Purchase and Sale Expenses
Notary. Notary fees are regulated by the State and are set in relation to the value of the property. The usual cost ranges between 600€ and 1.000€.
Management. In case of buying the property in cash, it would be optional, although it is advisable that all the processes, such as tax liquidation and registration of the title of sale, are entrusted to specialized professionals.
Land Registry. It is the final step of the sale and purchase process and the one that guarantees the greatest legal certainty. Their fees are set by regulation and depend on the price of the property.
The largest expense derived from the purchase will be the related taxes. In the case of new buildings, the tax is VAT, which in the Valencian Community amounts to 10% of the value of the property. A second tax must be added, the stamp duty (IAJD), which in our case is 1.5%, with a reduced rate of 0.1% if the property we buy is going to be our primary residence.
For second transfer properties, the most important tax is the Transfer Tax (ITP), at the general rate of 10%. in the Valencian Community and 8% in the Region of Murcia. However, there are reduced rates of 8% and 4% for VPO, large families, people under 35 years of age and the physically or mentally handicapped (for information on reduced rates in regions other than the Valencian Community, please contact us).
Mortgage expenses
Since the entry into force of the new Mortgage Law in June 2019, it is the banks that assume the costs of IAJD, notary, agency and Land Registry fees derived from the mortgage deed, which were previously paid by the buyer. Thus, the only additional expenses in the case of a purchase with a mortgage loan would be two.
The law requires that the property be appraised by an appraisal company before the mortgage loan is granted. It is this appraisal report that the bank will use to determine the approved mortgage amount. The price of the appraisal varies depending on the appraisal company and the characteristics of the property.
On the part of the bank, you may be charged an origination fee, which usually ranges from 0.5 to 2% of the capital granted. However, there are many entities that do not apply this fee.
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