John.S

Hi all,

This is my first post. Please be gentle. We are looking to move to Spain in 2020 and are doing research now. If we see the right property we may buy it sooner than that date, perhaps even straight away if its a bargain. We have been doing some online research with respect to costs and are shocked at the amount of government tax to be paid when buying a property in mainland Spain. For the more experienced or those that have been through the process, please let me know if I have this roughly correct. For my example, I will assume an apartment purchase price of €200,000.

Thanks in advance for your replies.

Apt cost €200,000
Gov tax 10% €20,000
Other fees, solicitor, notary, land registry etc. Between €2000-€3000.
Ballpark total cost to get the keys in your sweaty palm €223,000.

Seems to me the Spanish government are shooting fish in a barrel. I assume the original owner paid a similar €20,000 tax when they bought the property, we would be paying it a second time when the owners name changes on the registration document and when we sell it, the cycle repeats for the new owner and another €20,000 goes to the Spanish government? To be honest that is off-putting as I think it's a very unfair repeating tax. Anyway, I am sure I am not the first person to balk at the house tax.

My last query is what percentage do agents charge to sell properties. I get the impression its another crazy figure and they all charge similar percentages. I will be pleasantly surprised if its a reasonable charge.

I am looking to get these figures so I can do the maths and see whether renting or buying is the best option for us. We intend to stay in Spain for perhaps 7-10 years. We like the idea of moving around so the rental option is very tempting.

Many thanks.

John.

snikpoh

If you buy in Valencia then, yes, the tax is 10% but varies by where you are buying. This is not strange as it's similar to stamp duty in the UK

The other costs may be more than you estimate. I normally quote 15% for all costs.

The reason the Spanish don't buy and sell like they do in the UK are because of these costs (or at least, it's one of the reasons).

Agents are now charging both buyers and sellers - so be ware. Again this figure varies by area. So, where are you thinking of buying?

spainrico

Yes it is a very different picture to that of the UK

Take a look here:-
https://www.pellicerheredia.com/en/r...property-spain

https://www.gov.uk/guidance/how-to-b...perty-in-spain

John.S

Thanks for your response Snikpoh. I agree most countries have some form of property trax but few as draconian as Spain. (UK is 2% up to £250K and Ireland is 1% up to 1 million euro which is amazing.)

We were looking in Malaga, Murcia and a few other places in the south. We thought we have found fantastic value in Camposol until we read the horror stories. Other investigation brought up horrendous bank charges for moving currency to other countries. Its certainly caveat emptor with this stuff.

Cheers.

John.

snikpoh

If you use a good currency transfer company, Like TransferWise, then the charges are very, very low (at the moment).

John.S

Hi Spainrico,

Many thanks for your reply. My wife has her heart set on a house in Spain but I am now leaning more and more towards renting after seeing the tax costs and the difficulty selling later on. We bought an investment property a few months ago in Dublin and the entire costs including the solicitor, government tax and building surveyor was less than €3750. The difference here is that you can be 95% sure (Just like in the UK) that the correct permissions are there, the building is not going to fall down any time soon and you have set fees when it comes time to sell.

Cheers.

John.

John.S

Cheers Snikpoh. A lot to consider before we pull the trigger and pay a deposit.

Regards.

John.

1sexsmith

You need to have a different mind set when it comes to property in Spain compared with the UK. In the UK property can be seen as having a dual purpose: investment and home. In Spanish it weighs more toward a home than maybe investment and this is certainly true since the crisis sent prices dropping. You need quite an upsurge in prices and a fairly extended period of ownership to offset the buying and selling costs. It is no good thinking about whether it is fair or not. That is the reality. Most people would say that if you are looking for a good investment stick with the UK. However if you want a nice reasonable priced place as a home go with Spain.

dougal03

Until recently I lived in north costa blanca where I paid the usual 5% to an agency for doing everything as regards selling my property.This included ensuring the changeover of direct debits for utilities to the new owner also getting them registered on the Communidad of my previous edificio,otherwise I would still have been responsible for that if a transfer had not been done.Just put down a deposit for a new home & ,even as a cash buyer,will be paying 14/15% over the price agreed by the vendor.I think you need to forget what you did in UK.I have in the past bought & sold property in Scotland,again a different system.If you want a new life in another country just accept that things may not always be "English Style" otherwise,even renting,you may be at odds.

Lynn R

If the OP was looking at property in the Málaga area, then transfer tax in Andalucia for resale properties valued below €400k is 8% rather than the 10% he quoted (there are variations between the autonomous regions) so slightly less to pay there.

When I left the UK, I was able to buy a bigger, nicer house with better views in a town with many more amenities for a lower price than I sold my UK house for, even including the transfer tax and other buying costs. I found that the annual amount saved on Council Tax cancelled out the transfer tax paid over the 11 years we lived in the Spanish house, before selling it last year and buying another property here.

Tom885

I bought my Spanish house for exactly 50% of what I sold my UK (London suburbs) house for- and it's a much more desirable property. Even factoring in the 10% tax it's still a lot cheaper than buying in the UK.

Moses2013

If prices were reasonable. Regardless of personal preferences/situation, taking everything into account (unemployment, salaries vs. cost of living, taxes, rental restrictions), it's never been more unreasonable.
I suppose it's just like all those people who bought VW Diesel cars (Seemed reasonably priced at the time).

John.S

Thanks for your reply 1sexsmith. Based on our 5 year plan, I don't think the cost involved in buying make financial sense. Renting seems like a much better prospect. Purchasing a second apartment in Ireland might be the best way forward and use the rent from that to pay for a rental in Spain. That gives us the option of being able to move when we like and to try another country like Portugal or Italy without being tied down to owning a property in Spain and feeling that we have to use it. From additional research we have done (websites vary on the figures) but it looks like estate agents in Spain are charging anywhere between 3-6% commission when it comes time to sell. (This was the lowest we found.) Most websites say the figure is higher. If I gave an agent 6% of my sale price, I would not be able to sleep at night. Lol. Now I just have to convince the wife. Wish me luck........

John.S

Thanks for your reply Dougal03. The more taxes we hear about and very high selling commissions, the more we are put off buying. Spain is a lovely plavce and has a lot going for it but the rental option gives us the option to move around Spain or even move to another European country for a while. We would only be there for perhaps 5-7 years at most and I think buying a second apartment in Ireland would be more lucrative and stable long term. The rents that apartments are getting in Ireland is amazing with a 2 bed apt renting for €1600. This would more than pay a rental in Spain and there are no silly commissions to pay when its time to sell and the building standards are more stringently regulated. Plus the tax on purchase is only 1%.

John.S

Thanks Moses2013. I think our minds are made up at the moment. Its going to be a rental. Crazy taxes and crazy commissions. Makes more sense to buy a second apartment in Ireland and get high rental yields and at least we can move around in Spain whenever we like.