
• Those looking to take out a mortgage on a property should also expect to pay additional Mortgage Fees. These include an initial property valuation conducted by the issuing authority, charges at a set fee of around €500, plus roughly 1% of the agreed mortgage value.