The Costs of Buying Luxury Property in Spain

Buying a luxury property in Spain involves various costs beyond the purchase price and taxes. Understanding these costs is crucial for prospective buyers. We present a comprehensive overview of the expenses associated with purchasing high-end real estate in Spain, based on a study conducted by the Colegio de Registradores de España, the Association of International Property Professionals (AIPP), and The Royal Institution of Chartered Surveyors (RICS).

Direct Costs

1. Purchase Price
   • Paid to the seller, minus any deposit already paid.
2. Estate Agent Fees
   • Paid by the party who contracted the agent, typically the seller.
3. Notary’s Fees
   • Divided by law: the seller pays for deed authorization, and the buyer pays for deed copies.
   • Fees are set by the Tariff and Regulatory Fee, ranging from 0.5% to 1% of the declared price.
4. Gestor Services
   • If engaged, requires payment based on notary and registrar invoices.
5. Land Registry Fees
   • Paid by the buyer for registering their right, and optionally, the mortgage.
   • Fees determined by a tariff, approximately 1% of the deed value.
6. Legal Fees
   • Range typically from €1,500 to €3,000, depending on the property’s complexity.
7. Mortgage Costs
   • Include valuation fees (around €500) and arrangement fees.
   • Notary’s costs increase due to a separate title deed.
8. Bank Costs
   • Involves writing a banker’s cheque or transferring funds, around 0.5% of the transferred amount.

Other Costs

1. Municipal Tax on Increase in Value of Land
   • Formerly “plusvalía,” a local capital gains tax paid by the seller.
   • Buyer responsible if the seller is a non-resident.
2. Property Ownership Tax (IBI)
   • An annual local tax based on cadastral value, usually lower than market value.
3. Wealth Tax (Patrimonio)
   • Annual tax based on total net assets; rates vary from 0.24% to 3.03%.
4. Income Tax for Non-Residents (IRNR)
   • 20% of rent for house rental; 20% of 1.1% of cadastral value for personal use.
5. Income Tax for Residents (IRPF)
   • Applies if residing in Spain for more than 183 days; annual declaration of global income.
6. Estate Equity Income Tax (Ganancias Patrimoniales Inmobiliarias)
   • Calculated on the difference between purchase and selling prices.
7. Rubbish Collection Tax
   • Paid once or twice a year, set by local council.
8. Water Supply and Sewerage Tax
   • Paid quarterly, based on water consumption.

Non-Tax Related Costs

• Community Expenses: For condominiums and urbanizations, set by the General Meeting of Owners.
• Gardening and Cleaning Services: Included in community expenses or paid separately.
• Land Telephone Line and Internet: Monthly payments for various service packages.
• Electricity: Monthly payments with a basic rate and variable usage costs.

Understanding these costs is vital for a transparent and informed luxury property purchase in Spain. For detailed breakdowns, consult with professionals and request comprehensive invoices.