Unexpected costs are something that we don’t want to wake up to, so here’s a guide of what to expect when purchasing your dream property on the Costa Del Sol.
As a basic rule you will need to allow between 10% and 15% of the purchase price to cover the fees and expenses.
The aim for the total official costs involved in purchasing a constructed residential property should be around 10-13% for resale properties.
The aim for around 12-14% for new properties if VAT is paid on the purchase price.
Transfer tax:
Transfer tax is applicable to any resale property
This is payable by the buyer for the purchase of any real estate villas, apartments, land, commercial premises, provided the sell is not a developer or trading in the business of resale properties.
Perhaps the most relevant cost as it scales from 8% up to a purchase price of €400,000, 9% on purchase prices of between €400,000 and €700,000 and 10% on transactions over €700,000.
Please see example 1.
VAT and Stamp Duty:
VAT at 10% and stamp duty of 1.5% applicable to any villa or apartment, or garage that is annexed to an apartment or villa, where the vendor is a developer, promoter or trader for brand new properties.
VAT is 21% and Stamp duty 1.5% For the first sale or resale of parcels of land, and only for the first sale of brand new commercial premises where the vendor is a developer, promoter or trader or a company.
When purchasing as a registered company rather than an individual things are a little more complex but are summarised by the following, resales of any villa, apartment or commercial premises, where the seller is a company, developer, promoter or trader and the purchaser is a company that will apply or use the property for the development of its activity, they can chose between paying Transfer Tax at the scale of 8-9-10% or VAT which can be deduced with the normal activity of the company, but the buyer must now pay VAT directly to the Revenue Office and not to the vendor. Where the applicable rate is 21% in all properties, commercial premises, plots, with the exception of those dwellings that have an applicable rate of 10% plus 2% of stamp duty or Transfer Tax in cases where VAT is applicable.
Notary and Property Registry Fees:
The cost increases according to the number of pages or complexity of the title deed, and value of the property but is usually around €1,500-€3,000.
Lawyers fees:
Depending on the price of the property lawyers fees are usually around1% of the purchase price.
Example A: Resale apartment in Marbella (Andalucia) with a purchase price of 250,000 Euros
• 8% Transfer Tax:…………………20,000.00
• Lawyers fees (1% + VAT)……….3025,00
• Notary Fees:………………………800,00
• Land Registry Fees………………500,00
• Home Insurance………………… 250,00
• Various (bank charges, etc)…… 151,00
• TOTAL………………………………24,726 Euros ( 10% of the purchase price)
Example B: Brand new apartment in Marbella (Andalucia) with a purchase price of 250,000 Euros
• 10% VAT…………………………….25,000.00
• 1,5% Stamp Duty…………………..3,750.00
• Lawyers fees (1% + VAT)……….3,025.00
• Notary Fees:……………………………800,00
• Land Registry Fees………………….500,00
• Home Insurance………………………250,00
• Various (bank charges, etc)………151,00
• TOTAL……………………………….33,476.00 Euros (13,5% of the purchase price)
Municipal Added Value Tax Plus Valía:
Although this is down to the vendor unless negotiated otherwise its worth mentioning as this can range from a few hundred Euros to much as many thousands of Euros on a property with a lot of land that hasn’t changed hands in many years so if purchasing an older property to refurbish the vendor may try to negotiate this cost in the sale process.
In summary:
• Use a recommended trusted lawyer
• Expect costs on average of 10%-13% on resale property
• Expect costs on average of 12%-14% on brand new property
• If purchasing as a company costs are increased, but possibly offset
Are you looking to buy prime or super prime property in Marbella? These properties are generally not advertised publicly. Let us know what your lifestyle and property requirements are and we will find your perfect property.
