Buying or selling a home is a significant investment that comes with several expenses in Catalonia. Whether you are a buyer or a seller, it is essential to understand the various costs associated with the process. This blog article will outline the expenses of buying or selling a home in Catalonia.
Property Transfer Tax (ITP)
The property transfer tax is a tax that buyers pay when purchasing a resale property in Catalonia. It is calculated as a percentage of the property’s value, with rates of 10% for a property under €1 million. For example, if you purchase a property worth €200,000, you will need to pay an ITP of €20,000. Any purchase of property in Catalonia costing more than €1,000,000 is subject to an 11% increase in the transfer tax.
Value Added Tax (VAT)
If you are purchasing a new property in Catalonia, you will need to pay a value-added tax (VAT). The VAT rate is 10% of the property’s value. Additionally, there is a stamp duty of 1.5% on top of the VAT. For instance, if you buy a new property worth €200,000, you will need to pay €20,000 in VAT and €3,000 in stamp duty, making a total of €23,000.
Notary fees are a cost that buyers need to pay for the services of a notary public. A notary is responsible for verifying the legality of the property transfer and ensuring that the transaction is legally binding. Notary fees are calculated based on the property’s value and are set by the Spanish government. The fees typically range between €600 and €1,000.
Land Registry Fees
Land registry fees are a cost that buyers need to pay for registering the property with the Land Registry. The fees are based on the property’s value and are set by the Spanish government. The fees typically range between €400 and €700.
Legal fees are a cost that buyers need to pay for the services of a lawyer. A lawyer can assist with the legal process of buying a property, including verifying the property’s ownership, ensuring that there are no outstanding debts or liens on the property, and handling the legal paperwork. The fees are typically calculated based on the property’s value – generally 1% plus VAT and can range from €1,000 to €2,000.
Real Estate Agent Fees
Real estate agent fees are a cost that sellers need to pay for the services of a real estate agent. Typically, they are between 3% and 7% of the final sale price, plus VAT (currently 21%). Once the whole purchase price has been obtained, the real estate agent will receive their commission and the deed will be signed. When figuring out how much of your Capital Gain is taxable, you can deduct this expense as well.
Capital Gains Tax
Capital gains are taxed at a rate of 24 percent for non-EU citizens, with a few exceptions. Foreign sellers from the European Union and the European Economic Area selling in Spain must pay a 19 percent tax.
Mortgage Cancellation Fees
If you have an outstanding mortgage on the property, you will need to pay a mortgage cancellation fee to the bank. The fee is typically a percentage of the outstanding mortgage balance and can range from 0.5% to 1%. For example, if you have an outstanding mortgage balance of €100,000, you will need to pay a mortgage cancellation fee of €500 to €1,000.
Notary and Land Registry Fees
Notary and land registry fees are costs that sellers need to pay for canceling the mortgage and transferring the property ownership to the buyer. The fees are similar to the ones paid by buyers and are typically based on the property’s value.
Energy Efficiency Certificate
Sellers are required to provide an energy efficiency certificate to buyers when selling a property in Catalonia. The certificate is an assessment of the property’s energy efficiency, and it must be obtained from a certified energy assessor. The cost of the certificate can range from €100 to €300, depending on the property’s size and complexity.
Buying or selling a home in Catalonia comes with several expenses that buyers and sellers need to consider. The costs can vary depending on the property’s value, location, and other factors. It is essential to work with a reputable real estate agent and seek advice from professionals, such as lawyers and tax professionals, to ensure that you understand your obligations and avoid any unexpected expenses.
summarily, the expenses of buying a home in Catalonia include property transfer tax, value-added tax, notary fees, land registry fees, and legal fees. The expenses of selling a home in Catalonia include real estate agent fees, capital gains tax, mortgage cancellation fees, notary and land registry fees, and energy efficiency certificate fees. By understanding these expenses, buyers, and sellers can prepare for the costs associated with buying or selling a home in Catalonia and make informed decisions.