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Taxes and Expenses

incurred in when purchasing a property in Spain

There are several expenses and taxes which must be paid when purchasing a property other than the price agreed upon with the vendor:

When purchasing a newly built property, the buyer must pay Value Added Tax (VAT), which amounts to 10% of the purchase price as well as Stamp Duties (1,5%).

When purchasing a property as a second transmission in Andalucía, 8%, 9% or 10% Transfer Tax is paid, depending on the purchase price.

  • Payment of these taxes may be avoided if instead of purchasing the property as a natural person, the property is purchased through purchasing shares of a company which owns the property. The transmission of shares is not subject to VAT or Transfer Tax provided that the requirements laid down in article 108, 2 of the Stock Market Act are met.

The following expenses must be taken into account in both cases:

  • Notary Public fees (depending on the purchase price)
  • Land Registry fees (depending on the purchase price)

If financing is necessary for the purchase (mortgage loan), the following additional expenses shall be noted:

  • Insurance: 250-500 € (approx.)
  • Commissions for having a mortgage loan (depending on the financial institution, between 1% and 2%).