{"id":97483,"date":"2022-05-06T13:51:42","date_gmt":"2022-05-06T11:51:42","guid":{"rendered":"https:\/\/aq-acentor.com\/?p=97483"},"modified":"2023-01-24T11:09:53","modified_gmt":"2023-01-24T10:09:53","slug":"costs-and-taxes-when-buying-a-home","status":"publish","type":"post","link":"https:\/\/aq-acentor.com\/en\/costs-and-taxes-when-buying-a-home\/","title":{"rendered":"Costs and taxes when buying a home"},"content":{"rendered":"\n<p>Thinking about buying a <strong>property<\/strong> but don&#8217;t know what the transaction <strong>costs <\/strong>are? Be aware that; not only do you need to pay the <strong>amount<\/strong> that the home costs; the transaction includes some <strong>taxes<\/strong> that you\u2019ll have to pay, as well other costs. What are they? How to <strong>calculate the cost of buying a property?<\/strong>&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Costs of buying an apartment or a house<\/h2>\n\n\n\n<p>People generally think that the last step when it comes to buying a property is when the<strong> purchase contract is signed<\/strong>. Nevertheless, there are some <strong>costs<\/strong> that you\u2019ll have to take into account upon acquiring an apartment or house. It isn\u2019t enough to just <strong>pay<\/strong> for the property, whether in one go or by taking out a <strong>mortgage<\/strong>, as there are some taxes that need to be paid in order to formalise the transaction for you to become the <strong>legitimate owner <\/strong>of the property.&nbsp;<\/p>\n\n\n\n<p>How much should you <strong>save <\/strong>to buy a house? If you\u2019re thinking of buying a property, the first thing you should do (besides choosing the property) is to find out what <strong>taxes<\/strong> are charged by the <strong>Autonomous Community<\/strong> where you are buying the property, as these may vary. Now then, the other costs include:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Property appraisal.<\/strong> This document must be issued by a <strong>certified professional <\/strong>with the purpose of ascertaining the real value of the property. This is necessary, not only so that you know if what the seller is asking is fair, but it is one of the requirements when taking out a mortgage. It is only mandatory if you\u2019re going to apply for a mortgage. In these cases, it must be an ECO appraisal paid for by the client who can choose the appraiser he\/she deems fit.&nbsp;<\/li><li>The <a href=\"https:\/\/aq-acentor.com\/contrato-de-arras-todo-lo-que-debes-saber\/\"><strong>earnest money contract<\/strong><\/a>. This <strong>contract <\/strong>is signed prior to the sale in which you will have to pay a <strong>percentage<\/strong> of the price of the home (which is discounted at the end). This is a purchase <strong>guarantee<\/strong> because, if the buyer fails to comply with them and withdraws from the sale, the earnest money is forfeited. If the <strong>seller <\/strong>waives their right to sell the house, then they will have to return the earnest money <strong>multiplied by two<\/strong>. This depends, of course, on the type of earnest money contract to be signed: <strong>penitential, penal and confirmatory<\/strong>. This is an agreement between private parties and is not required (although it is very common).<\/li><li>Issuance of <strong>deeds<\/strong>. When you buy a property, you must formalise your purchase with the deeds. The deeds, which are <strong>notarised<\/strong>, are the <strong>documents<\/strong> that prove that the house is yours.<\/li><li>Payment to the <strong>Land Registry.<\/strong> Having the deeds is not enough, they must be <strong>registered<\/strong>. In other words, the Government must know that you are the new owner of a property.&nbsp;<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Taxes on the purchase of a property<\/h2>\n\n\n\n<p>As well as the aforementioned costs, some<strong> tax obligations <\/strong>arise from the purchase and sale of a property, depending on the Autonomous Community where the property is located.&nbsp;<\/p>\n\n\n\n<p>The amount of tax also depends on the <strong>price of the property<\/strong>, as well as on whether it is a <strong>new build<\/strong> or <strong>second occupancy<\/strong> (second hand). When the property is a new build (you acquire it directly from a construction group as part of a project), then the most significant amount to be paid will be <strong>VAT.<\/strong> In 2022, VAT on property purchases amounts to <strong>10% of the value of the property<\/strong>. How to calculate VAT when purchasing a new property? If an apartment costs \u20ac150,000, the VAT will be \u20ac15,000.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/lh6.googleusercontent.com\/1c-j06Nx1QY06brp492P9c9fSiaBCCPyr5y_UTmRgg0AgNWw42dPd9FDS78QqQUf_bg9XPTEPS2GXViBaFmZFYfMtWOaAecF50Mh5MlevH5_QhWaswb8O5t-Oot01jY2KTIM_Vyc_L1M0CkOww\" alt=\"\"\/><\/figure>\n\n\n\n<p>However, take note, because in the <strong>Canary Islands<\/strong> a different tax is applied, so it is very important to state <strong>where the property is located<\/strong>. In the Canary Islands, the <strong>Canary Islands General Indirect Tax or IGIC<\/strong> is applied, which is equivalent to 6.5% of the value of the house. However, when social housing is purchased, the VAT rate will be 4%.&nbsp;<\/p>\n\n\n\n<p>What other taxes are paid on property purchases? As well as VAT, there is <strong>Stamp Duty Tax (IAJD)<\/strong>, which is usually somewhere between 0.4% and 1.5% of the value of the property. It varies from one Autonomous Community to another.&nbsp;<\/p>\n\n\n\n<p>One of the taxes you\u2019ll have to take into account when buying a <strong>second-hand house<\/strong> is the ITP or<strong> Transfer Tax (Impuesto sobre Transmisiones Patrimoniales).<\/strong> When you buy a second-hand property, it already has an owner who must transfer <strong>full ownership<\/strong> of the property to you. The value of the ITP varies depending on the percentage that is applied to the price of the deed, as well as the Autonomous Community. It is usually somewhere between 6% and 10%.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">The case for reduced taxes for buying a home<\/h3>\n\n\n\n<p>In some cases, there are<strong> tax reductions<\/strong>. These reductions apply when the property purchased is a <strong>subsidised housing unit <\/strong>(VPO), but also when you are registered as a <strong>large family<\/strong>. <strong>Young people<\/strong> and <strong>people with disabilities<\/strong> can also benefit from a reduction in taxes on property purchases. For example, in <strong>Madrid<\/strong>, in 2022 the ITP will be reduced to 4% when the buyer is a large family and provided that the property meets a number of requirements.&nbsp;<\/p>\n\n\n\n<p>In <strong>Andalusia<\/strong>, in 2022 the ITP applicable is 6% when the property is acquired as a <strong>habitual residence<\/strong> and provided that the property costs no more than \u20ac150,000. If the buyers are victims of gender violence, terrorism or if they are <strong>under 35 years old<\/strong>, then the ITP will be 3.5%. The same applies to those buying property in depopulated areas or areas at risk of <strong>depopulation<\/strong>, as well as to people with disabilities.&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Thinking about buying a property but don&#8217;t know what the transaction costs are? Be aware that; not only do you need to pay the amount that the home costs; the transaction includes some taxes that you\u2019ll have to pay, as well other costs. What are they? How to calculate the cost of buying a property?&nbsp; [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":97475,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[548],"tags":[],"class_list":["post-97483","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-real-estate"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.4 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Costs and taxes when buying a home | AQ-Acentor<\/title>\n<meta name=\"description\" content=\"If you\u2019re about to buy a home and you\u2019re unsure about the costs involved, AQ-Acentor explains how to calculate them correctly.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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