01: Purchase taxes and costs to buy a property in Marbella, Spain

By Artur Loginov on

Let's talk about all the purchase costs 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, are 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.

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

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

It's important to clarify that private individuals can sometimes be registered as developers and sell a home under VAT. The key to knowing if the property is subject to VAT is if it's brand new or completely reformed. If nobody lived in it, 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 made of the stocks of the company, the transfer taxes are not applied. When buying stocks of a Spanish company, 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 purchasing the property itself, and therefore the same taxes as when buying a property must be applied. And the tax office has straightforward 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 secondhand properties and are:

Lawyer fees of buying a property in Marbella.

Lawyer fees are 1% (+VAT) for a straightforward deal 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 does an extensive due diligence prior to the purchase and an essential after-sale service.

Notary and registry fees to purchase a property.

This depends on numerous factors and is usually 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, 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 banker's 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 secondhand property is 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.

Some frequently asked questions

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

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

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 authorise the fund transfers for the purchase and opening of bank accounts in Spain can result in a more extended 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 the purchase process. His responsibilities are to make the full legal and urbanistic due diligence before 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 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!

Do I pay tax when buying a property in Spain?

Yes, when buying any property in Spain, you are obliged by law to pay certain taxes and costs to fulfil the purchase. Not paying the taxes can cause severe 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 on 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, no specific restrictions or rules apply; it doesn't matter if you are a non-resident or a resident. It is essential to obtain an NIE number, open a bank account in a Spanish bank, and give special attention to the legal and fiscal due diligence in advance.

Artur Loginov
CEO & Partner Artur Loginov

Artur Loginov is the CEO and proud Partner of Drumelia Real Estate. He has over a decade of knowledge and…