the new mortgage law of 2019In addition to the price of the property, there are some additional expenses to pay in each autonomous community. But what are the expenses involved when buying a house in Andalusia?
This autonomous community attracts both the foreign and national public. The wide variety of landscapes: from mountains and snow, to sun and white sandy beaches, makes Andalusia one of the most famous areas of Spain to buy a second home or a place of rest and retirement.
Buying a property in Spain is an important outlay for most families, who want to know as precisely as possible how much they will be paying for the new home. In this post we clarify all the expenses related to the purchase of a property in Andalucia.
- The selling price.
The prices advertised in portals, real estate websites and in general in any media, are always exempt from taxes and other expenses, unless otherwise specified. Therefore the selling price should not be confused with the total amount to be paid by the buyer.
The rest of the expenses will be proportional to the sale price, that is to say, the higher the price, the greater the amount to be paid for these taxes and expenses.
- VAT or ITP (Transfer Tax)
Depending on whether you buy a new home or a second-hand property, VAT or ITP would be paid respectively. The VAT on real estate (except for development plots) is 10%. The Transfer Tax or ITP is between 8% and 10%. For more information on how to calculate the ITP you can check our blog, and if you still want to know more about VAT and ITP, click on the link above.
- Tax on Documented Legal Acts (AJD in Andalucia)
This tax will be paid if a mortgage is requested for the purchase of the house. In Andalucia the AJD tax is 1.5% of the mortgage loan applied for, but there are two cases of reduced rates:
– 0.3% for people under 35 years old
– 0.1% for persons with disabilities equal to or greater than 33%.
Important note: This tax has been modified by the new mortgage law of 2019 and must now be paid by banks, so it will not affect the consumer. The expenses derived from the application and formalization of the Mortgage are not contemplated in this entry (opening commission, study, appraisal etc.), and should be contemplated being able to be between 1% or 3% of the amount requested.
- Notary and Land Registry Fees
For any type of transaction of purchase and sale of a property, it is necessary to go to a notary’s office in which the Public Deed of Purchase and Sale will be signed. These services have an established fixed cost, which can range from €600 to €1000. It depends on the number of pages of the document and the complexity of the transaction.
Once the deed has been signed, it must be registered in the Land Registry, which can range between 300€ and 2000€ depending on the price of the property.
- Administrative agency:
It is usual that in purchase of a property for an external agent to be in charge of the bureaucracy relative to the payments of taxes, inscriptions in the registry and payment to the notary.
If you apply for a mortgage loan for the purchase, the bank will offer you its own agency to take care of these formalities. You can also look at one of your choice, or even entrust these formalities to the Notary’s office by depositing a Provision of Funds.
These procedures usually involve a cost of between 200€ and 500€, but may vary as it is a private service and there are not fixed prices.
A PRACTICAL EXAMPLE OF HOW TO CALCULATE EXPENSES WHEN BUYING A HOME IN ANDALUSIA:
If you buy a second hand home in Marbella without mortgage, for a price of €250,000 the costs to be paid will be as follows:
A fairly close approximation is usually to calculate between 8% or 10% of the purchase price as expenses.