Costs of buying a luxury property in Marbella

• As a general rule, it is correct to estimate that, as a whole, the sum of the taxes and associated expenses will increase the net price of the property by 10-15%.

• Ownership of a property in Spain entails a number of costs for the owner.

• These can be summarized in the Property Tax (IBI), Municipal Waste Tax, Community Expenses, and the contracted Services in the property (electricity, gas, water, telephone, others) and payable until the day on which the public deed of sale is signed by the new owner.

• In the event that these expenses cannot be accurately calculated on such date, the buyer or his legal representative may withhold from the final payment an amount to cover them.

Real Estate Tax (IBI).

This is a property tax levied by the local council and is currently a percentage of the cadastral value. It can vary depending on the municipality where the property is located. As a reference, the applicable rates range between 0.3% and 1.3% of the cadastral value of the property. Before formalizing the property acquisition, you have to obtain from the seller a copy of the last I.B.I. paid receipt. Here you can verify the value and the exact amount of the tax.

The Spanish Ministry of Public Works also recommends that potential buyers of newly built properties obtain from the developer a Certificate from the Mercantile Register with the registration details, registered office and tax identification number to confirm its status as a legal company.

In the case of so-called resale properties, the authorities suggest that buyers request up-to-date property tax (IBI) receipts and (if applicable) a certificate from the Community of Owners confirming that there are no outstanding community fees. In addition, official confirmation that the property is not subject to any rental contract should also be obtained.

Municipal Waste Tax.

Must be paid to the local authorities in the amount stipulated by them.

Community Charges.

These fees will be paid to the Community of Owners for the services and maintenance of the common areas when the property is in an urbanization or condominium. At the signing of the deed of sale at the notary’s office, these fees must be up to date and the owner must provide a certificate issued by the community of owners, stamped and signed by the administrator. The cost of this certificate will be paid by the owner.

Notary.

According to the law, as established in Article 1455 of the Spanish Civil Code, the seller must pay the costs of the deeds, and those of the first copy and the rest after the sale will be paid by the buyer, unless otherwise agreed between the parties. The fees are fixed by law, depending on the number of deeds and pages of the minutes, and the final cost varies between 0.2% and 0.5% of the price of the property.

Land Registry.

Once the payment has been made, the purchase contract signed before a notary and all taxes paid, the property must be registered in the name of the new owner in the Land Registry, so that the Public Administration can keep the corresponding register. Its cost is determined by Law, and depends on the price of the property. This cost is paid by the buyer, and represents between 0.10% and 0.25% of the price of the property.

Lawyer’s fees.

These vary depending on the complexity of the operation, although the usual fee is 1.0% of the amount of the property, excluding taxes and expenses.

Mortgage.

The new mortgage law establishes that the borrower will only have to pay the cost of the mortgage appraisal, while the notary, registry and AJD fees are paid by the bank. What you will naturally have to pay is the financial cost of the loan, which includes an arrangement and cancellation fee, and the commercial margin (between 1.5% and 3%), added to the reference interest rate, which is usually Euribor 12 months.

Power of Attorney.

It is usual to delegate your lawyer to represent you in the signing and processing of documents and contracts during the process. In addition to avoiding unnecessary travel, this will speed up the process. The cost of a Power of Attorney is around €250.

Foreigners’ Identification Number (NIE).

This is an identification document issued by the General Directorate of the Police (Model EX15), and is needed to file tax returns and communications addressed to the Inland Revenue. This NIE must be applied for sufficiently in advance to be able to carry out the necessary formalities to buy a property in Spain. The NIE is also necessary if you wish to apply for residency and protect your EU rights.

*Legal Note. The legal, tax and financial legislation and regulations applicable to real estate investment are subject to frequent changes, and their scope and impact vary according to the personal and financial circumstances of each investor and the characteristics of each type of transaction. This document does not constitute an investment recommendation on any asset, nor does it have any contractual effect. Contact Samsara Wealth for a global and detailed analysis of your real estate investment project, adapted to your asset profile and the type of transaction in each case.