Update December 2018 - If you are a Belgian or Dutch person looking to buy a property in Spain, you may want to consider a mortgage in Spain. Indeed, there is an approved bill whereby banks will be responsible for most of the costs of applying for a mortgage loan. It is scheduled to come into force in March 2019.
This article lists all the costs of a mortgage in Spain.
Before the bank may issue a mortgage, a licensed appraiser must determine the value of the property. This valuation fee is payable by the mortgage applicant in Spain. The price depends from bank to bank, but assume around 0.1% of the value of the property. These costs remain at your expense.
Notary fees and registration in the land register
If you take out a mortgage when buying a property in Spain, the notary will draw up two notarial deeds: the purchase deed and the mortgage. In addition, the mortgage must also be registered at the land register. Currently, these costs are at your expense, but from the moment the new law comes into force, these costs will expire unless you have additional clauses included in the notarial deed.
Spanish regions levy a stamp duty (AJD - Actos Juridicos Documentados) on between 115% and 200% of the value of the mortgage. This rate varies from bank to bank, as the rate is calculated based on the risk taken by the bank when writing the loan. This is called the responsabilidad hipotecario. Therefore, it was advisable to compare different Spanish banks.
Since November 2018, stamp duty has been charged to banks.
The rate depends on region to region. In the Comunidad Valenciana the rate is 1.50%.
An example. You take out a mortgage loan worth €200,000. The taxable base at Bank X is 160% of the mortgage. The taxable base here is €320,000. At 1.50%, the stamp duty then amounts to €4,800. However, if the bank has to apply a higher rate, say 180% of the mortgage, it is 600 euros more. So this tax is now borne by the bank.
Some banks will stipulate that you take out fire insurance and/or life insurance with them.
From March 2019, the administration fee will be borne by the bank. However, we see in practice that banks are creative in charging such fees.
A previous post explained that certain banks in Spain usually charge a cheap break-up fee. This can be interesting if you are buying as a pure investment. The new mortgage law also stipulates the break-up fee.
Other acquisition costs
Besides the cost of the mortgage in Spain, there are also the regular purchase costs.
From the entry into force of the new law, the cost of a mortgage in Spain will drop significantly. However, the question is to what extent banks can pass on these costs. Therefore, it is important to compare well.
Do you have questions about borrowing in Spain? Together with our partners, Confianz can check without obligation which banks offer the cheapest mortgages and conditions.