COMMON COSTS

Agency Fees

Estate agency fees or commissions are paid by the seller, unless otherwise agreed. If the buyer uses a search agency then search fees are paid by the buyer.
Despite the ability of the internet to bring together buyers and sellers without the need for an agent most people still use agents to find property in Spain. However you should be aware that agents charge between 2% and 15% of the sale price, depending upon the region and type of property. Unless the buyer has specifically agreed to pay the agent's fee this cost will be built into the sale price.

Legal Fees

You are strongly advised to hire a lawyer to help you during the buying process. Your lawyer drafts and reviews contracts on your behalf and can explain all the legal and administrative issues you face. Your lawyer should also carry out any necessary due diligence (checking ownership claim of the seller, charges on the property, permits, etc.) and arrange all the required documents to complete the process (property registration, tax payments, etc.).
A lawyer - Abogado in Spanish - will charge you according to the service you require. This will vary according to the complexity of the purchase. Many charge around 1% of the purchase price in legal fees.

Mortgage costs

If you choose to buy with a mortgage then this will incur several additional costs. First there will be the property valuation that the mortgage provider will require before granting the mortgage. This is paid for the by the buyer and can cost around 500 Euros. Then there will be the costs of the mortgage itself. This varies according to the provider, and even according to the particular branch. However there is usually some kind of opening fee of around 1% of the value of the mortgage. Finally a mortgage will increase the Notary expenses.

Notary Expenses

Notary expenses are nearly always paid by the buyer and are calculated in relation to the purchase price declared in the deeds of sale. To be on the safe side you should calculate Notary fees as being 1% of the purchase price declared in the deeds of sale. In many cases however Notary fees are more like 0.5% (or less) of the price declared in the deeds.

Property Registry Inscription Fees

Expenses related to inscribing the sale with the land registry are also nearly always paid by the buyer, and are calculated in relation to the purchase price declared in the deeds of sale. To be on the safe side you should calculate 1% of the purchase price declared in the deeds, though once again it depends upon the property and the area, and the fee could be considerably lower.

Other Costs

Bear in mind that it may be prudent to carry out a survey of the property and that this will have a cost.
In Summary, allow for up to 10% of the purchase price in taxes and other costs.

If the buyer takes out a mortgage these costs can be somewhat higher due to an additional public deed for the mortgage and the inevitable bank charges involved. In this case transaction costs might reach between 10% and 12% of the value of the property purchased.

Banking Costs

To pay for the property, you will more than likely need to request a banker's cheque from a bank in Spain. In order to do that, you will need to open an account with a bank that has branches in Spain, and transfer money from the bank in your country. Unless you are careful, the cost of transferring the money can go up to 0,4% of the amount transferred, and the banker's cheque could cost you 0,5% of its amount. To avoid paying such high banking charges, which together can increase the cost of your purchase by 1%, make sure you negotiate low fees for transfers and banker's cheques with a branch manager before you open an account in Spain. Spanish Living recommends Escape Currency plc for all your foreign exchange needs. If you need to move money to Spain or abroad, they charge no commission and can offer rates up to 5% better than the banks, saving you money. Click here for details.

Furniture Costs

Once you own a property you will need to furnish it. The cost of furnishing a property depends entirely upon what you want. However as a very general rule of thumb a 2 bedroom apartment will cost around 20.000 Euros to furnish nicely if you buy everything new.

© Mark Stucklin of Spanish Property Insight – Everything you need to know about Spanish property