Associated fees in buying a house. High quote?

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dingobingo
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Associated fees in buying a house. High quote?

Postby dingobingo » Mon Mar 25, 2019 5:16 pm

Hola todos

RE fees associated with buying a house. For a €90k house I've been quoted (by mortgage broker) associated fees ( Notary, Land Registry, Appraisal, Home Insurance, Life Insurance, Opening Commission, Mortgage broker fees) of about €10k.

Seems a little high to me. Any thoughts? Thanks

Edit - this excludes the purchase tax of 10% of value as a foreign buyer over 36 years old
Last edited by dingobingo on Tue Mar 26, 2019 9:09 am, edited 1 time in total.

Evelyn
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Re: Associated fees in buying a house. High quote?

Postby Evelyn » Mon Mar 25, 2019 6:36 pm

Sounds about right to me.

elusive
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Re: Associated fees in buying a house. High quote?

Postby elusive » Mon Mar 25, 2019 8:24 pm

They tend to say add 10% so give or take thats pretty normal i guess

Beachcomber
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Re: Associated fees in buying a house. High quote?

Postby Beachcomber » Mon Mar 25, 2019 8:59 pm

Do you know if the quote includes the transfer tax? You haven't actually mentioned it ín the list of expenses.

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costakid
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Re: Associated fees in buying a house. High quote?

Postby costakid » Mon Mar 25, 2019 9:14 pm

That is the normal percentage.

dingobingo
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Re: Associated fees in buying a house. High quote?

Postby dingobingo » Tue Mar 26, 2019 7:59 am

This is excluding the 10% tax I need to pay as a foreign buyer. Is this the same as 'transfer tax'?

Thanks for your input folks.

Beachcomber
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Re: Associated fees in buying a house. High quote?

Postby Beachcomber » Tue Mar 26, 2019 11:14 am

The transfer tax applies to all purchasers, foreigners and Spanish alike and is 8% for a property of that value except for first time resident purchasers under 35. There is no extra tax for a 'foreign buyer'. Most of those fees you quote, except for the notary and the registration, are associated with the mortgage. It sounds as though someone is taking you for a ride.

I assume you are aware that by the time you have paid off the mortgage you will have paid out virtually double the actual value of the property so you will never recover your outlay and a mortgage from a Spanish bank is far more of a noose around your neck than from one in the UK.

dingobingo
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Re: Associated fees in buying a house. High quote?

Postby dingobingo » Tue Mar 26, 2019 3:16 pm

Thanks all.

To clarify...

For a €90k purchase I have been told to prepare €44k in total after getting a 70% mortgage.

€26k for the deposit
€9k for the purchase tax which is 10% for a non-resident
€9k remainder for transfer tax, land registration, mortgage fees, broker fees, surveys etc

Is that €9k 'purchase' tax a load of BS and something I ought to push back on?

Thanks

Beachcomber
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Re: Associated fees in buying a house. High quote?

Postby Beachcomber » Tue Mar 26, 2019 3:59 pm

The tax you pay is transfer tax (unless you are buying a brand new property from a developer in which case you pay IVA at 10%). In Spanish it is called 'Impuesto sobre Transmisiones Patrimoniales y Actos Jurídicos Documentados' and the tax is the same for residents and non-residents at 8% up to a value of €400.000,00. It may be mistranslated as 'purchase tax' but you certainly do not pay both. Actos Juridicos will be payable on the mortgage escritura at around 1,5%.

There is no additional tax for non-residents.

This are a couple of links to third party web sites so the usual caveats apply but they do seem to be up to date and accurate:

https://www.spanishestate.com/resources/costs

http://bravolegal.es/costs-buying-property-spain/

Also search for 'fees and taxes on property purchase in Spain'

dingobingo
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Re: Associated fees in buying a house. High quote?

Postby dingobingo » Tue Mar 26, 2019 4:24 pm

Thank you very much.

I'm going to investigate further, otherwise I may be over paying by 8/9k !

About the mortgage being a noose - sounds like they don't accept early repayment or anything like that? I was shocked that they would fix the rate for 30 years. That's incredible. But maybe it also means heavy early repayment charges too?

Beachcomber
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Re: Associated fees in buying a house. High quote?

Postby Beachcomber » Tue Mar 26, 2019 4:50 pm

I thought the maximum period was fifteen years but I am not sure because I have always been able to avoid having a mortgage. Once the mortgage is paid off you have to go to the notary again (for another fee) and cancel it.

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Re: Associated fees in buying a house. High quote?

Postby Miro » Tue Mar 26, 2019 5:46 pm

I hate to put a further downer on things, but continuing the theme of:
Beachcomber wrote:...you will never recover your outlay...
; I wonder if you are aware of the costs incurred when selling a property in Spain? I know very few people think about that aspect, but I believe it's quite important. I hear so often phrases such "investment" and "my pension" in relation to Spanish property purchases.... :?
Don't worry about what people think, they don't do it very often

"Acquiring a dog may be the only opportunity a human ever has to choose a relative," Mordecai Siegal 1935-2010.

dingobingo
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Re: Associated fees in buying a house. High quote?

Postby dingobingo » Wed Mar 27, 2019 4:55 am

Thanks for the advice about the negative aspects. But this would be a long term family home with no intention to sell at all. Neither an investment or a pension, I have UK property for that ;)

After querying the mortgage broker the fees have come down by 4k with the remaining discrepancy being mandatory life insurance for 6 years for €2400. Is life insurance mandatory when buying a house? Perhaps it's a condition of that bank. She also doesn't seem to want to work with me any more. Coincidence ! :D

Beachcomber
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Re: Associated fees in buying a house. High quote?

Postby Beachcomber » Wed Mar 27, 2019 7:26 am

Life insurance is to satisfy a requirement of the mortgage. Spanish life insurance is expensive and worthless. You do not need it for a non-mortgage purchase.

The most important thing is that there is NO additional 10% 'non-resident' tax on buying a property just the 8% transfer tax and around 1,5% tax on legal documents (actos jurídicos) for the mortgage although there is an annual non-resident tax of which you will have seen mention in other threads within this forum.

You have probably asked too many awkward questions to be any further value as a gullible client. If you absolutely must have a mortgage why not deal directly with the bank?

elusive
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Re: Associated fees in buying a house. High quote?

Postby elusive » Wed Mar 27, 2019 9:04 am

Thanks for the advice about the negative aspects. But this would be a long term family home with no intention to sell at all. Neither an investment or a pension, I have UK property for that
Remember the capital gains tax on the uk property if you plan to sell it while been a spanish resident. It will be incredibly hefty even on a less than average uk house price if you plan to own it for a substantial amount of time

dingobingo
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Re: Associated fees in buying a house. High quote?

Postby dingobingo » Wed Mar 27, 2019 9:46 am

Also not too concerned about the CGT, I'd use the rental income.

Yes, my agent has suggested we use another broker :) Thanks again

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Re: Associated fees in buying a house. High quote?

Postby Manchesteral » Sun May 12, 2019 11:49 am

As I am currently pondering the possibility of actually buying a property in Spain could Sid, Beach or anyone else give me a ballpark figure of the total bill, ie, suppose I buy a small townhouse for an agreed sum of €100000,00 no mortgage required, what would be the total cost and a basic breakdown of charges, also will I be taxed on the transfer of this sum from an English bank ?

I haven't made any official enquiries about this as I am only thinking about it at the moment, thanks, Al :-)

bobdun
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Re: Associated fees in buying a house. High quote?

Postby bobdun » Sun May 12, 2019 1:16 pm

dingobingo wrote:Thank you very much.

I'm going to investigate further, otherwise I may be over paying by 8/9k !

About the mortgage being a noose - sounds like they don't accept early repayment or anything like that? I was shocked that they would fix the rate for 30 years. That's incredible. But maybe it also means heavy early repayment charges too?
You can repay a Spanish mortgage early but it's not quite the same as UK. I did just that took out a mortgage and paid it off after 3 years. They charge a % figure for paying amounts off. However if you pay the whole off balance off early they charge a slightly higher %! I was advised by the lady at the bank to pay off all but say 2 months repayments off that way less % and then just leave the last 2 payments as normal and the mortgage then naturally finished so no extra charge. Worked for me and saved me quite a bit. Also as has been mentioned unlike UK whereby at end of mortgage you get a letter saying bank or whoever mortgage was with hold no further interest in property. In Spain you have to get that done by either bank, gestor or solicitor, when I did it cost varied between 800 euros to 1300 depending who did it. I never had to actually attend notary for this it was done for me but after that you end up with an additional escrutiria proving you own it outright. Important if you use property to obtain residencia or sell etc as you need to prove with nota simple that you do own outright!


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