The Total Cost for buying a Property in Barcelona?
This post outlines the Buyer’s TOTAL COST for buying and owning property in Barcelona. As of Oct. 2019, the mortgage bank must pay the closing costs incurred by the mortgage.
A. Property’s Extra Costs
The Buyer must pay an additional 11% to 15% of the property’s purchase price for extra costs. These costs are paid when the Buyer signs the deed. They include:
- 10% Conveyance Tax (ITP). This is a 10% tax on the property’s purchase price. It’s paid to Catalonia. The % varies depending on the Spanish province where the property is located. If you’re 32 or younger, earn less than 30k per year and meet other requirements, it’s 5%.
- Public Notary. A property deed is signed before a ‘Public Notary’. These are Spanish-trained lawyers qualified to verify public documents. They charge from 1000€ to 2000€ per deed.
- Registry Fee. Deeds are registered with the government’s Land Registry Office or Registro. They charge from 400€ to 750€ per deed.
- Gestor. They pay the 10% tax, file the deed with the Registro and other related services. They charge from 400€ to 750€ per deed.
Here is an example. A flat that costs 300,000€ will entail about 32,200€ in extra costs as itemized below. These numbers are estimates.
- 10% Tax: 30,000€
- Notary: 1,200€
- Registry: 500€
- Gestor: 500€
- Total: 32,200€
- Total Price of the Property: 332,200€
B. Buying property in with a mortgage in Barcelona
A mortgage requires a second tax and a second deed. As of Oct. 2019, these costs are paid by the Buyer’s mortgage bank. The buyer must pay for an assessment of the property and any fees the bank may impose for granting the mortgage.
Costs related to Owning Property
If the Buyer lives in the property purchased, these are the costs of ownership:
- City Property Tax (IBI). It’s app. 1.5% of the property’s assessed tax value. The assessed value is from 20% to 75% of the sale’s price. It depends on the date of the last assessment.
- Property Insurance. This depends on the propery’s size and whether you insure the contents as well. Est. 350€/year.
- Community Fees. This is for building maintenance and repairs. It varies depending on the several factors (whether there’s an elevator, portero, swimming pool, etc.). Est. 1200€ to 2,400€/year.
1) If you buy in the name of a company (SL), or buy a ‘new construction’, the costs may vary from those above.
Thank you for reading and we wish you the best in your property search in the Barcelona area. Feel free to email or call for comments or questions. Mark Carr at +34 664 665 365 or [email protected]
This is a very informative blog, thanks for sharing about the properties total cost. It will help a lot; these types of content should get appreciated. I will bookmark your site; I hope to read more such informative contents in future.
William, Thanks for your message, I’m glad you enjoyed the article. I’ll be publishing more soon.
It is a nice article about three reasons about the property’s total cost. I agree with all your points that you have stated here, love this blog. really appreciative and useful blog for us. Looking for more!!
Joshua, Thanks for your comment. I’m glad you found the article, and the blog, helpful. The Barcelona real esate market is slowly changing due to COVID-19 and the economic recession. No real drops in prices yet, especially in the city center and other high-demand areas; but they predict ther will be drops in the near future. Stay tuned. Mark
Well the major international crisis you correctly warned about has arrived. So all those Brits who rushed to buy in Barcelona before Brexit will soon be nursing big capital losses* and those who bought on mortgages to rent out will be reeling from lack of rental income. I presume there will be some bargains around with distressed sellers looking to cut losses?
*assuming Covid crisis leads to high rates of unemployment, lack of confidence hits buyers, banks unwilling to lend etc etc
Scott, Thanks for the comment. The crisis is here but remember: The Barcelona housing market is completely different from the rest of Spain. In Spain’s rural areas and along the coast property owners will lose rental income, especially from tourism. If they sell now they’ll probably take a loss. There’s a lot of supply. The best they can do is wait it out as the crisis in Spain appears to be lifting. In Barcelona city center, however, supply is limited and demand is almost always constant so I don’t see prices dropping by much; not even rent prices. In the lower-demand regions and towns around Barcelona, they’re likely to fall. Regarding bargains, distressed sellers could be companies that buy, renovate and resale. Some are cash-strapped due to construction delays stemming from COVID-19; so they want to sell now for money to finish other projects. Spanish law protects homeowners with mortgage trouble, and they have nowhere to go, so it’s unlikely they’ll sell. In sum, it’s a great time to be on the market. Keep an eye on property that needs work as some investors over-bought and want to dump part of their inventory. For the long-term, the crisis in Europe has ebbed as people cooperate with the government; the US, however, is another story. The relationship between government and population is more hostile led by an inexperienced, impulsive president. So the virus could be around a while.
Is BCN in general considered a good rental market for investors? Are things expected to improve? Why are there so many British people purchasing property in BCN at this moment?
Is BCN in general considered a good rental market for investors? It depends. If you’re a Spanish resident it’s better. They pay a tax of app 20% of the net rental income and is reported on their annual Spanish income tax form. Spanish non-residents pay a tax of 24% of the gross rental income declared and paid every three months. So it’s for them to earn money. You have to buy cheap and fix the property up, then put it out for rent. Rents are going up in BCN as demand for housing is very strong.
Are things expected to improve? Because of high demand and limited supply, I think housing and rental prices will continue to increase.
Why are there so many British people purchasing property in BCN at this moment? Demand from UK citizens is constant in BCN for several reasons:
1) Brexit. Many people from the UK want to gain Spanish residency before Brexit in case the new Brexit rules make it harder, or impossible, to do so. No one knows what might happen.
2) Climate. BCN has a sunny climate, it’s near the sea, easy to get around, etc.
I think it’s a good time to buy as prices will continue their upward trend unless there is a major international crisis such as in 2008.