Costs related to a house purchase
There are some costs
related to a property purchase in Spain and the mortgage to finance it. In order
to help buyers to estimate the total budget we have made a list of the most frequent
costs. This list should only be used as a guideline, it is not a complete list,
other costs may arise depending on the circumstances of the purchase.
Professional property surveyor
Prior to signing the mortgage the property has to be examined by a professional
property surveyor. The costs for the survey are approximately 100 euros for each
100,000 worth of property. The minimum cost for a survey is about 300 euros.
Bank and insurance
All Spanish banks put as a condition that you
contract various other products in order to get the mortgage. These products are
usually a current account and building and contents insurance. Most banks also provide
you (directly or by an insurance company) with life assurance policies. The total
cost for the current account is about 50 euros/year and the cost for the building
and contents insurance depend on the value of the property. A good rule iof thumb
is to calculate 100 euros for each 100,000 worth of property. The insurance cost
for a property valued at 400,000 would therefore be about 400 euros. The cost of
a life assurance policy depends on many factors such as age, gender, health and
the sum assured.
Most banks work with what is called “gestorías”,
administrative offices that make sure that all the buyers and sellers taxes are
paid correctly into the tax office. The banks usually demand that these matters
are managed by the gestoría of their choice so that they can make sure that the
property gets registered correctly. This gives the bank the comfort of knowing that
the security for the loan has been registered correctly in the Spanish property
registry. It also gives YOU the security that previous debts and claims on the property
have been cancelled correctly and that the property will be registered correctly
in your name. The size of these fees and
taxes depends on the declared price of the property and whether it is new or used.
It also depends on the agreement between the buyer and seller regarding who pays
what. The normal case is that the buyer pays for the notary fees, the title deed
and the taxes and the seller pays the “plusvalía”. The IVA tax (new properties)
is 7% of the declared value and the ITP (“Impuesto de transmisiones patrimoniales”)
transfer tax is 6-7% of the declared value. The stamp duty of the mortgage is normally
1,6-1,8% of the mortgage. As a rule of thumb the sum of all legal costs is about
10% of the declared price of the property. A specification of these costs will be
made by the gestoría and the corresponding amount will be retained from the mortgage
amount. my Spanish Mortgage will of course provide you with the specification
as soon as we get it from the gestoría.
The banks do
legal surveys on the property but are focused mainly on the utility of the property
as a security for the loan. There are some important aspects not considered by the
bank. These matters can be taken care of by a solicitor who makes a comprehensive
examination, verifying that there are no adverse circumstances which reduce the
value of the property. He can also help you in setting up the private purchase contract.
The solicitor also arranges the signing at the notary office and helps you to get
the N.I.E. numbers (Identification numbers for foreigners) necessary to complete
a property purchase in
Spain. Therefore we advise all our customers to use a solicitor when purchasing a property
. The cost for the solicitor’s services is approximately 1% of the price of the
property. As we collaborate with various local solicitors we would be more than
happy to assist you finding a competent solicitor to help you with all the legal
aspects of the property purchase. If you need a solicitor’s assistance please provide
us with this information in the application form.
MySpanishMortgage will help you find a cheap spanish mortgage FOR FREE
as our fees are being paid directly by the banks.