Finding the perfect house is complicated and when you finally find it, you will have to consider that the purchase is a big investment as you will not only have to pay the purchase price, but you will also have to pay the corresponding expenses and taxes. Below, we tell you how much the title deeds of a house cost, so that you can do your calculations and know how much money you will need.
What is the deed of sale of a house?
The first thing you should know is that the deeds of sale of a house are documents that are granted before a notary to formalise the sale. On the one hand, the notary certifies that the sale and purchase has been carried out and guarantees the legal security of the operation by signing the document together with the buyer and the seller. In addition, the deed of sale can be registered in the Land Registry, which gives publicity to the transaction with regard to third parties.
Learn how to calculate how much the deeds to a home cost
First of all, in order to know how much the title deeds of a house cost, it is necessary to know several important aspects:
Several expenses are derived from the deed of a house, which are the following:
– Fees of the notary involved in the sale and purchase. Notary fees are regulated in Royal Decree 1426/89 of 17 November. These fees are the same for all notaries, who may, however, give discounts to their clients. Several elements are taken into account in the notary’s fees:
– Amount of the transaction. The price of the transaction will influence the calculation of the notary’s fees. For example, for a purchase and sale of a property of 200,000 euros with a subrogation in a mortgage loan of 150,000 euros, the approximate cost of the notary would be 613.30 euros.
FEE NO. FEE CONCEPT AMOUNT
2,00 Purchase and sale of property 255,39 €.
2,00 Loan 178,11 €.
7,00 Folios de matriz 36,06 € 36,06
4,10 Authorised copy 30,05 € 30,05
4,20 Simple copy € 6,01
VAT. 106,18 €
Stamp 1,50 € 1,50
Total € 613,30
Source: OCU calculator.
The number of pages of the deed.
The length of the deed will influence the price. In the case we have seen, we assume that the deed has 20 pages.
– Copies of the deed that are requested. Depending on each case, simple copies or authorised copies of the deed of sale will be required, which have a different price, as shown in the table.
– Property registrar’s fees. The fees of the land registrars are regulated in Royal Decree 1427/89 of 17 November. In the example we have seen, for the sale and purchase of 200,000 euros, they would amount to 268.51 euros. Thus, this is the table with the breakdown:
Nº FEE CONCEPT AMOUNT
1,00 Filing fee 6,01 €.
2,00 Purchase and sale of property 126,04 €.
2,00 Purchase and sale of garage 0,00 € 0,00 € 2,00
2,00 Purchase and sale of storage room 0,00 € 0,00 € 2,00
2,00 Loan 86,86 € 86,86
3,30 Taxation note 3,00 € 3,00 € 3,00
VAT. 46,60 €
Total 268,51 € 268,51
Consultancy fees.
Generally, in order to carry out the formalities of paying taxes and registering the deed of sale in the land registry, the services of a gestoría are usually contracted. It is also important to ask how much they charge before contracting and to compare various options.
– Mortgage costs. If you apply for a mortgage to finance the purchase, you may have to pay expenses such as the appraisal or the opening commission, among others. Check with the bank and find out all the costs you have to pay.
– Expenses and taxes related to the ownership of the property:
– Community fees. When you become the new owner of the property, you will have to pay the ordinary and extraordinary community fees.
– Expenses for change of ownership of utilities. You will have to change the property’s utilities (water, electricity and gas) to your name. It should be borne in mind that this may involve additional expenses due to the processing by the corresponding company.
– IBI. The IBI is paid by the new owner on the first of January of each year, so you will have to pay it. It can also be agreed in the deed of sale that the IBI corresponding to the year of the sale is prorated between buyer and seller.
Along with the sale and purchase costs and other expenses, various taxes must be paid, which are as follows:
– VAT. If the property is a new building, VAT is payable at the rate of 10%. On the other hand, if it is a social housing, the rate will be reduced to 4%.
– ITP (Property Transfer Tax). In the case of a second-hand property, the ITP (Impuesto de Transmisiones Patrimoniales) must be paid, which varies from one autonomous community to another between 6% and 10%. In Barcelona the rate of 10% is applied if the property does not exceed 1,000,000 euros.
– AJD (Actos Jurídicos Documentados). It is payable in certain cases, for example, when a new home is purchased and a mortgage is taken out on the property. Specifically, the amount varies between 0.5% and 2% (Catalonia).
Approximately, it can be said that, between expenses and taxes, if you ask yourself how much the title deeds of a house cost, you will have to add between 10% and 12% of the purchase price.
How to save costs when buying and selling a property?
There are several ways to save on costs and taxes when buying or selling a property. We propose several considerations:
– Allowances and deductions in the ITP. In the ITP, there are various bonuses and deductions regulated in each autonomous community. For their part, these are applied in cases such as large families, those under 35 years of age or the purchase and sale of a protected home or primary residence.
– Reduction in notary fees. Although, as we have seen, notaries have established their fees by law, they can apply a discount on their fee invoices. In order to achieve this, you can consult the fees of several notaries and compare them.
– Save on agency fees. The intervention of the gestoría is not compulsory, so if you want to save money you can do the paperwork that the gestoría would do yourself. Basically: payment of taxes and presentation of the deed of sale at the land registry.
– Reduce mortgage costs. If you do not need financing you will save all the costs associated with the mortgage. However, if you do need it, you can hire the services of an intermediary entity in the mortgage sector that negotiates the conditions with several banks and charges the bank directly.
– Negotiate the purchase price. On the other hand, another important aspect is to analyse the purchase price, if you are a buyer, and compare it with the prices of similar properties in the area. In fact, negotiating the
– Agree on the payment of the sale and purchase costs. Article 531.6 of the Catalan Civil Code establishes the following regarding the costs of the sale:
The costs of delivery of the transferred property shall be borne by the transferors. The costs of the execution of the deed and the issuing of the first copy and other costs subsequent to the transfer shall be borne by the purchasers, unless a special provision or an agreement establishes otherwise.
Therefore, unless otherwise agreed, the costs of the deed and the first copy as well as the costs after the sale are borne by the purchaser.
In short, before buying a property you should be very clear about how much the title deeds of a house cost and evaluate all the aspects with the help of experts in the real estate market who will advise you on the taxes and expenses to be paid and the best way to save.
Is it possible to sell an inherited
inherited house without registering it?
