If you do not know them, it is very easy to get lost with the expenses and paperwork to buy a home . Because buying a house, especially when it is the first, represents a great change in a person’s life, and this also entails a series of extra expenses and mandatory procedures for future owners.
Normally, the price of the house must be added between 10% and 15% more for expenses. If this is your case and you have decided to take the big step, our advisers at Gilmar analyze what expenses the buyer pays and what procedures must be carried out to formalize the purchase of the home.
The expenses of the sale
- I would notarize Notary fees are regulated by the State, so all notaries charge the same fees. In the case of a deed of sale, the cost is between €600 and €900 depending on the value of the property.
- The Land Registry . The same thing happens with notarial expenses, the fees are set by regulations and their amount will depend on the price of the property. Registration fees usually range between €400 and €650.
- The taxes . In the same way as the two previous points, in the case of taxes, the amount to be paid will depend on the price of the home and whether it is new or second-hand:
- If it is a used home, the buyer will only have to pay the Property Transfer Tax (ITP) . The amount will depend on the value of the property declared in the deed, which is the base, and the autonomous community in which the property is located, which decides the percentage that is applied on that base. It usually ranges between 6% and 10%.
- If it is a new home, in addition to the Transfer Tax, the buyer must pay 10% VAT calculated on the deed price or 6.5% if the home is in the Canary Islands.
- The agency . This would be the only optional expense. The buyer can take care of all the paperwork or can hire a professional like Gilmar . In this case, each manager freely decides the fees for him.
- Mortgage expenses . Since the entry into force in 2019 of the new Mortgage Law, notary fees, the Tax on Documented Legal Acts and the cost of registration in the property registry, are assumed by the bank. However, the buyer will have to add the following expenses to those we have already seen above:
- The appraisal. The bank forces the buyer to request it and its cost is between €250 and €600, depending on the appraiser, the type of property and its value.
- The opening commission. This commission is deducted by the bank directly from the money delivered to the mortgagee and can be up to 2% of the borrowed capital. Although many banks do not charge it.
Procedures before buying a home
Before buying a home, it is recommended that the buyer carry out some checks. In case you do not want to carry them out yourself, real estate services include all these procedures, you will not have to worry about anything.
The first thing to do is request a simple informative note at the Land Registry to confirm that the legal status of the home is correct and that the property has no associated charges or encumbrances.
Likewise, you must ask the town hall if the payment of the Real Estate Tax (IBI) is up to date and obtain a debt certificate. It is also advisable to ask what the status of construction is in the current and future urban plan.
In addition, it is also necessary to find out if the property is up to date in the payment of the community of owners fees . The president or administrator of estates will have to provide the buyer with a certificate with the information.
And depending on the type of property to be acquired, it is also advisable to ask the seller for the certificate of occupancy or first occupancy license, and the Technical Building Inspection (ITE) certificate. In addition, the selling party is required to provide an Energy Efficiency Certificate (CEE) for the home.
Procedures during the purchase of a home
The signing of the deposit contract
Once the inquiries about the legal status of the home have been made, if everything is in order, the deposit contract must be signed . It is not a mandatory procedure, but it is the most common, either between individuals or with a promoter.
This contract is a private document between buyer and seller through which an amount is paid to reserve the property. This amount, which is usually 10% of the price, is deducted from the total. However, the parties may agree on another amount.
Although it is a private document, it has legal validity and is regulated in Title IV of the Civil Code. So keep in mind that according to article 1454, in the event that the sale of the home is canceled for reasons attributable to the buyer, he will lose the amount paid as a deposit. On the contrary, if it is the seller who withdraws, he will have to return to the buyer twice the amount delivered.
In addition to the price and the form of payment, the contract must reflect all the agreements reached by the parties on the sale, so that there is no doubt about the scope of the operation.
The signing of the deed of sale
After signing the deposit contract, the parties will have agreed on a date to formalize the sale in a public deed. By signing this document, the notary public records the change in ownership of the home so that, later, the Property Registry can be updated.
In addition, the deed is the support that the buyer has if there is any problem after the purchase, since it reflects all the agreements reached with the seller, the amounts paid and the withholdings made to settle debts or outstanding amounts.
The notary is also in charge of requesting up-to-date information and documentation on the legal status of the home and attests to everything. In addition, in the event that the buyer is going to sign a mortgage, he makes sure that he has received all the information required by law.
Procedures after buying a home
Once the deed is signed, the following procedures must be carried out in that order:
- Pay the Property Transfer Tax (ITP) during the 30 days following the purchase of the property.
- The owner, meanwhile, has the same term to pay the municipal capital gains .
- Register the deed in the Land Registry .
- Make the change of ownership in the Cadastre , although this procedure is done by the notary after signing the deed.
- Change the ownership of the IBI receipt and other municipal taxes, such as the garbage rate.
- Register or change the ownership of the supply contracts , and of the community of owners fee .