Real estate closing costs, fees and real estate taxes.
As may have you expected, the Spanish government wants a small part of the action when you buy real estate in Spain. Even when you buy a home or an apartment in Spain you may get hit with a hefty donation tax. This is how it works. It is not uncommon that the seller proposes a cash deal, most of the time with a lower purchase price. The advantages are obvious, lower conveyance costs, fees and taxes, and less capital gains ( as income tax) for the seller and buyer. The problem here is that the sales price is substantially lower than in the registry ( 20% if in excess of pta 2,000,000) the tax man considers the excess to be a gift and will tax both seller and buyer. As a non resident, the gift tax rate can exceed up to 80% of the "gift".
Costs of purchasing real estate
It is a fair estimate to expect a total of 10% expenses when buying real estate in Spain. The most substantial expenses are:
- Legal costs
- Land Registry fees
- Plusvalia
- Notary fees
- Transfer tax
- Stamp duty ( read more)
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