We wrote about the taxes and duties you will have to pay when buying property in Spain in the article “Tax on buying property in Spain for foreigners”. Besides the compulsory taxes, your budget needs to include the additional costs of buying property in Spain: some of them come before the purchase, and some are directly linked to owning the property.
Legal services
At the preparation stage, the most important additional cost is the lawyer. If you trust the seller completely, you can save on legal checks. But if you have any doubts, or want to keep the purchase under your own control, you cannot do without a professional lawyer. A lawyer’s fee is usually 1% of the purchase price.
The lawyer will check the property for hidden charges or circumstances that could stand in the way of the sale, explain your rights and obligations, check the seller’s status and the terms of the reservation contract. You may also need an interpreter at the preparation stage.
Bank charges and insurance
Buying property in Spain requires opening a bank account. Firstly, the purchase will be paid without cash (usually by banker’s draft); and secondly, various costs will need to be paid from the bank account: the annual tax, utility bills, community fees and insurance. It is insurance that belongs to the second group of additional costs of buying property in Spain.
Of course, it is up to the owner whether to take out insurance, and the owner is free to choose the insurance company and agent. The problem is that recently all the large Spanish banks have started pushing additional financial products. You can say no, but then the bank will either refuse to open the account or charge a very high fee for running it.
So insurance and bank charges should be included when you calculate the additional costs of buying property in Spain.
Paperwork
Also, when opening a bank account in Spain, foreign nationals have to prepare documents showing the amount and source of their income. So you should allow for the cost of preparing documents, having them apostilled and translated by a sworn translator in Spain.
Each bank has its own requirements for foreign documents. As a rule, Russians are asked for a letter from their employer stating salary, position and length of service, as well as a 2-NDFL income statement. If you have passive income from dividends, you can provide the company’s articles of association; for rental income, the relevant tenancy agreements, and so on. Sole traders provide an extract from the register of individual entrepreneurs and a 3-NDFL tax return.
Utility contracts
The last group of additional costs of buying property in Spain is transferring the contracts with the utility companies that supply electricity, water and gas. The amount depends on the company: some transfer contracts free of charge, others charge a fixed fee.
If the property you bought has stood empty for a long time and all the utilities were disconnected, reconnecting them will cost more than simply transferring the existing contract from the old owner to the new one.
