We explain the expenses involved in buying a home without small print
The illusion that we have when we are buying a new house, which will become our home for many years, or our favorite corner for our vacations, is always accompanied by the economic concern that this big step will entail.
Normally in real estate we see ads that offer houses at certain prices, but does this price correspond to the money that the buyer is going to have to pay?
The answer is no, since there are several additional costs that are not usually indicated, because it is assumed that the buyer knows all these costs (error).
En Dream Sun Spain We are aware that not everyone needs to be aware of the additional costs involved in purchasing a property, which is why:
We explain below all the costs involved in buying a home:
- Purchase price: This is the price that appears in the advertisement for the sale of a house, without including any type of tax or commission. This is the amount that will appear in the reservation contract and in the deed of purchase before a notary, and that we will have to pay to the seller.
- Real estate brokerage commissions: It is the commission charged by the real estate agency for its sales work and advice on the purchase and sale of the house. Depending on the way the agency works and the area where the house is, this commission is paid by the seller or the buyer (or in half). Therefore, this commission must always be made clear by who is going and if it is going to entail an added cost to the purchase.
- Taxes: The purchase of a home always carries a tax called ITP o Onerous Property Transfer Tax, this is a tax whose percentage is established by each Autonomous Community, being the case of the Valencian Community 10% of the purchase price of the home. It can also happen that the house we buy is newly built and we acquire it directly from the developer or builder, in this case the tax to apply is the IVA, instead of the ITP, and that 10% is also paid, but in this purchase made with VAT there is an additional tax of 1,5% called Documented Legal Acts and that many times it is forgotten to calculate it.
- Notary and Land Registry expenses: These expenses generally go to the name of the buyer, but you can agree what you want in the reservation contract or deposit to share these expenses with the seller. To have an approximate indication of these expenses, on a purchase of a house of 200.000 euros, it would be approximately 1.000 euros for the Notary and about 500 euros for the Registry.
- Legal Advice Costs: It is not too much and it is highly recommended to always have the advice of a tax advisor or lawyer to review and write all the documents and guide us in the purchase process, to avoid problems. The cost depends on the professional that is hired, but it can be about 1% of the value of the purchase.
- Municipal Capital Gain: The payment of the municipal plusvalía by law is the responsibility of the seller, unless the deposit contract indicates something different; but there is an exception in which the buyer will have to pay it and it is when the seller is a foreign person or non-resident in Spain.
– Registration or change of supplies: After the purchase, it is necessary to change or activate (if not available) the supplies of water, electricity, internet, etc. This may incur an additional cost depending on population and existing supply contracts.
And finally, costs that are not strictly related to the purchase, but are costs for disposing of the home, such as Community of Owners expenses, Property Tax, Waste Collection Fee, etc.
A good real estate agency will inform you of all these details so that the purchase process is as rewarding as possible.
En Dream Sun Spain, we are committed to maintaining the enthusiasm of our customers and that is why we always clearly inform you of all these details, so that they make the correct purchase decision adapted to their tastes and needs.
If you have any questions about this article or need advice, contact us without obligation.
