Founded in 2010 we are a residential property agent that specialises in the Alicante, Castilla-La Mancha, Murcia and Valencia regions of Spain. Because we focus on particular regions we have in-depth local knowledge and connections. We can help and advise the whole way and even put packages together to help you get your utilities, Padron and bank accounts set up.
Olive Grove will mediate on behalf of our clients to create the best deal for the seller and the buyer.
At Olive Grove we are multilingual and advertise our Spanish properties in 60+ countries worldwide, focusing on Europe, USA & UK
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Frequently Asked Questions
Yes it is easy to buy a house in Spain, but be sensible.
Do not be pushed into buying a property. From your searches the internet you will know thereare many properties available so do not think that you have to make a decision immediately. Never feel as if you are being rushed to make a decision regarding a particular house. If an Estate Agent tells you, after you have expressed an interest in a property, “we have someone else coming to see that one next week”, ask if they have anything else similar or indeed take time out to view with another agent. It is imperative that you feel comfortable and happy when the time comes to sign contracts not as if everything is being rushed.
You wouldn’t purchase a house in England without using a Solicitor so ensure you do the
same when purchasing your home in Spain. There are many English speaking Spanish
Solicitors available and whilst your Estate Agent will be able to recommend one or two, you
may already know of one or indeed have seen one advertised that you would you like to use.
At Olive Grove Estates, we are happy to work with the Solicitor of your choice and will assist them in every way we can.
Your Solicitor will do the majority of the work regarding the purchase of your property.
Generally the Estate Agent will have information from the Vendors and they will then liaise with the Solicitor who will then start conducting the various checks prior to completion taking place.
If at any stage of the purchasing process you have any questions then ask your Estate Agent or Solicitor who will be able to answer these questions for you.
Never feel that you don’t like to bother your Estate Agent with questions that you think they might think are silly, as if a question arises then obviously it needs an answer.
Once you have been to the notary, signed for your property and received the keys from the
vendors, the property becomes yours!! As soon as they property is yours you can move in
straight away. There will be a couple of formalities to complete such as change of utilities into your name and putting you on the local padron (electoral roll) and either your Solicitor or Estate Agent will help you with this. At Olive Grove Estates we are happy to assist you following completion of your purchase.
It is easy to place children in local schools but unlike England where you choose the school
your children attend, this is done by the town hall. Please be aware that things in Spain, especially Inland Spain, vary dramatically from town to town and indeed province to province, so what happens in one town or village IS NOT custom and practice everywhere!! Should you prefer your child(ren) to go to an International School then the education is totally different and of course then you will have a choice.
The education system in Spain is excellent and children are taught “real values” including
manners and respect. They are taught so that they can reach their full potential and are
actively encouraged to continue into further education.
In Inland Spain we are still very lucky with how the English are regarded by the Spanish. On
the whole the Spanish have a very welcoming nature and they are quite happy to share their homeland with the ex-pat community. In Inland Spain the numbers of ex-pats are very much reduced to those on the coast and therefore the traditional Spanish way of life still prevails.
They still have siestas and hold all their traditional Spanish Fiestas. The best way to integrate with the Spanish is to try speaking the language as this will afford you a lot more respect than if you expect them to speak English. Always remember you are moving to their country and if you respect their values and traditions you will find they will respect you in the same way.
It will always help if you have a few words of Spanish, no matter how few. Whilst it isn’t
essential for you to learn Spanish, the one thing you will notice is that in Inland Spain
compared to the coast, there is a lot less English spoken. If you move to an area where there are some ex-pats then you will more often than not find a friendly face who will help you out of an awkward situation and in many instances it is amazing how hand signals or drawings help out!! But don’t deny yourself the pleasure of trying out new Spanish words only to find that somebody does understand you. Of course you will make mistakes but the Spanish will warm to you much more if you make the effort of speaking to them in their native tongue.
You will find some Inland Spanish Towns and Villages offer free, or very cheap, Spanish
lessons to ex-pats to assist with the integration.
Many people have brought their pets with them when moving to Spain and it is an easy
process. You must have a Pet Passport and your English vet will be able to help you with this.
If you are planning on taking your pet back to England it is essential that this Pet Passport is kept up-to-date or else your pet will not be allowed back into England. Whether you choose to fly or drive across there are many options available and if you speak to the Company you are flying or sailing with, they will be able to help you.
Once you and your pet have arrived at your new home it is beneficial to locate your nearest
vet and both you and your pet go to the new vet to introduce yourselves. That way, if there is a problem at a later stage when your pet needs to visit the vet at least they have already met them and will feel at ease with them. Remember an animal is the same whether English or Spanish and a vet will be there to help your pet, don’t panic if you feel cannot speak the
language fully, the vet will still be able to help your pet.
You can import an English registered RHD drive car into Spain without any problem
whatsoever. Any Gestoria will be able to help you with this. It is a very quick and easy
process. The only thing you will have to do is change your headlights although the more
modern cars have an integral switch to do this. You also have to have an ITV (Spanish
equivalent to MOT) undertaken and then take all the paperwork to the Gestoria who will do
everything else for you. The cost for the Gestoria can vary from place to place but as a
guideline in Spring 2010 (Caudete) it was 118euros.
English appliances do work in Spain but if you are going to buy new appliances then it may be more beneficial to purchase them in Spain. The prime reason for this is that if there is a problem with the appliance when you have moved them to Spain it may not be covered under the guarantee. Whilst some appliances do have Worldwide cover it would be beneficial to check this prior to paying for the appliance to be transported across to Spain.
Separately, when making purchases here in Spain, shops are very keen to give discount
especially in the Inland Spanish areas where they like to know that people are buying their
products locally and supporting their local community.
The medical service in Spain is excellent and this is through personal experience and also that of Clients. When ringing for a doctors appointment you are likely to be given one for the same day, if not it will be the following day. If the doctors have any concerns whatsoever and feel you need further tests, you are referred the same day – in fact you take the paperwork to the receptionist who then faxes it through to the hospital.
The waiting lists are almost non-existent and the healthcare from the professionals excellent.
Hospitals like to have the most modern equipment and utilise this to its full potential. Unlike English hospitals though, the families do the day-to-day care and are actively encouraged to undertake all the lesser duties thereby allowing the nurses and doctors to do the jobs they are paid to do. Visiting hours are all day and families are actively encouraged to spend as much time as possible there. This is very subjective dependent upon where you choose to live.
Inland Spain is definitely cheaper than the coasts and can be cheaper for many things than
England. For further information on our current guide, please request our “Cost of Living”
Please note the information provided in this information pack is of general interest only and is not to be construed or intended as substitute for professional legal advice. Laws and tax rates change over time, so this information may be out of date. Please consult a tax specialist or the tax authorities for the latest information. There are no guarantees that this information is correct and up-to-date, so you use this information at your own risk. (03/01/2021)
What are the costs involved in buying a property in Spain?
As a buyer of property in Spain there are a number of costs and taxes over and above the property price that you will have to pay. Depending upon whether you are buying a new property from a developer, or a resale property from a private individual, you will either have to pay VAT & Stamp Duty, or a transfer tax. The different cases are explained below, along with the other costs and taxes that are common to both cases.
1. Costs associated with buying a new home from a developer (or bank)
These are the costs you will face when buying a new home in Spain from a developer or bank. It doesn’t matter how long ago the property was built. To count as a new home it must never have been sold before.
1.1 VAT & Stamp Duty (IVA & Actos Jurídicos Documentados – AJD)
These taxes apply for residential properties being sold for the first time (never previously occupied), or for commercial properties and plots of land. This is a national tax, so VAT is the same wherever the property is located (with the exception of the Canaries, which have their own version of VAT).
At present VAT (known as IVA in Spain) is 10% on the purchase price of residential properties (villa, apartment, etc), and 21% for commercial properties and plots of land.
VAT on new homes in the Canaries is known as IGIC (Impuesto General Indirecto Canario), and currently stands at 4.5%
VAT on newly-built homes rose from 4% to 10% on 01/01/2012.
The Stamp duty (known as AJD) is 1% of the price of the purchase, but might go up in some regions, so be sure to check on the latest rate. Both VAT and Stamp Duty are paid by the buyer, and if any deposit is paid before completion of the sale, such deposit will be subject to VAT at the moment of payment of this deposit. In this scenario there is no transfer tax to pay.
2. Costs associated with buying a resale home in Spain
These are the costs you will face when buying a Spanish property that has been sold before. Generally speaking, that means when buying a home from a private individual.
2.1 Spanish Transfer Tax (Impuesto sobre Transmisiones Patrimoniales – ITP)
This tax applies if the property is deemed to be a second or posterior transfer (i.e. not the first time a newly built home is bought), and is paid by the buyer. If any deposit is paid before completion of the sale it is not subject to ITP pro rata. However the full amount of ITP still has to be paid upon completion. In this scenario there is no VAT to pay, and stamp duty is already included in this tax.
The Transfer Tax rate is ceded to the autonomous regions, who can choose to apply the general rate, or their own rate.
The general (national) rule of ITP is 7%, but many of the autonomous regions have applied higher local rates. The rate you pay depends upon the autonomous region where you buy (for more information see Transfer tax on resale homes – Impuesto de Transmisiones Patrimoniales (ITP))
2.2 Income tax provision when buying from non-residents
If the seller is not resident in Spain, the buyer has to withhold 3% of the purchase price and pay it to the tax authorities (application form 211). If this is not done the property will be considered by the tax authorities as the asset backing the capital gains tax liability of the seller. This condition is very unlikely to apply when purchasing from a developer.
3. Costs associated with both new build and resale property purchases in Spain
These are the additional expenses you are likely to face when buying any property in Spain, regardless of whether the property is new or not.
3.1 Estate agency Fees
Estate agency fees or commissions are paid by the seller, unless otherwise agreed. If the buyer uses a search agency then search fees are paid by the buyer.
Agents charge between 5% and 15% of the sale price, depending upon the region and type of property. Unless the buyer has specifically agreed to pay the agent’s fee this cost will be built into the sale price.
3.2 Legal Fees
You are strongly advised to hire a lawyer to help you during the buying process. Your lawyer drafts and reviews contracts on your behalf and can explain all the legal and administrative issues you face. Your lawyer should also carry out any necessary due diligence (checking ownership claim of the seller, charges on the property, permits, etc.) and arrange all the required documents to complete the process (property registration, tax payments, etc.).
A lawyer – Abogado in Spanish – will charge you according to the service you require. This will vary according to the complexity of the purchase. Many charge around 1% of the purchase price in legal fees. Be warned that some lawyers charge 1.5% or more of the sale price, which is a rip off. Even 1% can be unreasonably high given the work that is involved in a straightforward purchase of an expensive property with no legal complications. Your best option is to try and find a good lawyer who is prepared to charge on an hourly basis (we can recommend good lawyers for you). Legal fees for a purchase without any complications and charged on an hourly basis should be in the region of 1.000 to 2.500 Euros.
3.3 Spanish mortgage costs
If you choose to buy with a mortgage then this will incur several additional costs. First there will be the property valuation that the mortgage provider will require before granting the mortgage. This is paid for the by the buyer and can cost around 500 Euros. Then there will be the costs of the mortgage itself. This varies according to the provider, and even according to the particular branch. However there is usually some kind of opening fee of around 1% of the value of the mortgage. Up until Monday 12th November 2018 you would also have had to pay Stamp Duty known locally as Actos Jurídicos Documentados (AJD) on new mortgages (a tax which varied by region, and can be as much as 3,000€ on a mortgage with a face value of 100,000€), but but a change in the law means that from now on AJD will be paid by lenders. Finally a mortgage will increase the Notary expenses.
3.4 Spanish notary costs
Notary expenses are nearly always paid by the buyer and are calculated in relation to the purchase price declared in the deeds of sale. To be on the safe side you should calculate Notary fees as being 1% of the purchase price declared in the deeds of sale. In many cases however Notary fees are more like 0.5% (or less) of the price declared in the deeds.
3.5 Spanish Land Registry Inscription Fees
Expenses related to inscribing the sale with the land registry are also nearly always paid by the buyer, and are calculated in relation to the purchase price declared in the deeds of sale. To be on the safe side you should calculate 1% of the purchase price declared in the deeds, though once again it depends upon the property and the area, and the fee could be considerably lower.
4. Other costs associated with buying property in Spain
Though not strictly transaction costs like fees and taxes, there are other costs to bear in mind when buying a home in Spain. After all, they all come out of the same pocket – namely yours.
4.1 Banking Costs
To buy property in Spain you will almost certainly need to open an account with a bank in Spain, and may need to transfer money from abroad. There maybe international transfer costs – check with both banks – and if you need to exchange currency to buy Euros make sure you use a currency broker to get a good rate of exchange and overpaying for Euros. We are affiliated with A Place in The Sun and can get you preferential rates with them on exchanging money for your new property (usually 4% saved).
Once you have got the funds in place, you will need to pay the vendor on the day you complete the purchase. The most common way to do this is to take a banker’s cheque along to the notary’s office to give to the vendor when you sign the deeds. Banks try to charge as much as they can for issuing banker’s drafts, and I’ve even known them to charge 0.5% of the cheque’s value. However, you can also get them for as little as €50 to €60. It all depends on the deal you have with your bank. Make sure you clarify this with your bank before you ask for the cheque.
4.2 Furniture Costs
Once you own a property you will need to furnish it. The cost of furnishing a property depends entirely upon what you want. However as a very general rule of thumb a 2 bedroom apartment will cost around 10,000 to 15,000 Euros to furnish nicely if you buy everything new. Of course there is no limit to how much you can spend, though you can also get away with less than 10,000 if you are on a tight budget (all from IKEA, for example). There are of course much cheaper ways and there are a lot of 2nd hand shops and markets available where you can pick up incredible old traditional Spanish furniture at a very reasonable price.
4.3 Plusvalía Municipal Tax
This is normally paid by the vendor, but it can become a problem for the buyer if the vendor fails to pay it. Buyers have to be particularly careful with this tax when the vendor does not live in Spain. See the section below on costs to bear in mind when selling property in Spain for more information.
Before buying a property in Spain you may also wish to have a building or structural survey done, and that will have a cost. (we can arrange building surveys in Spain with our architect).
In Summary, allow for between 12% and 15% of the purchase price in taxes and other costs, though it does depend what and where you are buying.
Costs of owning property in Spain
There will of course be costs associated with owning a property in Spain. Some of these will be maintenance costs, such as cleaning, repairing, reforming, utility bills, rubbish collection, and so on. These will be determined by the size and type of the property you buy. Obviously a large villa with a garden and pool will require much more effort and cost to maintain than a small apartment. For cleaning a figure of 10 Euros an hour is fairly typical throughout Spain.
Apart from the general maintenance costs referred to above, there are a number of costs in the form of taxes and fees that property owners in Spain face.
Property Ownership Tax (Impuesto Sobre Bienes Inmuebles – IBI)
A local tax on the ownership of property in Spain, irrespective of whether the owner is a resident or not. Calculated on the basis of the valor catastral (an administrative value that is usually lower than the market value, sometimes considerably so) set by the town hall the tax rate goes from 0.4% – 1.1% of the valor catastral depending on the Spanish region.
Annual Wealth Tax (Impuesto Sobre Patrimonio)
This tax has been changed several times in recent years. For the latest situation see Spanish Wealth Tax (Patrimonio)
Personal Income Tax (Impuesto sobre la Renta de No Residentes – IRNR)
Non-residents who own property in Spain have to pay an annual income tax that varies according to whether the property is rented out or not.
Not rented out
Non-resident property owners who do not rent out their property and who do not have any other source of income in Spain pay income tax based on the value of their property. The tax rate is fixed as 25% of 2% of the valor catastral of the property.
The tax on a property with a valor catastral of 700,000 Euros would be as follows:
Property value for tax purposes = 700,000 Euros
Taxable base (2%) = 14,000 Euros
Tax (25%) = 3,500 Euros
If non-residents rent out their property and receive an income in exchange, they are obliged by law to declare this income and pay taxes on it. The taxable base and the tax rate will be determined by the laws as they apply to each person’s particular circumstances (taking into account the double taxation treaty – if any – between Spain and the country of origin of the non-resident). In many cases non-residents simply pay a flat rate of 25% of the gross income they earn from their property in Spain.
Residents in Spain will have to pay the income tax based on their income earned during the year. The tax rate depends on the level of income.
Owners of property that is part of any development, building, or complex in which common zones are shared with other owners are by law obliged to be members of the community of owners, known as the Comunidad de Propietarios. This will entail paying community fees for the upkeep of the common areas, and any other services that the community vote for. The fees will vary according to the magnitude of the common areas, the costs of maintaining them, and the services that the community vote for. A budget for annual community expenses is approved by majority vote of all owners (or representatives) who are present at the annual general meeting of the Comunidad de Propietarios.
Household insurance will vary according to the circumstances of the owner and the type of property. However it should be born in mind as a cost that all property owners will face.
NOTE: Costs to bear in mind when selling a property in Spain.
Plusvalia municipal tax
A special reference should be made to the local/municipal capital gains tax – known as Plusvalía. This is a local / municipal tax that only applies to the increase in value of the land upon which urban properties are built, and that is levied at the time of transfer of such properties. It is calculated on the basis of the valor catastral (an administrative value that is usually lower than the market value, sometimes considerably so) of the property. The amount to be paid will depend on how long the seller has owned the property: the longer the period of time during which the seller has owned the property, the higher the amount of tax.
This Plusvalía Municipal tax is usually paid by the vendor, but sometimes the buyer agrees to pay it – it’s part of the negotiation process. Be warned that if the vendor fails to pay it, the buyer then becomes liable for the unpaid tax, with interest!. Also, the town hall might not register the property for local real estate tax (IBI) purposes, until the Plusvalía is settled. That means the new owners starts accumulating unpaid IBI tax bills (without notification), plus penalties and interest, all without knowing it.
When the vendor is a non-resident, the law states the buyer is liable for this tax, even if the parties have agreed that the vendor will pay. So when you buy a property in Spain, especially from a non-resident vendor, make sure you or your lawyer checks that the Plusvalía Municipal has been paid by the vendor within 30 days of the sale.
The safest way to play this, from a buyer point of view, is to agree to pay this tax using funds deducted from the agreed sale price. That way the buyer can be sure the Plusvalía has been paid. This is particularly relevant when buying from a vendor who does not live in Spain (non-resident).
Capital gains tax
Spanish capital gains tax rates on property and other assets
If the vendor is a non-resident, there is also a Spanish withholding tax retention, which the buyer pays directly to the tax authorities, to cover the vendor’s capital gains liability
When buying property in Spain, always keep digital and hard copies of all invoices related to your purchase. Likewise, if you ever do building work on the property once you own it, keep copies of all licences and invoices. You may be able to offset these expenses against capital gains when you sell, and so reduce your Spanish capital gains tax on property sales
The right to buy property in Spain is not restricted to EU citizens. Anyone who can pay the purchase price is able to purchase property in Spain. Brexit has not changed that. Many people from all corners of the world buy and own property across Spain.
In Spain your right to do what you wish with a property that you own is not affected by your nationality. If you wish to buy a property in Spain to rent out, whether short term or long term, then you are still able to use the property for that purpose after Brexit, according to the rules applicable in each autonomous community.
What has changed is the rate at which you pay tax upon the rental income that you earn in Spain. EU residents pay tax on rental income in Spain at the rate of 19%. Brexit means that UK residents are obliged to pay tax at the same rate as non EU citizens, which is currently 24%. Whereas prior to Brexit you could reduce the amount chargeable to tax by deducting allowable expenses of the rental, that is no longer possible for UK residents who will be bound to pay 24% of the gross rental income in tax.
It is important to note, however, that you will be able to set off the tax paid in Spain against your UK tax bill for the same income.
However you are taxed on income received from your Spanish property, it will remain essential that you rent out your property in accordance with the local laws.
As Benjamin Franklin famously said, “In this world nothing can be said to be certain, except death and taxes.” Even Brexit cannot remove the certainty that if you own property in Spain you are obliged to pay tax. As you will have seen above, an effect of Brexit is that the rate of taxation has increased.
However, many of the taxes you are obliged to pay in relation to property ownership in Spain remain unchanged.
The main taxes you will encounter as a property owner in Spain are purchase tax, IBI (similar to council tax) and VAT (called IVA in Spain), all of which are charged at the same level no matter what your nationality.
Brexit does not affect inheritance tax payable in relation to the estate of a UK resident. Whereas inheritance tax payable varies according to the autonomous community (there are 17 in Spain) in which property is located, UK residents pay inheritance tax at the same rate as Spanish residents or other EU residents.
Before Brexit, as EU citizens, UK nationals benefited from freedom of movement, meaning that they had the freedom to live and work in any country within the European Union, including Spain.
Many Brits took advantage of that freedom of movement in order to start a new life in Spain, or to retire to Spain. The thought that this has become difficult after Brexit is very concerning for many who are considering buying property in Spain.
It has never been necessary for UK citizens travelling to Spain for a holiday to require a visa or any other travel document than their passport. That situation has not changed. According to the current rules, UK nationals can travel to Spain at any time as tourists, provided they do not stay longer than 90 days in any 180 day period.
If UK nationals want to stay in Spain for longer than that period, then they will need to apply for permission to do so.
Given that the global COVID-19 pandemic has straddled the end of the Brexit transition period, it is difficult to gauge whether Brexit has had any real impact on Spanish property prices.
As the pandemic restrictions ease and people can once again visit Spain to view property, we will have a better idea of the effect of Brexit on Spanish property prices.
If you have made the decision that owning a home in Spain is for you, Brexit need not deter you. The truth is that almost none of the fundamental aspects of buying and owning property in Spain have changed as a result of Brexit.
If you are thinking about buying property in Spain and you are concerned about how Brexit affects you, please be in contact with us and we can put you in touch with a solicitor.
Brexit Information last updated: 21 January 2021 – Solicitors in Spain
These are a selection of the questions we have been asked. Please be aware that we are human and as such we all want and need to know different things so if you have a question, no matter what it is, PLEASE ASK!!.