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14% fees on property purchase?

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  • 14% fees on property purchase?

    Hi All,

    when i first bought a property in Spain, i was told the legal/IVA fees would be around 10 to 11% of purchase costs, but upon looking to sell the first and then purchase a second property, i was then told it was around 14% fees.

    The proposed breakdown certainly does add upto 14%.

    Am i being robbed here?

    Phil

  • #2
    14% is pretty much the norm now if you are buying with a mortgage. Although the calcualtion should be 14% of the declared value.

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    • #3
      i Bought a little over a year ago (without a mortgage) and my total fees were a little over 8.5 %

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      • #4
        Phil,

        Ur being robbed!!! My God and people are agreeing this is normal?!
        When I bought I was charged 8%! And this is the typical rate of the company I used.

        If u want to chat more, email me:

        skemma1981@hotmail.com

        Good luck

        Emma

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        • #5
          Emma,

          i have emailed you, sorry in the delay, things looked like they were gonna fall through.

          phil

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          • #6
            just had a mail from the spanish chap who just found a buyer for my apartment, and explained i was being quoted 14% on the new purchase, and he cannot understand why.

            are the solicitors allowed to charge what they like for their services in spain (just like UK then), i always thought it was around 3% of purchase costs?

            By the way, he sold my apartment in Torre town in just over 3 months, not bad going.

            phil

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            • #7

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              • #8
                The costs vary according to various factors, the most important being the declared value, the loan amount (if you take a mortgage), whether or not its your primary residence and the %age opening fee which the bank charges you on your mortgage.

                There are other factors too, such as which part of Spain you´re buying in and the square metrage of the property. Solicitors fees can vary quite widely also.

                Part of my job is to accurately estimate these costs for clients. Obviously it´s very important to have an accurate estimate, so that you can ensure that the funds are in place prior to signing.

                Another thing to bear in mind is that if you are taking a mortgagethe banks usually over-estimate these costs, and insist that you have enough money in your account to cover these costs (as well as any shortfall between the mortgage amount and the amount owed to the vendor) plus a little bit extra to cover any eventualities. Once the dust has settled on the transaction, and all bills have been paid (eg valuers fees, gestoria´s fees etc) you will usually receive a small refund. When we purchased our house in 2005 the refund was about 1,000 Euros, but we had to wait a year to get it.

                Many builders (eg Polaris) are now declaring at 100% of purchase price on new builds, whereas smaller builders often continue to declare at a much lower value (sometimes as low as 70% of the purchase price). Because you pay 7% tax on the declared value, this means that the costs can vary by as much as 2% between builders. So, bear in this mind when people advise you to use a partiuclar percentage as an estimate of costs. The fact is that without knowing the exact property, and the mortgage loan amount, and lots of other things besides, you cannot accurately estimate the costs.

                What I can say is that the most you are likely to pay (excluding solicitors fees, but including valuation and other bank fees) is about 12%. This would be if the builder was declaring at full purchase price, and you were taking out a loan equivalent to 70% of the purchase price, and paying 1.5% to the bank for the arrangement fee.

                I do know how the arrangement fee can be reduced considerably though.

                I hope that helps prospective buyers.

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                • #9
                  Originalmente publicado por durx Ver Mensaje
                  Hi All,

                  when i first bought a property in Spain, i was told the legal/IVA fees would be around 10 to 11% of purchase costs, but upon looking to sell the first and then purchase a second property, i was then told it was around 14% fees.

                  The proposed breakdown certainly does add upto 14%.

                  Am i being robbed here?

                  Phil
                  I think people have not read the post correctly, they are selling one property and buying another therfore buying a property 10 to 11% and selling a property 3% tax plus tax on the amount that the property has gone up in value since you have owned it (capital gains tax).
                  So 14% sounds about right for selling and buying.

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                  • #10
                    Well spotted - a 3% retention is taken on the sale price if you´re not fiscally resident here, as a provisional estimate of capital gains tax.

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