So, you have managed to save / beg / inherit / borrow for the dream holiday home in the sun and you have settled on Spain as your location. What next? Buying in Spain is not quite like buying in the UK. The biggest shock to most people is the tax payable. IVA (Spanish VAT) is paid on new properties for which levels are set by central government and at the time of writing (early 2015) the rate is 10%. If the property is re-sale then Transfer Tax (ITP) is due instead, for which the rates are set by regional government, and these can change with very little warning. We find property in the Alicante and Murcia regions. At the time of writing the tax rates are 10% and 8% respectively. Cheaper properties are not excluded from this tax.
In addition you will need to allow for legal costs – your independent solicitor (do NOT use an in house one!), Notary fees, Land Registry and other sundries such as your NIE’s. These can amount to 3,000 to 4,000 euros.
Spanish mortgages were scarce during the property crisis but are now available again to those meeting strict lending criteria. Taking out a mortgage in Spain is another expenses business, usually costing several thousand euros.
You may have heard of people receiving additional tax bills after buying a house because they got a bargain price. This needs to be discussed with your solicitor at the time of purchase as there is insufficient room to cover the matter here. You are welcome to contact us if you are concerned.
Because of the sheer costs involved in buying and selling in Spain it is very important that you get the choice of property right, buying the wrong property or in the wrong location is a very costly mistake.
That’s where we come in – Spanish Dream Property helps you get it right first time, and that matters!