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What are the costs of buying a home?

You may at some point in the near future decide to buy or sell a property. If you find yourself in this situation, it is important to know the costs and taxes that are applicable for both the buying party and the seller. It is also best to know the different procedures for resale homes and new build homes.

The different costs and taxes that are levied on the purchase and sale of homes include:

Notary fees when buying a home.

Title deed costs.


The Property Transfer Tax (ITP).

The certified legal documents. 

Indeed, not all these expenses are applicable. For example, VAT would only be payable if you are purchasing a new home. The ITP is designed for resale homes.

Notary fees when buying a home and title deed registration costs

The above process is necessary in all cases. Once the contracts for buying the property have been agreed and signed by both parties, they can proceed to the next level. The notary will be present at this time, but this does not mean that his work will only consist of attesting to what has happened. 

Up to the time that both parties meet to sign the agreement there is a long process of work that requires great thoroughness due to the complex and delicate procedure.

By law, notaries charge a fixed fee that has been established in 1989. Since then, this amount has not been revised. The tariff is the charge for which the notary's service and preventive legal security are paid.

This means that all notaries in Spain charge the same amount for the service of writing the deeds of a house. This method ensures that everyone has at their disposal these legal services, regardless of the income they earn. In the case of an officially protected property, a reduction of the tariff is envisaged, as is the case with documents concerning public administration.

The fees charged by the notary are a small percentage of the total amount of the bill for the service, and these documented legal acts are between 1000 and 3000 €. The bulk of the amount goes to the payment of registrars, taxes and other expenses when buying a house. The notary will be responsible for paying them on behalf of their contractor.

It is the obligation of the notary to send his client a detailed invoice of all the incurred expenses and fees. In case of doubt in one or several points of the invoice you can always go to the notary office and they will review the invoice with you free of charge.

In a nutshell, the work of the notary saves time and money for the interested party who is selling the property. A summary of the main reasons for appointing a lawyer is:

  • The lawyer acts as a mediator between both parties.

  • They obtain highly relevant information for the contractors, besides guaranteeing their veracity.

  • For each case, the lawyer specifically performs the transfer, modification and writing of the deed.

  • He works as an arbitrator, helping the consensus between the interests of the individuals that demand their services. Thanks to the efficient performance of the lawyer, subsequent legal disputes are avoided.

  • In solidarity with the Notarial Corporation, they are in charge of keeping the property's documents for at least 100 years without any additional cost.

  • The lawyer is responsible for providing the contract in good faith and assures he will prepare it for execution. This translates into peace of mind for the notary's customers.

Madrid - ¿Cuáles son los gastos al comprar una casa?

Property transfer tax and VAT 

Taxes are the other expenses when buying a house, depending on whether there are any other properties owned by the seller.

VAT only applies to new build homes or those that are purchased directly from the developer who has constructed the property. The percentage that must be paid is 10 per cent of the value for which the house was purchased.

In the case of listed buildings and public properties, the amount of VAT is reduced to 4 per cent.

If the purchased property is a resale, the levy varies between 6 per cent and 10 per cent of the sale price indicated in the public deed of sale. The tax rate changes according to the autonomous community and reflected in calculations that also establish minimum prices. You can calculate that the ITP will be between € 12,000 and € 20,000.

The tax office reserves the right to check the real price of the home, if it has reason to believe that the house has a price higher than the amount paid for it, in which case the ITP will be calculated on the amount assessed by the treasury.

The way to make this payment effective is by means of a self-assessment system, by which the buyer himself calculates the amount, enters it in the corresponding box, along with the rest of the information that must be completed before going to a bank in order to pay the necessary amount in the bank account of the treasury. Once this process has been completed, the form signed by the bank along with a copy of the deeds must be submitted to the administration department.

Notary fees

When buying a home the notary fees are composed of a fixed and variable amount.

The fixed part is conditioned by the legal requirement that the notarial documents are certified and stamped.
The variable fee is levied on the deeds of the property, according to the value established in them. The accrual of the amount must occur at the moment in which the paperwork or document is formalised.
Regarding the distribution of all the amounts that must be satisfied in the process of buying and selling a property, they are established as follows:

The amount for the notary's fees is satisfied by the buying party.
Those expenses that are linked to the procedures prior to the confirmation of the deed will be paid by the selling party, according to the rules and regulations.
All fees incurred after the signing process will have to be paid by the buying party, such as the registration of a new title deed.
In this way, you will know all the expenses derived from the process of buying and selling a property and to whom it corresponds to satisfy them. Not only do you have to take into account the amount for which the transaction is made, there are many administrative procedures that must be done to consolidate the transaction correctly from the legal and administrative point of view.

Experts usually recommend those people who are planning to buy a house to save at least 13 per cent of the purchase price of the house, in order to have the ability to meet all the costs that will be incurred.

The agency

As an optional service, the only one in this case, is the hiring of an agency that is responsible for processing the settlement of taxes and other paperwork. If you hire one of these professionals you have to bear in mind that your fees are not restricted by any law, so there is no specific fee. Normally its cost around € 300.

It is very common to hire an agency when a mortgage is needed to cover the remaining payment of the property.

Applying for a mortgage increases the costs 

In addition to all the previous taxes, in the case of mortgages, we must add the following:

The property valuation

It is necessary to hire a valuation company that establishes the value of the property. In this way the bank will also know what percentage of the purchase price it can lend to buyers. Banks usually lend around 80 per cent of the valuation or purchase price, whichever is lower. 

Depending on the company that carries out this work, the valuation and the type of the house, the amount to be paid is usually between 250 and 600 €.

Notary and registration

A mortgage also involves registration and notary fees. Not all these expenses have to be shouldered by the customers. There are several judicial decisions that have come out in favour of the borrowers so that those who face these expenses are the banks or lending companies.


It is the norm to hire an agency or broker to assist with the mortgage application. 
In summary, these are all the expenses derived from the purchase and sale of a house, besides, of course, the price of the property that needs to be paid by the buying party. There are many costs and procedures that must be completed and prepared, so do not hesitate to contact Engel & Völkers today. Our professionals will answer any questions that you may have and advise you on the best way to carry out the purchase or sale of your home.

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