The high transaction costs of buying property in Spain

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This topic contains 6 replies, has 5 voices, and was last updated by Profile photo of The Australian The Australian 3 years, 3 months ago.

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  • #57724
    Profile photo of Anonymous
    Anonymous
    Participant

    VAT on new homes went up to 10pc at the start of this year (and VAT on refurbishments went up from 8pc to 10pc at the start of the year, if I’m not mistaken).

    Transfer tax on resales is 10pc in most popular areas, as you can see from this table (first column, and Catalonia and the Valencian Region have just increased the ITP resale transfer tax (impuesto de transmisiones patrimoniales) from 8pc to 10pc this month).

    So basically, if you buy a property for €200,000 in Spain today, you’ll pay around 15pc in transactions costs (taxes, notary, stamp duty, registry office, legal fees, mortgage costs), which is €30,000.

    You might also get hit by a “bargain hunter” extra charge for ITP if the taxman thinks you’ve paid too little.

    It is truly insane to have such high transactions costs on property in the middle of a massive property crash. The government should be slashing costs to stimulate the market, not raising costs as it is doing.

    Check out the comments at the bottom of this article: Resale transfer tax goes up to 10pc in Catalonia & Valencian Region. Spain is going to lose a lot of sales and income because of these escalating costs, and the black economy will get bigger.

    The Government is the thing that worries me the most about this country 😥

  • #117856
    Profile photo of Fuengi (Andrew)
    Fuengi (Andrew)
    Participant

    Hi Mark,

    could you break down how you reach the 30.000€ figure?
    I assume that figure is based on your experience in Barcelona?

    thanks

  • #117857
    Profile photo of Anonymous
    Anonymous
    Participant

    Yes, based on a purchase in Barcelona and assuming a mortgage.

    It’s 15pc of €200,000

    10pc ITP
    5pc notary, registry, AJD, legal, mortgage costs plus other costs like bank cheque

    It’s a rough figure – it might be less, but not much less.

  • #117865
    Profile photo of Anonymous
    Anonymous
    Participant

    @Mark. The Spaniards don’t think it is insane !!!!!!!!!!!!!.

  • #117878
    Profile photo of Anonymous
    Anonymous
    Participant

    Does anyone know what the tax on buying a resale in Florida is, roughly? For all I know, there might not even be a tax on buying a home there. There is no justification for taxing people for buying a home.

  • #117903
    Profile photo of katy
    katy
    Spectator

    1.5% when we bought.

  • #117944
    Profile photo of The Australian
    The Australian
    Participant

    Let them beg for money then.

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