Buying a flat in Madrid comes with a number of additional costs and taxes. Compared to other Spanish regions, purchase costs in Madrid are low. This article gives you an overview.
Registration fees or VAT
As in Belgium, there are registration duties in Spain, now called sales duties in Flanders. The counterpart in Spain is the Impuesto Transmisiones Patrimoniales (hereinafter ITP). Rates vary by autonomous region, but in Madrid, the ITP is generally 6% of the purchase price. Reductions are still possible. For example, consider a reduction for the purchase of the family home.
However, if you wish to buy a buy on plan or a new build, there is no ITP. In that case, you will pay 10% VAT on the purchase price. VAT is a national tax, so the same rates apply across the Spanish peninsula.
In addition to VAT, you also pay a stamp duty on new construction, namely the Impuesto sobre Actos Jurídicos Documentados (hereinafter AJD). This stamp duty is again regulated regionally, so each autonomous region may apply its own rates. In Madrid, the standard rate is 0.75% on the purchase price.
The registration fee when buying a flat in Madrid is 6% of the purchase price. If you buy a new build, you will pay 10% VAT and a stamp duty of 0.75%.
Notary and registration fees
In addition to taxes on the purchase price, you will also pay notary and registration fees. The fees for a notary in Spain depend on the purchase price, but are situated around 1,200 - 2,500 euros.
In addition to notary fees, you will also need to register your new property titles in the property register and land register. The cost of this is around 600 - 1,000 euros.
A notary in Spain does not advise you on the purchase. Nor does he do any legal checks on the property. Therefore, it is recommended that you get yourself guide. This allows you to buy safely.
The smaller costs are:
- bank charges
- transferring utilities
- application for a NIE number
In Spain, payment of the balance of the purchase price at the notary is made by bank cheque. The bank charges a fee for this. Read more about opening a Spanish bank account.
After you take ownership of the property, the contracts for water and electricity will be transferred. This costs around 200 euros.
An NIE number is a tax identification number for non-residents. This number is necessary to pay your Spanish taxes. There are several ways to apply for a NIE number. This can be done from around 10 euros per person. Read more about the options to apply for a NIE number.
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