Purchase in Spain – Financial Overview

The advertised prices are set by the developers. These are always the same with all estate agents and exclude VAT and additional costs.

The total price = published net price + additional costs

“Additional costs” consist of:

1) Up to the signing of the title deed

• VAT or property transfer tax: 10% of the net price.
  For new-build properties this is VAT, and for resale properties this is a property transfer tax.
• Stamp duty on the property, notary fees, registration in the land registry, application and registration of your NIE numbers, and legal fees:
  2.5% to 4% of the net price
• If you use a mortgage for the purchase: 1% to 2%

2) After signing the title deed

A few small but necessary costs are still added:

• transferring the utility contracts into your name
• taking out home insurance
• and optionally drafting a Spanish will.

=> Rule of thumb: Estimate the total package of costs at 15%

When do you pay what?

Purchasing a new-build property under construction

If you decide to purchase a property, it must first be removed from the market.
This is done through a reservation contract and the subsequent payment of a reservation deposit.

At that moment, you receive a reservation contract in which the purchase commitment, the property, the price, specifications, and options are recorded. This document also contains the payment plan.

The standard payment plan with bank guarantees:

1) Signing the reservation contract

You pay a reservation deposit averaging between €6,000 and €10,000 (incl. VAT), depending on the developer. The reservation amount is the only amount immediately paid to the developer upon reservation.

For all other interim payments 2) and 3) below, and the final balance, you first wait for approval from your lawyer. The lawyer checks whether all legal documentation and conditions are fulfilled. Only once the file is complete and correct will your lawyer request the payment of the following instalments:

2) After signing the purchase contract

Approximately 1 month after purchase:
20% of the net price + 10% VAT

3) After 3 to 4 months

An instalment of 20% of the net price + 10% VAT

4) Upon signing the title deed

60% of the net price + 10% VAT, minus the already paid reservation amount.

Some developers apply a slightly different spread of percentages, but you will never pay more than 50% + 10% VAT before the title deed date.

When are the extra 5% costs paid?

Purchase of a new-build property off-plan or under construction

The law firm is the only party that, upon opening your file after payment of the reservation amount, requests an advance payment for their fees. This advance averages around €600. All other costs are paid at completion.

Purchase of a resale property or a key-ready new-build property

In this case, you need to have almost the entire amount available immediately. Here too, the property is first removed from the market via a reservation, but shortly afterwards the purchase contract follows and the title deed is signed within a maximum of 2 months.