December 9, 2005 at 4:08 pm #51429
I wonder if anybody can help, I’m thinking about making a long term investment in property in the Costa Del Sol. I’m advised that I should expect to pay around 10% of the property’s value in purchase costs!
This seems very steep in comparison to UK purchase costs.
Can anybody break these costs down into individual items?
December 9, 2005 at 5:12 pm #60224
Sounds like you are not getting sound advice from your agent or lawyer.
Breakdown is as follows.
7% VAT or transfer tax. VAT on new property and as tt for re sale, it’s standard on every property transfer in Spain and is the major difference with the UK.
1% Lawyers fees – pretty much the norm, you could pay anywhere between 0.75-1.5%. Again more than the UK but I have tried in vain getting it for less and it’s virtually impossible.
2-3% – Stamp duty, notary and other legal costs – these very much vary depending on what you are buying. Again no way to avoid and could be less but I always advise a minimum of 10% to be factored in too the purchase price of a property.
But also be aware if you are obtaining a mortgage you will more than likely need to add another 1-2% again! Believe it or not. These are for Bank Opening Commisisons and legal costs pertaining to the mortgage.
Again no way of avoiding.
Please not however this is for a fully purchased house. If you are buying off plan, you would only need to budget for VAT and lawyer costs (normally 50% less) of the Private Purchase Contract amount.
Buying property in Spain is one of the more expensive places to do so in Europe and please be advised your selling costs are likely to be not dissimilar, maybe a bit less if you get a deal with an agent.
Hope this helps.
December 12, 2005 at 10:26 am #60259
I was looking to buy off plan so to a degree that minimises costs. However I’m still a little shocked by the magnitude of the costs. I don’t plan to sell the property but if my circumstances changed and I had to I would be faced with another hefty round of costs + a massive commision to a local property agent.
Thanks For the sterling advice
December 12, 2005 at 4:21 pm #60269
IAJD, stamp duty….1%
Lawyers fees, approx…..1%
Notary fees(inc. registration and handling)……approx 0.5%
Banks admin set up fees…..approx 1.25%
Stamp duty on mortgage deeds….approx 0.9%
Quite often the developer includes clauses in the contract that states the buyer pays for the cancellation of his mortgage and also that the buyer pays the plus valia tax. 😯
December 12, 2005 at 4:56 pm #60272
Anyone wanting to calculate their purchase costs…….
go to marbella-lawyers.com, click on the heading Spanish property then scroll down the right hand side of the page to property purchase calculator.
Plenty of useful information on the site.
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