When purchasing or selling a home, the process includes not only the property's value but also additional expenses like notary fees, property registration, taxes, and other administrative costs.

A common question is: In Spain, which transaction costs are the buyer’s responsibility, and which are covered by the seller? In this blog, we will explain who is responsible for which payments in a standard property sale in Spain.

Home Buyer Expenses

When purchasing a property, buyers must cover several transaction costs in addition to the property's price.

Notary Fees

Before finalizing the purchase, the buyer must register the property in their name before a notary. This is the final step, completed after all other formalities. The necessary documents are submitted to the notary’s office before signing the deed.

Notary fees generally range from 0.2% to 0.5% of the property's value, depending on the complexity of the transaction. These fees are regulated by Royal Decree 1426/1989 (last updated on 17/11/2011) and must be paid upon completion of the sale.

Property Registration

Once the deed is signed, the buyer must register the property in their name at the corresponding Land Registry.

This process involves a registration fee, typically between 0.1% and 0.25% of the property’s value.

For example, if the property costs €100,000, the registration fee would be approximately €250.

Taxes Paid by Home Buyers

The taxes a buyer must pay depend on whether the property is new or second-hand:

• New Builds: The buyer must pay VAT (IVA) and Stamp Duty (IAJD).

  • VAT is typically 10% of the purchase price recorded in the deed.

  • Stamp Duty (IAJD) ranges from 0.5% to 1.5%, depending on the autonomous community, and is based on the notarized public deed.

• Second-Hand Properties: Instead of VAT, buyers must pay the Property Transfer Tax (ITP), which is usually between 6% and 10% of the purchase price, depending on the region.

Real Estate Fees

To handle the transaction smoothly, many buyers choose to hire a real estate agency.

An agency not only helps find the right property but also can help manage paperwork, ensuring a hassle-free process. The cost of these services is usually shared between the buyer and seller, though the exact arrangement depends on the agency's policy.

 

What Does the Seller of a Second-Hand Home Pay?

Now, let’s break down the expenses that a property seller is responsible for:

Notary Fees

Just like the buyer, the seller must also cover certain notary fees. These fees relate to the granting of deeds—essentially the cost of the notary’s signature on the document certifying the property transfer.

As regulated by Article 1455 of the Civil Code, these fees typically range from €400 to €800.

In addition to the deed, the seller must provide several documents to the notary, which also incur additional costs:

• Energy Efficiency Certificate – approximately €200

• Certificate confirming all payments are up to date

• Certificate of Habitability – around €100

Mortgage Cancellation Fees

If the property is still under a mortgage, the seller must officially cancel it before selling. The process includes:

1. Requesting a zero-debt certificate from the bank, confirming that the mortgage has been fully paid off. This document is free of charge.

2. Signing the mortgage cancellation deed before a notary, which costs around €200. On occasion this can be done the same day as the sale. 

3. Registering the mortgage cancellation at the Property Registry, with fees typically starting at €100, depending on the mortgage amount.

Taxes the Seller Must Pay

The seller is responsible for paying the following taxes:

• Municipal Capital Gains Tax (Plusvalía Municipal)

  • This tax is based on the increase in the land’s value and is calculated using the cadastral value, the number of years the property has been owned, and local tax regulations.

  • The tax rate generally ranges between 20% and 30% of the land’s appreciation.

• Personal Income Tax (IRPF)

  • The seller must declare the capital gain from the sale in their next Income Tax Return.

• Real Estate Tax (IBI)

  • The seller is responsible for paying the IBI (Property Tax) for the year in which they were still the legal owner. After the sale, this tax obligation transfers to the buyer.

Real Estate Fees

Hiring a real estate agency or tax professional can make the selling process smoother by providing expert guidance and handling paperwork.

Real estate fees typically range from 2% to 7% of the property’s sale price.