CLOSING COSTS

A variety of fees are payable when you buy a property in Spain, which usually add a total of around 20% to the purchase price. Most fees are based on the "declared" value of the property, which was traditionally much lower than the actual price paid. However, under the "Ley de Tasas 1989", it’s no longer possible to declare a very low figure and there are severe penalties for gross under-valuation. Local authorities maintain tables to calculate the current fiscal value (valor catastral) of properties and its price (or the actual price paid) which should be declared. Many fees are mentioned without VAT/IVA that is 21%, so you have to count with it to be be added to all the fees.

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THE FEES AND COSTS PAYABLE WHEN BUYING A PROPERTY IN SPAIN MAY INCLUDE THE FOLLOWING:

• Transfer tax (resale properties only).

• Value added tax (new properties only).

• Stamp Duty (ADJ - Actos Jurídicos Documentales)

• Legal document tax (new properties only).

• Land tax.

• Local property tax.

• Retention fee.

• Notary’s fee and Title Registration.

• Legal fees.

• Deed registration fee.

• Surveyor’s fee (optional).

• Utility fees.

• Running costs.

• Seller's agent fee.

• Buyer's agent fee.

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Most taxes are paid by the buyer, with the exception of land tax (plusvalia) and the selling agent’s fees. However, a contract may state that the buyer is liable for all expenses (todos los gastos), including plusvalia. This is legal, provided the buyer agrees, as the law stipulates simply that expenses will be divided when they aren’t set out in the contract and who pays what fees is often a matter of negotiation. Always ensure that you know exactly what the total fees will be before signing a contract.

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TRANSFER TAX

Resale property buyers must pay transfer tax (Impuesto de Transmisiones Patrimoniales/ITP) of a certain percentage. The percentage varies between 7% and 10% depending on the region where the property is situated. The tax is often higher for more expensive properties. Some regions provide a reduction in ITP for first-time buyers, buyers who become permanent residents, buyers with limited annual income, buyers with certain age, buyers buying in specific areas, buyers with more children or disabled buyers. The transfer tax is payable by the buyer.

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VALUE ADDED TAX (VAT) - IVA
Value added tax (Impuesto sobre el Valor Añadido/IVA. Value added tax on residential properties is10% and on land and commercial properties is 21% and is payable on properties being sold for the first time, e.g. new builds. The Value added tax is payable by the buyer.

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STAMP DUTY (ADJ - Actos Jurídicos Documentales)

Stamp duty is payable for the issue of the legal documents. This is normally around 0.5% of the purchase price, but can be 1.5% in certain regions. The Stamp duty is payable by the buyer.

 

LEGAL DOCUMENT TAX

Legal document tax is a tax on ‘documented legal acts’ (Impuesto sobre Actos Jurídicos Documentados/AJD). The percentage varies between 0.5 % and 1.5 %, depending on the region where the property is situated. The tax is levied on new properties and is payable in addition to VAT. Some regions (e.g. Galicia and Murcia) reduce AJD for first time resident buyers. The Stamp duty is payable by the buyer.

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LAND TAX

Land tax (Impuesto Municipal sobre el Incremento del Valor de los Terrenos, usually called plusvalia) is a municipal tax on the increase in the value of land (excluding any buildings), since the last change of ownership. Traditionally, it’s paid by the vendor, as he’s the one who has made the profit, although in some areas it’s common practice for the buyer to pay it. The amount of tax due depends on the population of the municipality in which the land is located and the number of years the vendor has owned the land, and bears no relation to the value of any buildings on the land. Plusvalia is low on modern properties such as apartments and townhouses in urbanizations, where land values have increased little since the properties were built and little land is involved. It can, however, be high if you buy a large plot or a detached house with a few hectares of prime building land which hasn’t changed hands for decades. As taxes vary so widely, it’s impossible to give a simple guide to the amount you might have to pay. If you’re liable for plus valía, you can find out how much it will be before signing a contract by enquiring at the local municipal tax office (recaudación municipal).

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LOCAL PROPERTY TAX

Properties in Spain are subject to a local property tax, which is paid regardless of whether the owner permanently resides in the country or not. The tax is between 0.5% and 1.2% of the taxable value. All owners of Spanish properties, including those resident abroad, must submit an annual Spanish tax declaration.

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NON RENTAL INCOME TAX

Imputation on rental income is a tax. If you are a non-resident owner of a property located in Spanish territory that you do not rent because you keep it empty or you enjoy using it, you must declare income attribution. The imputation of rents is a performance that the Treasury invents for maintaining an empty property. Consider that any property that is not your habitual residence allows you to obtain an income, a rent for it. If you do not do it, the Treasury does not have to lose the part that corresponds to the return that the property could be generating. That is why you must allocate an income for owning a home even if it is empty. The rent to declare will be 2% of the cadastral value of the property if said value has not been reviewed in the last 10 years or 1.1% if it was reviewed in that period. It is the same regulated income imputation for residents.

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NON RESIDENT INCOME TAX

Non-resident income tax (IRNR). The 1.1% - 3% retention is a tax which is payable when a non-resident sells a property in Spain. The buyer of the property is required to retain 1.1% - 3% of the purchase price and deliver it to the tax office. The non-resident seller is able to make a claim to have the 1.1% - 3% returned to them. This is an administrative process. The Tax authority checks whether there are any outstanding taxes payable by the non-resident seller (such as the annual non-resident tax) before returning any funds. If you are purchasing property from Spanish resident, you don't have to pay this fee.

 

NOTARY FEES AND TITLE REGISTRATION

The Spanish government determines the notary fees, the cost of which depends, among other things, on the property’s value and how many pages the sales contract has. In most cases the cost is between 0.5% and 1% and is usually paid by the buyer. The fees for the notary (notario) who officiates at a sale are fixed by law and are based on a sliding scale depending on the sale price, except for when the deed doesn’t include one (i.e. when the property is a gift), when there are fixed fees for each document. If you’re buying a plot in order to build a house, you must pay fees for two deeds; one for the land and another for the building.

 

LEGAL FEES

Legal fees for the conveyancing involved in a sale are usually between 1% to 1.5% of the purchase price for an average property. The actual fee may depend on the work involved. It may be negotiable on "more expensive" properties. Fees, which should be agreed in writing beforehand, are much lower if a lawyer is engaged to vet the sales contract only. Legal fees are payable only after you’ve received the final "escritura pública" after registration at the property registry office (Registro de la Propiedad), although many lawyers demand a pre-payment (provisión de fondos). Engaging a lawyer and paying legal fees is optional, but it’s highly recommended.

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DEED REGISTRATION FEES
This is usually between €180 Euro and €500 Euro, although the first amount paid is a deposit and is often over-estimated, so you may receive a small refund.

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SURVEYOR'S FEES
Ii is optional. If you employ a surveyor to inspect a building or plot of land, the fee depends on the type of survey, any special requirements and the value of the property or land. A homebuyer’s survey and valuation costs from €500 Euro to €2,000 Euro.

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UTILITY FEES

If you buy a new property you must usually pay for electricity, gas and water connections, and the installation of the meters. A builder or developer should provide the cost of connection to services. In resale properties, you pay for the transfers (new contracts), but sometimes the connections are not installed or they are canceled (specially bank owned properties) and you have to pay for the cost of the new connections.

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RUNNING COSTS

In addition to the fees associated with buying a property, you should also take into account the running costs. These include local property taxes (rates); annual wealth tax, income tax on deemed letting income and a fiscal representative or tax consultant’s fees; rubbish tax; community fees for a community property; garden and pool maintenance (for a private villa); building and contents insurance; standing charges for utilities (electricity, gas, telephone, water); plus a caretaker’s or management fees if you leave a home empty or let it. Annual running costs usually average around 2 to 4 per cent of the cost of a property.

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COMMISSION STRUCTURE

In Spain there is a big difference in commission structure in comparison with another countries. In many countries is the seller only who is paying the whole commission. In Spain the commission is paid by both, the seller and the buyer. The commission amount for each is between 3% and 5%. Total commission amount is between 6% and 10%, but in some cases specially on rural properties it can be as high as 35%!! Our commission is always 3% only. You will not pay any other buyer's commission. Example: if the real estate agency is asking 10% (5% from the seller and 5% from the buyer), we will negotiate the commission with the real estate agency and you will pay only 3% as a buyer.

OUR DECISION AND SOLUTION

We decided to help all the future buyers we can and to create this Property Finder website to achieve this goal. We are already helping some buyers. Our many years of real estate experience from US, dual citizenship and the language knowledge are the key. 

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We will make an initial free consultation with you. We will let you now which documents you need. We will send you properties that fits your needs and the websites where you can find properties with the criteria you are looking for. We will help you to make a selection of the right properties that fit your criteria and we will check the properties in person. We will make you a video or Life Video Tour not just of the interior and exterior of the property, but of the surroundings as well. We will check all the documents and supervise the whole purchase process. We can accompany you at the closing.

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INTERNATIONAL PROPERTY FINDER

Who is an International Property Finder? What is exactly his role? An International Property finder is a real estate professional or a group of professionals, specialized in International market, who will help you to find an ideal property in another country.

 

Property Finder is:

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• the buyer's eyes

• working for the buyer, not the vendor

• minimizing the stress for the buyer

• saving the time and money of the buyer

• helping to find properties that are difficult to find

• helping the buyer avoid a common pitfalls

• supervising the purchasing process

• helping to narrow the search

• helping with the selection of the properties and the final decision

• facilitating the video tour of the selected properties

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THE PROCESS

The process of the purchase in Spain is not the fastest one and can take several months. Below you can find a list of some of the steps.

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 The Initial Conversation

This is when you will tell us what kind of property you are looking for, what is your budget and where in Spain you would like to purchase your property.

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Signature of the Agreement to find the property

We will email you an agreement form to signed it electronically.

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Commission Initial Deposit

You will make the initial deposit of the amount of 1,500 Euro + 21% VAT (IVA), or the equivalent exchange rate in US dollars, to our account, that will be discounted from our final commission amount when the purchase is completed.

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Documents

We will send you a list of documents to notarize, apostille or translate, that you will need for the purchase.

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Property search

We will start our search and will be sending you different properties till you find the your favorites.  

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Selection

You will select your favorites properties.

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Showings/Viewings

We will go to see the selected properties in person to make a video or Life Video Walk Through.

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Presenting an offer

When you choose the final property, you need to sign an offer and send it to the seller.

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The Initial Deposit

At the same time you submit the offer you have to make a wire transfer with the initial deposit of the property (usually 10%).

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Proof of transfer

A Proof of bank transfer of the initial deposit must accompany the offer.

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Negotiation

If the seller does not accept your offer or make a counter offer, we negotiate the price until we reach an agreement.

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Acceptance of the offer

At the moment the seller accepts the offer, he has to sign it and send a copy to the buyer.

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Removal of the property off the market

The seller or the seller's agent will remove the property off the market.

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Attorney review

If you don't have any real estate attorney, we can recommend you some attorneys and he/she can start the reviewing process of the property.

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Final payment

As soon as the notary has all the documents of the two parties, the date of the signature (the closing) will be established and you as a buyer have to make the final wire transfer.

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Proof of the wire transfer

A Proof of the bank wire transfer for the final payment must be sent to the Notary's office.

Closing - The buyer and the seller go in person to sign the purchase/sale documents before the Notary where you will receive the keys.​

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COMMISSION STRUCTURE

In Spain there is a big difference in commission structure in comparison with other countries. In many countries is the seller only, who is paying the whole commission. In Spain the commission is paid by both, the seller and the buyer. The commission amount for each is between 3% and 5%. Total commission amount is between 6% and 10%, but in some cases specially on rural properties it can be as high as 35%!!! Our commission is always 3% only. You will not pay any other buyer's commission. Example: if the real estate agency is asking 10% (5% from the seller and 5% from the buyer), we will negotiate the commission with the real estate agency and you will pay only 3% as a buyer.

 

BUYER'S COMMISSION

If you are buying a property in Spain with us, our commission fee is €3,000 Euro + 21% VAT (IVA), for the property with a value up to €100,000 Euro. If you are interested to purchase a property with a value over €100,000 Euro with us, then you will be paying us a 3% commission fee + 21% VAT (IVA) of the commission.

 

SELLER'S COMMISSION

If you are selling a property in Spain with us, our commission fee is €3,000 Euro + 21% VAT (IVA), for the property with a value up to €100,000 Euro. If you are interested on us selling your property with a value over €100,000 Euro, you will be paying a 3% commission fee + 21% VAT (IVA) of the commission.

 

RENTAL COMMISSION

We are doing rentals as well, depending of the area. If you are interested to find a rental or you already found one and you would like us to make a Life Video Tour, or you are interested on us to take care of the paperwork or supervise the process, we are charging a commission fee of 1 month rental amount. We will start working after you sign an agreement form and send us a deposit amount of €900 Euro + 21% VAT (IVA).

 

WHAT IS INCLUDED IN OUR COMMISSION

Free initial phone or video conference consultation
Search of the property

Finding the right property

Helping you to select the properties
Visit of the selected the properties in person (up to 5 properties)
Life Video tour or video recording of the selected properties (up to 5 properties)
Your document revisions

Purchasing process supervision
Closing assistance in person

Free key holding service during first 6 months

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EXTRA VISITS 

You have included the visits in person up to 5 properties. If you need us to visit more properties, we are charging €120 Euro + 21% VAT (IVA) per any additional property visit.

 

EXTRA LIFE VIDEO TOURS  OR VIDEO RECORDINGS

You have included Life Video Tours or Video recordings in person up to 5 properties. If you need us to make additional Life Video Tour or Video recordings, we are charging €80 Euro + 21% VAT (IVA) per any additional property.

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NIE

Additionally, you must obtain a NIE (Foreigner Identification Number). We can take care of it and obtain your NIE for a €120 Euro fee + 21% VAT (IVA).

 

KEY HOLDING, SUPERVISION, EMERGENCY

If you decide to keep the property only for your personal use (you, your family or friends), we can hold the keys of your property during your absence for cases of emergency, and checking periodically your property making sure everything is ok for a €99 Euro fee + 21% VAT (IVA) per month. The contract agreement in this case is annual.

 

FULL PROPERTY MANAGEMENT AND SHORT TERM RENTALS

If you decide to rent your property short term, we can take care of the rental process for a 30% fee of the monthly rental amount including the cleaning. The contract agreement in this case is annual.

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CLEANING

If you need a cleaning service, we are charging a fee of €90 Euro + 21% VAT (IVA) for each cleaning or you can sign with us an annual contract agreement (minimum 12 cleaning per year) for €70 Euro + 21% VAT (IVA) per cleaning.

 

RENOVATION (DAILY SUPERVISION)

If you decided to purchase a property to restore or you need to make some addition, reparations, changes, purchase a furniture, etc, we can take care of the supervision process for a 10% and 15% fee of the whole renovation budget amount.
 

POWER OF ATTORNEY

If you are interested in giving us a Power of Attorney to handle the purchase process and related in your absence, we are charging a €400 Euro fee + 21% VAT (IVA).

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ASSISTANCE WITH NEW UTILITY CONNECTIONS

If your property has no utility connections and you are interested to connect them, we are charging a €500 Euro fee + 21% VAT (IVA). If you need just some of them (water, gas, electricity, Internet, Cable), the fee is €150 Euro + 21% VAT (IVA) per each.

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ASSISTANCE WITH UTILITY TRANSFERS

If your property has utility connections and you are interested to transfer them to your name, we are charging a €300 Euro fee + 21% VAT (IVA). f you need just some of them (water, gas, electricity, Internet, Cable), the fee is €90 Euro + 21% VAT (IVA) per each.

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INTERPRET AND TRANSLATE SERVICES IN PERSON

If you are interested to translate or interpret any meeting in person we are charging a €90 + 21% VAT (IVA) per hour. 

 

INTERPRET AND TRANSLATE SERVICES ONLINE

If you are interested to translate or interpret any meeting online, we are charging a €70 + 21% VAT (IVA) per hour.

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KEY HOLDING

If the owner is a foreigner or a person, who is not living in Spain permanently, there is an obligation, that someone (normally a property manager), who is living in the country, has the key and access to the property at all times.The cost of this service can be between 300 - 450 Euros, depending on what is included. We are offering tenure for 6 months free for all our clients and then we charge 29 Euros per month, paid annually.

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OTHER SERVICES

If you are interested services not mentioned, feel free to contact us for the availability and our fees.

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OUR GOAL AND MISSION

Our mission is to enrich lives by allowing more foreigners to enjoy property ownership in Spain.

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OUR ADVICE

If you are buying online be sure to have somebody, who will become your eyes and ears.

If you are buying in person, find somebody with a personal experience, who can supervise the whole sale process.