Tuesday, October 26, 2021

Taxes and expenses when buying a house in Spain.

Buying a house is one of the most important investments in life, whether it's a family or personal project. Therefore, it's important to keep in mind that it requires following a rigorous legal procedure to have the maximum guarantees of success, which must be given the utmost dedication and rely on the help of experts.

At MyRentalia Homes, we provide comprehensive and quality advice during and after the purchase of your new home.

Therefore, if you are not yet familiar with the taxes and expenses that you must assume when buying a house in Spain, specifically in our area of operation, which is the Valencian Community, we explain them to you in this article.

Taxes and expenses when buying a house in Spain

It is essential to know that buying a house requires assuming commitments in taxes and additional expenses in addition to the cost of the property. If the goal is to buy a new construction home, whether in Benidorm, Finestrat, Orihuela Costa, or any other area of the Costa Blanca, it is important to consider the following expenses and taxes:

Value Added Tax (VAT) for new construction homes.

When buying new construction in any area of the Valencian Community, you will have to pay VAT, which is 10% of the value stated in the property deed, and the Documented Legal Acts tax (AJD), which is 1.5% of the purchase value, with some bonuses and reductions depending on the specific case. For example, if the home you are buying will be your primary residence, the AJD will be reduced to 0.60%.

Notary fees

When signing the public deed of purchase, you will have to assume the costs of the notary, whose cost varies according to the scope and complexity of the deed, and whose amount is between €700 and €1,200.

Property Registry expenses

Once the property deed is signed, it must be registered in your name in the Property Registry to legally guarantee your ownership. The cost of this registration can be in the range of €400 to €1,000, depending on the value of the property.

Administrative management fees

It is recommended, for convenience, although not mandatory, to entrust some of the administrative management related to the purchase of the property to an administrative management agency. Among their functions are: changing the ownership of the property in the municipal property tax (IBI), notifying the community of owners that you are the new owner, paying taxes, hiring supplies, etc. The cost of this agency is between €300 and €500.

Taxes and expenses when buying a second-hand home

If the property is second-hand, whether as a primary residence or for vacations, the procedure is very similar to that of buying new construction. In this case, only the taxes to be assumed due to the nature of the property vary.

Such second-hand homes do not assume the payment of VAT, but the Property Transfer Tax (ITP) must be paid. The value of this tax is directly related to the cost of the property and is 10% of the deed value.

Forget about all the management with MyRentalia Homes

Buying a home requires a series of procedures that can be complex for those who are unfamiliar with them. That is why the assistance of one of the best real estate agencies on the Costa Blanca, such as MyRentalia Homes, can make a big difference in the process and its final cost.

Transparency, efficiency, and convenience must be guaranteed so that you can enjoy a unique and special moment, such as the purchase of a property. Whether it is a villa or an apartment, having your own home is a great step in a person's and their family's life project.

Enjoy while we take care of the details!