Buying a property overseas involves a lot more than just searching for Taylor Wimpey Spain
and budgeting for the asking price of the home that catches your eye. There are also other
costs to consider, so be sure to take the following into account when crunching your
numbers.
As a general rule, factor in about 10-15% in addition to the price of the property. This should
be sufficient to cover the taxes, legal fees and other expenses involved in the purchase
process. Work this out before you start browsing for properties, so you know whether your
budget directs you to browse Taylor Wimpey Marbella or Taylor Wimpey Denia!
- Taxes
Whether you buy property in Spain brand new or opt for an older, resale home, taxes will
likely be your biggest single expense after the cost of the property itself.
When buying a new property in Spain direct from the developer (such as Taylor Wimpey
España), you’ll usually need to pay IVA (the Spanish equivalent of VAT) at around 10%. You’ll
also need to pay AJD (stamp duty) of roughly 0.5% to 1.5%.
If you buy a resale property, you’ll typically pay ITP, which is a Property Transfer Tax that
varies by region. Generally, it falls between 6% and 10% of the property’s purchase price.
AJD doesn’t usually apply to resale properties unless you’re buying with a mortgage, and
even then the lender usually covers this cost – but check to be sure in relation to the
property you’re buying. - Legal fees
Expect to pay around 1% of your purchase price for an independent lawyer as part of the
buying process. The lawyer will carry out due diligence on the property and check for debts,
ensuring that everything is in order and that the purchase can progress smoothly. - Administrative costs
Professional and administrative costs that you’ll have to bear include Notary fees and Land
Registry fees. The Notary fees cover the official signing of the property’s title deed, legally
certifying the transaction. The Land Registry fees are to register the property in your name.
This secures the legal ownership of the property.
Both costs are government-regulated and based on a sliding scale that increases in relation
to the value of the property being bought. Expect to pay around €600 to €1,200 for the
Notary fee and roughly €400 to €700 to cover the Land Registry cost. - Mortgage costs
As we discussed in this Taylor Wimpey Alicante article, if you’re buying a home in Spain with
a mortgage, you need to think about whether you’re borrowing from a lender in the UK or
in Spain.
Spanish banks will generally lend 60% to 70% of a property’s value to UK residents, so you’ll
need to factor in paying for 30% to 40% of the property and then the cost of the mortgage
repayments on the remaining share of it.
Borrowing from UK banks to buy property in Spain isn’t always easy, as most high street
banks don’t provide this service. However, there are international and private banks that
may be comfortable with this. You could also remortgage your UK property in order to buy a
home in Spain outright, if that suits your circumstances. Either way, you’ll need to factor the
cost of the mortgage into your plans. - Viewing trip costs
Getting to know the area you’re planning to buy in is all part of the fun. Just remember to
factor the costs of viewing trips into your budget. It will also help to open a Spanish bank
account as part of the process, and you’ll need to obtain a Número de Identidad de
Extranjero (NIE – a foreign identity number), so be sure to take care of these during your
trips to get to know the area. - Furniture costs
Furnishing a new home is a significant expense. If you’re buying a holiday home in Spain
(rather than somewhere you’re going to move to with all of your current possessions), you’ll
need to plan for the cost of furnishing it. As a rough estimate, allow 5% to 15% of the
property value to cover the furnishings, depending on how simple or luxurious you want
your new property to feel.
If you’re moving to Spain, instead of planning to furnish your new home, work out what
your removal costs will be instead. - For more information, please contact Taylor Wimpey España on 08000 121 020 or visit
https://www.taylorwimpeyspain.com/. If you reside outside of the UK, you will need to
call 00 34 971 706 972.
