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Besides the obvious cost of the property, buying a house in Spain involves various administrative and legal costs. They break down as follows: If buying from a non-resident or a company, 5% of the purchase amount is held back to be paid to the Spanish tax authorities to cover any capital gain liability that may exist. This is not an extra 5% but a part of the total - rather like withholding tax. The seller must pay his capital gains tax, selling agents fees and any outstanding community costs and rates. There is also a local tax called 'plus valia', a relatively small sum which is based on an assessment of the value of your property (usually 10-40% of the property's annual increase in value). According to Spanish law, plus valia is paid by the vendor, unless otherwise agreed by both parties. When budgeting, you should also allow sufficient funds to cover your reservation sum - the minimum is usually 6,000 euros, more for higher priced properties. This can be paid in cash or by credit card. Paying this sum secures you the property and prevents other interested parties from intervening. You should also consider how much you need to allow for refurbishment or more substantial renovation work, or whether the property needs to be in as near perfect condition as possible. |
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