Expenses and taxes in the purchase and sale of real estate in the Canary Islands

Under Spanish law, the responsibility for paying taxes on the purchase of a property rests with the buyer.

VAT (IGIC) – 7% of the price of a new property.
– Transfer tax (Impuesto de Transmisiones Patrimoniales (ITP) – 6.5% of the value of a second-hand property.
– Stamp duty (AJD) – 1.0% of the value of the property.
– Notary fees (Notary) – 0.5-0.75% of the value of the property.
– Land registry fees (Registro de la Propiedad) 0.25% – the amount is determined on a special scale and depends on the value of the property (example: the price of real estate from 50,000 to 100,000 euros – tax 250-300 euros).
– Gestoría – 300 euros.
– Deed management – 0.02% of the value of the property (registration of the contract).

2. Mortgage processing costs when buying a home

• Notary – 0.5-0.75% of the mortgage amount.
  – Tax on the execution of documented legal acts AJD – 1.0% of the value of the property.
  – Cost of property valuation – 300-500 euros.
  – Bank commission for opening the mortgage – 1 – 1.5% of the amount of the loan.
  – Title deed processing – 0.02% of the value of the property (registration of the contract).
  – Compulsory home insurance – 0.1% of the value.
  – Life insurance (compulsory in case of mortgage).
  – Bank commission for bank cheques – 0.05% of the amount.

 

Total as a percentage of cost:

Buying a property from a property developer:	9% – without mortgage 12.5% – with mortgage
Buying a secondary market property:	8% – without mortgage 11.5% – with mortgage

3. Expenses and taxes for processing the sale of a property in the Canary Islands

• Sale of a property by a non-resident in Spain: – 3%.
  – Plus Value Added Tax – the tax is levied by the municipality and depends on the location, the year of construction and the number of years of ownership of the property by the last owner.