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Property taxes and fees

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Posted: Thu Jun 28, 2018 3:25pm
32 replies346 views4 members subscribed
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Tifah

Posts: 21

Location: La Marina

Hi,

Just would like to know the actual taxes and  fees charged from buying a property in Spain.

The agency stated this 10% from the property price for the Tax ( Model 600 )

Secondly another 5 % legal fees for land registry,Town hall fee, water & electricity contracts and Notary

Where do I check the prices for these 5 % legal fees charges? So i roughly know the actual prices.

Kimmy11

Kimmy11

Very helpful member

Thu Jun 28, 2018 4:09pm

Posts: 655

654 helpful posts

Posted: Thu Jun 28, 2018 4:09pm

Hi,

I think the agent is giving you a "ball park" figure to add 15% of your purchase price to estimate the full cost of buying.  In reality, all of the items you mention, except maybe the Land Registry (Cadastre) which may have a set fee, will vary depending on who is doing it on your behalf.  Our Spanish solicitor organised all these things for us and the cost was included in her bill.

Are you planning to use a solicitor recommended by the agent?  Personally, I would use an independent solicitor and ask them for a break down of the costs before engaging them.

Kind regards,

Kim

271935

271935

Helpful member

Thu Jun 28, 2018 6:56pm

Posts: 608

Location: Villamartin

432 helpful posts

Posted: Thu Jun 28, 2018 6:56pm

Don't give the agent any money in terms of a deposit 

Don't use any solicitor recommended by the agent

Budget 13% on top of sale price. 15% is too high.

Tifah

Tifah

Original Poster

Thu Jun 28, 2018 7:26pm

Posts: 21

Location: La Marina

Posted: Thu Jun 28, 2018 7:26pm

Kimmy11 wrote:

Hi,

I think the agent is giving you a "ball park" figure to add 15% of your purchase price to estimate the full cost of buying.  In reality, all of the items you mention, except maybe the Land Registry (Cadastre) which may have a set fee, will vary depending on who is doing it on your behalf.  Our Spanish solicitor organised all these things for us and the cost was included in her bill.

Are you planning to use a solicitor recommended by the agent?  Personally, I would use an independent solicitor and ask them for a break down of the costs before engaging them.

Kind regards,

Kim

Hi

Thank you for your reply.

I was told by the agency the 5% they will do all the things as mentioned earlier.But to my knowledge there is no solicitor use by the agency side and i was told that the owner itself will be representing me at the notary.I am a bit worried and also i dont want to spend too much, as lawyer fees plus that 5% is really a lot.I will need to clarify more on this.If you dont mind how much did the lawyer charge you?How much did you pay for the agency?

Tifah

Tifah

Original Poster

Thu Jun 28, 2018 7:32pm

Posts: 21

Location: La Marina

Posted: Thu Jun 28, 2018 7:32pm

271935 wrote:

Don't give the agent any money in terms of a deposit 

Don't use any solicitor recommended by the agent

Budget 13% on top of sale price. 15% is too high.

Thank you for your reply.

I was told i need to pay that 5% for the agency doing all legal fees and i am still without any lawyer.Not even from the agency side.I have paid 10% deposits to the agency account as most agency requires to do that as soon as you want to book a house.

Kimmy11

Kimmy11

Very helpful member

Thu Jun 28, 2018 10:10pm

Posts: 655

654 helpful posts

Posted: Thu Jun 28, 2018 10:10pm

Tifah wrote:

Hi

Thank you for your reply.

I was told by the agency the 5% they will do all the things as mentioned earlier.But to my knowledge there is no solicitor use by the agency side and i was told that the owner itself will be representing me at the notary.I am a bit worried and also i dont want to spend too much, as lawyer fees plus that 5% is really a lot.I will need to clarify more on this.If you dont mind how much did the lawyer charge you?How much did you pay for the agency?

Hi Tifah,

Bearing in mind that several fees and charges are based on the value of the property you're buying, to put my costs in context, I should tell you first that our property cost Eu 230,000.

-  Our lawyer charged Eu 2,300 (+ 21% VAT).  We used an Alicante solicitor, where they are generally more expensive because their rates are based on 10% of the property purchase price.  Changing the utility contracts into our name and setting up the direct debits from our bank was included in our solicitor's fee.

-  Purchase tax in the Valencia region is 10% (9% in Murcia and 8% in Andalucia).

-  There were additional charges for the Notary and updating the Land Registry (Cadastre), totalling Eu 2,200.

I'm not sure what the "Town hall fee" refers to, unless they mean the "Plusvalia" tax?  This is a municipal tax charged by the town hall on properties when they are sold. It's calculated on the rateable value of the property and the number of years that have passed since the property last changed hands.  Most importantly of all, it's the Vendor, not the Purchaser, who is liable to pay Plusvalia, so I would ask your agent to explain what they're referring to and how much it is - if it's Plusvalia, remind them that it's not your liability.

In addition to our purchase price of Eu 230,000, the additional taxes and fees totalled a little less than £28,000, which is just over 12% of the purchase price, so when 271395 says budget 13% on top of your purchase price, I agree this should be enough.  That equates to 10% tax + 3% extra for fees, so I think you're right to query what your agent is doing for 5% extra - unless you're buying a new build, in which case they may also be obtaining a First Certificate of Habitation and some one-off set up fees?  But I'd still be asking them for a detailed breakdown in writing.

By the way, you say your agent is representing you at the Notary, but who is drawing up the contract of sale?  Is your agent working with a preferred solicitor or gestor?  I would always recommend using an independent solicitor (abogado) to ensure that your interests are being protected and not comprised by a solicitor who is influenced by an agent - or worse still, an agent who is also a solicitor: that really would be a conflict of interest.  Gestors are not required to have any particular qualifications; personally I wouldn't rely on one for a property purchase contract.  When we completed at the Notary, we were accompanied by our solicitor and the vendors were accompanied by their solicitor - their agent brought them to the Notary's office, but was not involved in the meeting with the Notary.

I assume you have a receipt for the 10% deposit you've already paid?  What "most agents require" and what is legally required are two different things, but as you've already paid it over, a good solicitor should check that your money is held in an appropriately protected account, like Escrow.

Local solicitors who I've had good experiences with are:

-  Silvia at SGM (based in Benijofar): http://sgmlegalspain.com/

-  David at VP Advisers (based in La Marina and Dehesa de Campoamor): http://www.vpadvisers.com/

I'm sure other forum members could recommend solicitors in your area of interest.  I think appointing an independent solicitor should be your first priority.

Good luck!

Kind regards,

Kim


Kimmy11

Kimmy11

Very helpful member

Thu Jun 28, 2018 10:15pm

Posts: 655

654 helpful posts

Posted: Thu Jun 28, 2018 10:15pm

Whoops, one thing I didn't cover: we didn't pay anything to the agent, not even a Eu 3,000 "reservation fee".  Our solicitor insisted on seeing the draft contract of sale before she'd let us pay anything.  In order to give comfort to our vendors, we paid a 10% deposit into our solicitor's client account and once she'd confirmed she was content with the contract, we gave her permission to pay the deposit to the vendor.

Hope all this helps, but do let me know if you have any queries.

Kind regards,

Kim

RayD

RayD

Helpful member

Fri Jun 29, 2018 9:40am

Posts: 502

Location: Catral

303 helpful posts

Posted: Fri Jun 29, 2018 9:40am

Tifah wrote:

Hi

Thank you for your reply.

I was told by the agency the 5% they will do all the things as mentioned earlier.But to my knowledge there is no solicitor use by the agency side and i was told that the owner itself will be representing me at the notary.I am a bit worried and also i dont want to spend too much, as lawyer fees plus that 5% is really a lot.I will need to clarify more on this.If you dont mind how much did the lawyer charge you?How much did you pay for the agency?

Here are the charges associated with the purchase of a 122.000 € property last week.

VALUE HOUSE:122.000 €
NOTARY: 700,00 €
PROPERTY REGISTER: 400 €
PROPERTY TRANSFER TAX (10 % VALUE HOUSE 122.000 €): 12.200 €
LAWYER FEES: 1.210 €
UTILITY CHANGES: 250 € (excluded any charges of the utility companies)
TOTAL APROXIMATELY COSTS 14.760 EUROS

Don't use anyone who advertises as a 'solicitor'. Only use an independent Spanish registered abogado (a) as they know all the wrinkles. Most in tourist areas speak at least a bit of English. As you can see, our expenditure was about 12% of the property price and her fee, include, was only 1.200 €

271935

271935

Helpful member

Fri Jun 29, 2018 10:32am

Posts: 608

Location: Villamartin

432 helpful posts

Posted: Fri Jun 29, 2018 10:32am

1700e all in I paid which covered.

Notary

Solicitor Fees

NIE

Utilities 

Land Transfer

Opening Bank Account 

Tifah

Tifah

Original Poster

Fri Jun 29, 2018 11:29am

Posts: 21

Location: La Marina

Posted: Fri Jun 29, 2018 11:29am

Kimmy11 wrote:

Hi Tifah,

Bearing in mind that several fees and charges are based on the value of the property you're buying, to put my costs in context, I should tell you first that our property cost Eu 230,000.

-  Our lawyer charged Eu 2,300 (+ 21% VAT).  We used an Alicante solicitor, where they are generally more expensive because their rates are based on 10% of the property purchase price.  Changing the utility contracts into our name and setting up the direct debits from our bank was included in our solicitor's fee.

-  Purchase tax in the Valencia region is 10% (9% in Murcia and 8% in Andalucia).

-  There were additional charges for the Notary and updating the Land Registry (Cadastre), totalling Eu 2,200.

I'm not sure what the "Town hall fee" refers to, unless they mean the "Plusvalia" tax?  This is a municipal tax charged by the town hall on properties when they are sold. It's calculated on the rateable value of the property and the number of years that have passed since the property last changed hands.  Most importantly of all, it's the Vendor, not the Purchaser, who is liable to pay Plusvalia, so I would ask your agent to explain what they're referring to and how much it is - if it's Plusvalia, remind them that it's not your liability.

In addition to our purchase price of Eu 230,000, the additional taxes and fees totalled a little less than £28,000, which is just over 12% of the purchase price, so when 271395 says budget 13% on top of your purchase price, I agree this should be enough.  That equates to 10% tax + 3% extra for fees, so I think you're right to query what your agent is doing for 5% extra - unless you're buying a new build, in which case they may also be obtaining a First Certificate of Habitation and some one-off set up fees?  But I'd still be asking them for a detailed breakdown in writing.

By the way, you say your agent is representing you at the Notary, but who is drawing up the contract of sale?  Is your agent working with a preferred solicitor or gestor?  I would always recommend using an independent solicitor (abogado) to ensure that your interests are being protected and not comprised by a solicitor who is influenced by an agent - or worse still, an agent who is also a solicitor: that really would be a conflict of interest.  Gestors are not required to have any particular qualifications; personally I wouldn't rely on one for a property purchase contract.  When we completed at the Notary, we were accompanied by our solicitor and the vendors were accompanied by their solicitor - their agent brought them to the Notary's office, but was not involved in the meeting with the Notary.

I assume you have a receipt for the 10% deposit you've already paid?  What "most agents require" and what is legally required are two different things, but as you've already paid it over, a good solicitor should check that your money is held in an appropriately protected account, like Escrow.

Local solicitors who I've had good experiences with are:

-  Silvia at SGM (based in Benijofar): http://sgmlegalspain.com/

-  David at VP Advisers (based in La Marina and Dehesa de Campoamor): http://www.vpadvisers.com/

I'm sure other forum members could recommend solicitors in your area of interest.  I think appointing an independent solicitor should be your first priority.

Good luck!

Kind regards,

Kim


Thank you for your message.I appreciated it a lot.Yes i have got a receipt for the deposit from the agency.

I will contact a lawyer soon to help me.

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