Second Home in Spain: Additional Costs

Buying a second home in Spain is a dream for many. The sun, the climate, the beautiful landscapes, and the relaxed lifestyle make Spain an attractive destination for a second house. However, purchasing a second home involves various additional costs beyond the purchase price. It's essential to understand these costs to make an informed decision. In this blog post, we will discuss the main additional costs when buying a second home in Spain.

Transfer Tax (Impuesto de Transmisiones Patrimoniales - ITP)

The transfer tax is one of the most significant additional costs when purchasing a second home in Spain. The rate of this tax varies by region but generally ranges from 6% to 10% of the purchase price. For new-build homes, a VAT (IVA) rate of 10% applies, plus a stamp duty (Actos Jurídicos Documentados - AJD) of 1.5%.

• Used homes: 6% - 10% of the purchase price
• New-build homes: 10% VAT + 1.5% stamp duty

Notary Fees

When purchasing real estate in Spain, it is mandatory to have the deed (escritura) prepared by a notary. Notary fees vary depending on the complexity and value of the transaction but generally range between 0.5% and 1% of the purchase price.

• Notary fees: €600 - €1,200, depending on the value of the property

Registration Fees

After signing the deed, the property must be registered in the Spanish property registry (Registro de la Propiedad). Registration fees usually amount to 1% of the purchase price.

• Registration fees: 1% of the purchase price

Lawyer Fees

Although not mandatory, it is highly recommended to hire a lawyer when purchasing a property in Spain. A lawyer can help you check all legal documents, conduct due diligence, and protect your interests during the purchase process. Lawyer fees generally range between 1% and 1.5% of the purchase price.

• Lawyer fees: €1,500 - €3,000, depending on the value of the property

Mortgage Costs

If you need a mortgage to finance the property, there are additional costs associated with obtaining a mortgage. These costs include appraisal fees, bank administrative fees, and possibly fees for a mortgage advisor. In total, these costs can range from 1% to 2% of the loan amount.

• Mortgage costs: 1% - 2% of the loan amount
• Appraisal fees: €300 - €500

Annual Costs

Besides the one-time purchase costs, there are also annual costs associated with owning a second home in Spain. These costs include:

• Property Tax (Impuesto sobre Bienes Inmuebles - IBI): This tax is levied by the municipality and is based on the cadastral value of the property. The rate varies by municipality.
  • IBI: €200 - €1,000 per year, depending on the location and size of the property
• Municipal costs: This includes costs for waste collection, sewage, and other municipal services.
  • Municipal costs: €100 - €200 per year
• Community fees: If your property is part of an apartment complex or a development, you will need to contribute to the maintenance of common areas and facilities.
  • Community fees: €50 - €200 per month, depending on the amenities
• Insurance: It is advisable to take out building and contents insurance to protect your property and belongings.
  • Insurance: €300 - €600 per year

Maintenance Costs

Maintaining a second home also incurs costs. These include regular cleaning, garden maintenance, pool maintenance, and any necessary repairs and renovations. These costs can vary depending on the size and condition of the property.

• Maintenance costs: €1,000 - €3,000 per year, depending on the property and required work

Conclusion

Buying a second home in Spain offers many advantages, but it is crucial to consider the additional costs. Besides the purchase price, you need to account for transfer tax, notary fees, registration fees, lawyer fees, mortgage costs, and annual costs such as property tax and maintenance costs. By being well-informed and including these costs in your budget, you can enjoy your second home in Spain without any unexpected financial surprises.

Do you have questions or want more information about buying a second home in Spain? Contact a local real estate agent or legal advisor who specializes in Spanish real estate.