The mortgage is not the only expense that comes with buying a home. In fact, there are a few other expenses and taxes that must be faced to formalize the operation and become the owner of a property.
Between the appraisal of the house, the notary, the registration fee and the corresponding taxes, it is recommended to have savings of between 10% and 12% of the price of the house. All of them are mandatory expenses that revolve around the purchase of a home, although the “bill” to be paid will depend on whether it is a new or used house and on the sales price. We summarize what each one consists of and what its approximate amount is in 2021.
An expense to take into account when buying a house, both new and used, is the notary. Notaries’ fees are regulated by the government and all charge the same for identical services. In the case of the execution of the public deed of sale, the prices are between 600 and 875 euros, depending on the price of the property. For example, for a flat of 100,000 euros you would pay approximately 850 euros, while for one of 250,000 euros you would have to pay about 1,000 euros.
It also costs money to inscribe the property registration signed by the notary. Again, the fees are set by regulations and depend directly on the price of the property, although they are usually between 400 and 650 euros.
A home buyer must also set some money aside to pay taxes, although the amount will depend on the price of the home and whether it is new or second-hand.
Regarding the expenses and tax on the purchase of a new home, the most important tax is VAT, which in 2021 amounts to 10%. That is, it would mean 10,000 euros in the case of a 100,000-euro home and 25,000 for a 250,000-euro home.
A second tax must be added to the VAT: that of Documented Legal Acts (IAJD). This tax is paid by the buyer and in Andalucia is 1.5%.
On the other hand, for used homes the most important tax is the Tax on Patrimonial Transmissions (ITP). In this case, the amount depends on the percentage that is applied on the registered price and on the autonomous community in which the house is located. In Andalucia this percentage is 8%.
An expense to take into account when buying a house, both new and used, is the notary. Notaries’ fees are regulated by the government and all charge the same for identical services. In the case of the execution of the public deed of sale, the prices are between 600 and 875 euros, depending on the price of the property. For example, for a flat of 100,000 euros you would pay approximately 850 euros, while for one of 250,000 euros you would have to pay about 1,000 euros.
If the buyer is going to acquire the new or used home through a mortgage loan, some additional expenses would have to be added to those associated with the purchase.
If the buyer is going to apply for a mortgage, he must pay an appraiser to value the property and for the bank to know what percentage of financing it can grant. In general, entities are lending an amount equivalent to 80% of the purchase price or the appraisal value, although for a second home this is usually 70%. In 2020, the appraisal involves a cost of between 250 and 600 euros, depending on the entity that carries out the appraisal, the type of property and its valuation.
The appraisal is valid for 6 months from the date of issue
Since the entry of the new Mortgage Law in June 2019, the rest of the expenses are assumed by the bank: such as the notary, the registry and the AJD.
This commission can reach up to 2% of the borrowed capital, as agreed with the financial institution. And this amount is deducted directly from the money you give to the mortgaged. However, there are many banks that do not apply this fee.
Source: Idealista.com
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