Information about buying property/real
estate in Spain.
| Introduction Foreigners buying real estate in Spain has become very popular over the past several years. The country has a pleasant climate and recently, the government has made great efforts to increase the number of tourists and residents. Spain now derives more of its foreign income from tourists than any other country in Europe. Due to low interest rates, now is a good time to buy property in Spain. There is a very wide selection from farmhouses and land to villas, townhouses and new apartment developments. There is no shortage of real estate agents in Spain and it pays to look for a good company who will care for your needs. Before you buy a property in Spain, you should research the different areas, then consider visiting your favorites before deciding where to buy. This should be done over several trips to Spain, and not as an impulse decision. Many people often rent a property in their desired area first, before buying, to get a feel for the area, and living in a foreign country. Costs Initial Costs -- In addition to the cost of the property, the buyer will be liable for paying a transfer tax (IVA), which at time of writing is 6% on a second-hand property and 7% on a new property, plus 1/2% stamp duty tax. The property registration office will also charge a fee to change the new deed into your name. This is usually around 300 Euros. There will also be notary charges for copies of the 'escritura publica'. The charge is on a sliding scale depending on the contract price. In total you should budget about 10% of the purchase price of your property for additional costs. Banks may also charge an opening commission for mortgage loans, similar to points charged on U.S. mortgages. Annual Costs -- The local town hall charges an annual real estate tax. The previous owner of the property should provide you with you copies of previous bills. Community charges apply when you buy a property on a community development, like homeowners association fees in developments in the States. These cover things like maintenance, swimming pools, gardens etc. You will also be liable for a wealth tax, payable annually and based on the value of the property and a property owners income tax based on your income from the property. You should clarify these in detail with your real estate agent. |
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