The Hidden Costs of Buying a Home: Beyond the Mortgage

The mortgage is not the only major cost associated with buying a home. Of course, there are many costs and fees that must be faced in order to formalize the work and become the owner of the property.
• 1 – Purchase and sale costs
• 2- Mortgage fees

Between the knowledge of the house, the notary, the registry and the corresponding taxes (VAT, ITP …), experts recommend that provision be between 10% and 12%, according to the autonomous communities of Spain, of the price of the house.
These are all mandatory costs that surround buying and selling a house, although the “bill” to be paid depends on whether it is a new or resale house and the amount it is.
We summarize what each one is made of and what the estimated price is in 2022:

1 – Transaction costs of buying and selling
The notary
The notary is a cost to consider when buying a house, whether it is new or resale. Notary fees, called “aranceles”, Payments, are regulated by the State and they all cost the same for identical services.
Regarding the provision of a confirmed act of purchase and sale, the prices are between 600 and 875 euros, depending on the price of the property.
For example, for a 100,000 Euro apartment you would pay around 850 Euros, and for a 250,000 Euro apartment you would have to pay around 1,000 Euros.
Registration of property (Property Register)
Registration of deeds signed by the notary also costs money. Here again, the fees are set by regulation and depend directly on the price of the property, even if they are generally between 400 and 650 euros.
Transaction related fees: Purchase and sale
The buyer must also have an extra mattress to pay taxes, although the amount depends on the price of the house and whether it is new or resale.
Regarding costs and taxes on purchases a new housingthe most important tax is the TVA : (IVA), who in 2021 comes to 10%. In other words, this would mean 10,000 euros in housing costing 100,000 euros and 25,000 in housing costing 250,000 euros.
But to The Canary Islandsit is from 6.5% (this is the IGIC-Canarian General Indirect Tax). In the case of social housing, VAT: (IVA) can be 4%, but it varies according to the autonomous community region of Spain and the type of social housing involved.
A second tax must be added to the VAT: that of Written Legal Acts (IAJD). This fee is always paid by the buyer and is the responsibility of each independent community.
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On the other hand, for real estate resale, the most important tax is the Tax: Asset Transfer Tax (ITP). In this case, the amount depends on the percentage added to the notarized price and the independent community in which the house is located, although as a general rule it is a level between 6% and 10%apply.
However, for large families and young people VPO, Vivienda protection officer (HLM), there are usually lower rates. For example, in Madrid, large families who buy a free house will pay ITP of 4% on the notarized price while the house bought is the normal house. These types currently apply:

It should be noted that for VPOs, large families, disabled people and young people, the rates are generally lower.
For example, in Madrid, large families who buy a free house will pay ITP of 4% on the notarized price, while the house bought is the normal house.
La Gestoria, discretionary charge
The only optional cost to sell a home is the gestoria, the entity the client can hire to process tax payments and do other paperwork. They are free professionals, so in this case there are no special rates, and they are usually only under contract when they open a real estate loan to acquire the property. Estimated cost is 300 euros.
Mortgage costs
If the buyer wants to acquire the new or resale home through a mortgage loan, additional costs should be added to those associated with the Purchase and Sale.
House assessment: Expertise: “Tasacion”
If the buyer wants to apply for a mortgage, they have to pay a “Tasador expert”​​​​to value the property and the bank will know what percentage of financing they can grant.
Usually, banking organizations give a loan equal to 80% of the purchase price or appraised value, although some finance 90-100% of the purchase price, usually looking at the level lowest.
In 2021, knowledge represents a cost between 250 and 600 euros, depending on the entity doing the assessment, the type of property and its valuation. The evaluation is valid for 6 months from the date of issue.
Since the new mortgage law came into force in June 2019, the rest of the costs have been covered by the bank: such as the notary’s fees, the register and the AJD.
Opening commission
This commission can reach up to 2% of the loaned capital or, as agreed by the financial institution. And this amount is taken directly from the money you give to the mortgage.
However, there are many banks that do not use this penalty.
IAJD (Tax on Written Legal Acts)
This fee is paid each time a notarial deed is signed which must then be recorded in the register and with an economic amount.
Since November 2018, a law has come into force which now requires banks to pay this fee.
Notary
Notary fees (fees) are those incurred by executing the public act of mortgage loan. This charge has been accepted by the banking group since June 2019.
Property registration
Registration of deeds signed by the notary also costs money. Again, fees are set by regulation. This charge has been accepted by the banking group since June 2019.
The Management
The bank that gives us the real estate loan is the one that chooses “gestoria” to do the administrative work and complete all the procedures.
This charge has been paid by the banking group since June 2019.
And it is the Gestoria that must return the money remaining on the mortgage and submit the invoices and deeds after paying the notary and registration fees​​​​​​ his financial entity accepts it. We still remember that the AJD is paid by the bank.