Purchase Taxes and Costs to Buy a Property in Marbella, Spain

Purchase Taxes and Costs to Buy a Property in Marbella, Spain

Today we will talk to you about all the purchase costs that a buyer needs to pay when buying an apartment, townhouse, or villa in Marbella.

Any property prices that you see no matter where, in a brochure, on the internet or anywhere else, it’s all net prices to the vendor. The purchase taxes and costs must be calculated on top of the agreed price with the vendor.

The main difference lies in buying a brand-new property from a developer or a secondhand property.

Properties bought from developers are subject to VAT (10%) and stamp duty (1.2%) on top of the purchase price. The VAT must be paid on the day of the notary.

Second-hand properties are subject only to transfer tax, (7%) until the end of 2021. Then it might increase or might not. The transfer tax can be paid up to 30 days after the notary.

So, for the moment, we can already see a big difference in taxes if buying from a developer or from a private individual who lived in a house. In a purchase of €2M, the difference is exactly 100.000€!

It’s important to also clarify, that sometimes private individuals can be also registered as a developer and selling a home under VAT. The key to know if the property is subject to VAT, is if it’s brand new or completely reformed. If nobody lived in it, and if the owner is registered as a developer.

Lastly, we would like to add a further explanation about purchasing a Spanish company that owns a single asset, the property. It is a common mistake to think that if the purchase is done of the stocks of the company, the transfer taxes are not applied. Actually, when buying stocks of a Spanish company other taxes are applied, or sometimes even none, but always when it’s an active company doing business. The law says that if you are buying a company that only owns one asset, a property, and has no real business activity or employees, such transaction is compared to buying the property itself, and therefore the same taxes as when buying a property must be applied. And the tax office has very simple ways of identifying when such companies change hands.

What are the other costs of buying a property in Marbella, Spain?

The rest of the costs are the same both for the new or second-hand properties and are:

Lawyer fees of buying a property in Marbella.

For a straightforward deal, lawyer fees are 1% (+VAT) from the purchase price. If the purchase is for a high price or you are a regular client, some Law Firms can slightly adjust the fees. Sometimes clients prefer not to use lawyers, to reduce the cost of acquiring a property in Marbella, as it is not obligatory to use a lawyer. We strongly recommend using a lawyer always. A good lawyer not only does the transaction but makes an extensive due diligence prior to the purchase and a very important after-sale service.

Notary and registry fees to purchase a property.

This depends on a numerous number of factors and normally are always calculated approximately, providing only a final bill, after the sale. We would estimate 0.25% for both, from the asking price, to be on the safe side. If the price is above €2M then the percentage would be lower, closer to 0.15% or even 0.1%.

Bank account fees when buying a property.

For transferring the funds to the vendor or issuing bankers drafts. Almost all purchases in the notary happen with bankers drafts, not transfers, and for issuing these checks, or making an important transfer, the banks charge a commission. This can vary a lot, depending on the amount of payment, which bank you are using and your profile as a client. Maybe something to investigate when opening a bank account in Marbella.

Mortgage fees to buy a house in Marbella.

If you decide to buy a property in Marbella, using bank financing, you might be surprised to find out, that your only cost will be the property valuation. This varies from 500€ to +2.000€ depending on the size and price valuation. The rest of the costs and taxes are paid by the bank.

Technical due diligence to purchase a property.

Not obligatory at all, but good to keep in mind when acquiring a second-hand property. To check the current state of installations like air conditioning, heating system, and other details in the property. The cost may be from 300€ to +2.000€ depending on the size of the property and the amount of work to be done.

QUESTIONS AND ANSWERS:

What fees do you pay when buying a property in Spain?

Apart from all the taxes and costs described in this blog, there are no more fees to be paid by the buyer in relation to a purchase of real estate in Marbella, Spain. The real estate fees are paid by the vendor, together with some other taxes and costs that the vendor must pay, when selling his property. It is also important to note, that depending in which location of Spain you have decided to purchase the property, the taxes, costs, and fees can vary.

What are the pitfalls of buying a property in Spain?

  • Not correctly calculating the costs and taxes of buying a property, therefore we hope that this blog will serve you well.
  • Not doing the necessary paperwork in advance, to authorize the fund transfers for the purchase and opening of bank accounts in Spain, which can result in a longer period than might be expected. Therefore, potentially missing out on the property opportunity found due to not being able to act quickly for the payment.
  • Not using a professional lawyer. In Spain the figure of the lawyer in a transaction is crucial in a purchase process. His responsibilities are to make the full legal and urbanistic due diligence prior to the payments. Preparation of all contracts for the purchase and a very extensive after sale including control of the taxes to be paid on a yearly basis as a new owner
  • Not investigating in advance all the taxes that you must pay as the future owner of the property.
  • And of course, not using the right real estate agent for your purchase! At Drumelia Real Estate we provide a highly dedicated service to our clients with 20+years of experience. It’s never been easier to get in touch! Just click here!

Do I pay tax when buying a property in Spain?

Yes, always when buying any type of property in Spain, you are obliged by law to pay certain taxes and costs to fulfil the purchase. Not paying the taxes can cause serious problems and sanctions by the tax office so please read this blog carefully to obtain all the necessary information about taxes to pay when buying a property in Marbella. Depending where in Spain you want to make the purchase, the taxes can vary.

What are the rules for buying property in Spain?

When buying a property in Spain there are no specific restrictions or rules that apply, doesn’t matter if you are a non-resident or a resident. It is important though to have obtained an NIE number, opened a bank account in a Spanish bank and give special attention to the legal and fiscal due diligence in advance.


Artur Loginov, CEO & Partner

19/03/2021

Artur Loginov

CEO & Partner

Top 6 Best Modern Villas in Marbella

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Bruna Karla Krüger
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