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The real costs for buying in Spain?

The real costs for buying in Spain?

Old Sep 23rd 2020, 6:35 pm
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Default The real costs for buying in Spain?

Hi all

I'm looking at buying a small property in Andalucia. We're down to a shortlist now and we're looking in the region of €50k. Talking to an estate agent, they've said that a nota simple is all we need in order to check that there aren't multiple owners and we're not going to get bitten by nasty hidden bills for back taxes, etc. Basically, that the nota simple means that the property will actually be ours when we've handed over our cash and that it will remain ours without having to pay more.

The agent have also said that they will get our NIE and open a bank account for us with a PoA.

Essentially, cutting out a Spanish lawyer.

I've had a really comprehensive example quote from a Spanish lawyer as well which details costs for a property of €190,000. This is broken down as:

Notary fees and land registry fees - 0.5% €250 on €50k
Legal costs - 1% (min of €1815) inc IVA
Land searches - €200
Transfer of utilities and setting up direct debits - €350
Signing PoA in the UK - €250
Transfer tax - 8% €4000 on €50k
2 x Spanish wills - €600 including notary fees
Survey - around €400 depending on the level of survey

This would give a pretty comprehensive package by the looks of it at a cost of €7865 on top of the purchase price to go from a standing start to owning the property.

I'm not looking at skimping. I tend to err on the cautious side even if it costs me a bit extra. But does this all sound about right? Is there anything in there that anyone would say "You REALLY don't need to bother with 'x'" or anything that you would say "You REALLY need to add on 'y'"?

Thanks in advance for your thoughts!

Andy
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Old Sep 23rd 2020, 7:20 pm
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Default Re: The real costs for buying in Spain?

Cut to the chase: You definitely need a lawyer!!!.
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Old Sep 23rd 2020, 7:36 pm
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Default Re: The real costs for buying in Spain?

General rule of thumb is 12-14% on top of purchase price.

A more definite rule of common sense is always use an independent professional experienced solicitor.
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Old Sep 23rd 2020, 7:38 pm
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Default Re: The real costs for buying in Spain?

As Chipmonk rightly states you do need a lawyer and not one recommended by the agent.

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Old Sep 23rd 2020, 7:41 pm
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Default Re: The real costs for buying in Spain?

Agreed and as others said before, never trust an estate agent. You don't speak the language, you don't know the law. Some might get away with it/are just lucky and no doubt there are some good people (estate agents) out there, but so many people make the same mistakes.
  1. Choosing the same lawyer as the seller of the property. If you both hire the same lawyer, this person will have a greater chance to make a profit on your purchase. Remember to look for a lawyer who represents your own interests and negotiates the best deal for you.
  2. Doing insufficient research about the house. Not only the area where the house is built, but also the licenses for building are of great importance when buying a house in Spain. Especially if you are thinking of buying in a rural area, there are many constraints to the size and location in which a house can be built. If the house was built ilegally, you may end up paying to comply with the current local legislation. We warmly recommend you to get a surveyor to check the current status of the building and get a certificate, as well as the available reports from the city hall or local authority.
  3. Assuming that the final price is the one you see on your contract. Bear in mind that buying a house emplies additional costs, such as paying property tax, registering the house in the Land Registry and covering the notary fees. Furthermore, there is a significant difference between the market value and the cadastral value of a property. The cadastral value (rateable value) is established by the local authority and is used to calculate the amount of tax to be payed on the house. If the rateable value happens to be higher than the market price, the tax burden will be higher. It is essential to calculate this at the moment of the purchase. Otherwise, the tax authority can claim back the difference months after you have signed your contract, including a penalty.
  4. Engaging in endless renovations. Avoid properties that require big refurbishing works, especially if you don’t speak Spanish. Many small construction companies can be unreliable or may give you a false estimate of the works. We thereofre recommend to choose a building which needs little improvement. For any renovation works to be performed, sign an official contract.
  5. Not understanding your contract. Buying property is a big investment that generates a number of responsibilities. It is therefore of vital importance to have all terms checked by a professional lawyer.
  6. Postponing your NIE application. The NIE is your foreigner ID in Spain, which is absolutely necessary for buying a house and start with the legal conveyancing. Since this number isn’t issued automatically, an early application will help you speed up the buying process. Besides, being faster gives you an advantage over other applicants.
  7. Trusting everything the real estate agent says. Real estate agents usually try to encourage a fast and emotional buying process. Therefore, we suggest trying different agents, to compare their different offers and analysing their behaviour. Check if there are big differences in the price of a square meter in the same area. Once you have all your paperwork ready, take your time to look into the details and negotiate the conditions of your contract.
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Old Sep 23rd 2020, 7:54 pm
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Default Re: The real costs for buying in Spain?

600 euros for 2 wills sounds expensive.
Mine was about 55 euros
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Old Sep 23rd 2020, 8:48 pm
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Default Re: The real costs for buying in Spain?

I bought my first property without a lawyer. I just talked with the seller, agreed a price, date etc. The difference was that my mother-in'law and wife both spoke Spanish and knew the laws. We then just arranged all the official stuff with the Notaria. However that was over 20 years ago and many Spanish simply didnt need lawyers. Since then things have changed and most Spanish now use lawyers.
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Old Sep 23rd 2020, 10:08 pm
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Default Re: The real costs for buying in Spain?

Hi Moses2013

Thanks for such a comprehensive reply. From your links, are you associated with that company? I've had a quote (as above) from one law firm so far. I would be more than happy to talk to you if this is something you can help with. If so, and you're happy, I'll drop you a PM with my email address.

Regards
Andy
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Old Sep 23rd 2020, 10:21 pm
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Default Re: The real costs for buying in Spain?

Originally Posted by aj2610
Hi Moses2013

Thanks for such a comprehensive reply. From your links, are you associated with that company? I've had a quote (as above) from one law firm so far. I would be more than happy to talk to you if this is something you can help with. If so, and you're happy, I'll drop you a PM with my email address.

Regards
Andy
Not associated with the company and just some information that is important to any buyer. We bought land a couple years ago from private seller and used a lawyer who spoke German registered in Spain, so won't be helpful to you and have no idea what we paid back then. Sorry about that but you can still shop around and if you just enter in Google: spanish registered uk lawyer property spain plenty of firms come up.
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Old Sep 24th 2020, 1:17 am
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Default Re: The real costs for buying in Spain?

quote - "Transfer of utilities and setting up direct debits - €350"

Please don't pay anyone that, it is so easy to do yourself save the money
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Old Sep 24th 2020, 1:58 am
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Default Re: The real costs for buying in Spain?

Originally Posted by snikpoh
quote - "Transfer of utilities and setting up direct debits - €350"

Please don't pay anyone that, it is so easy to do yourself save the money
Would second this.
Our solicitor set all these up including the IBI in their costs.
When we purchased Jan 2019 I think our costs to the solicitors was only about 800 euros in total before IVA. And we gave them POA as I couldn't get here to sign the paperwork.
But that was on a purchase of 78.000 euros before taxes.

I would also add Never use the same company as the seller or even one the agent recommends.
We didn't and the estate agent is a friend of ours.


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Old Sep 24th 2020, 2:11 am
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Default Re: The real costs for buying in Spain?

Originally Posted by snikpoh
quote - "Transfer of utilities and setting up direct debits - €350"

Please don't pay anyone that, it is so easy to do yourself save the money
True and seems very expensive. Since we bought land, that wasn't in our quote at the time.
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Old Sep 24th 2020, 2:38 am
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Default Re: The real costs for buying in Spain?

Originally Posted by inbarcelona
600 euros for 2 wills sounds expensive.
Mine was about 55 euros
that does seem excessive, unless you have alot of other properties / assets and if its not a simple "leave it to the wife then the son" type jobbie.


Originally Posted by snikpoh
quote - "Transfer of utilities and setting up direct debits - €350"

Please don't pay anyone that, it is so easy to do yourself save the money

While I would agree that this is expensive and its easy to do yourselves, not speaking spanish, taking an interpreter / per hour and copies of all the relevant paperwork.. €350 will seem like a bargin compared to the time you´ll have to put into this.

As well as this - if you really want the elctric bill in your own name, and the house / electrical installation is old... its going to cost another €5000 at least on top of the price to get an electrician in to bring the electrics upto modern code. The electric company will only change the name on the contract if the installation (house) has a "bollatin" of less than 5 years old. If it doesnt have one, it has to get one. To get one it has to be tested. It wont pass, and upgrades have to be made... This is what costs the money.
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Old Sep 24th 2020, 3:16 am
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Default Re: The real costs for buying in Spain?

My solicitor included the transfer into my name/bank account of all utilities when I bought last year as part of his overall service.

You cannot buy without an NIE as you are signing for an asset with a tax liability.

Yes I agree the wills are expensive.

The IVA (new) or transfer tax is now based on the actual purchase price of the property. (Alicante region)
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