Extremadura is one of the 17 autonomous regions in Spain and is generally not yet well known to Belgians and Dutch people. However, we have been receiving several enquiries about buying a house in Extremadura since this year. In this article, you will find more information about the cost of buying a property in Extremadura.
Transfer tax on a property in resale
If you wish to invest in a property in resale, you will incur registration fees (ITP) have to pay. The progressive rates are 8% up to EUR360,000, 10% from EUR360,001 to EUR600,000 and 11% from EUR600,000.
In addition, there are reduced rates. For example, consider the rate of 7% for the purchase of the family home with a total value of less than EUR 122,000. Or the rate of 6% for the purchase of property for operating a commercial activity. There is also a conditional rate of 4% for the purchase of a property in certain villages with a population of less than 3,000.
Transfer taxes on a new build
If you buy a new-build property, you will pay VAT 10% additionally on the purchase price. In Spain, there is no split between the purchase price of the land and the purchase price of the building. You pay VAT on the entire purchase price. So there are no registration fees to pay. In addition, you pay an additional stamp duty (AJD) of 1.5% on the purchase price excluding VAT.
An example. You buy a new building of EUR 200,000. The VAT is then EUR 20,000. Stamp duty comes to EUR 3,000. Total transfer taxes then come to EUR 23,000.
Notary and registration fees
Notary and registration fees in Spain are not calculated based on the purchase price. So there is no substantial difference for a purchase of, say, EUR 100,000 and EUR 250,000. For the notary and registration fees, calculate around EUR 2,000. However, the duties of a Spanish notary are limited. They do not represent your interests.
Read more about the duties of a notary in Spain.
Purchase assistance
Because of the limited function of the Spanish notary, guidance when buying a house in Extremadura is appropriate. Typically, the fees are 1% of the purchase price + VAT.
Find more information on purchase assistance here.
NIE number
An NIE number is a tax identification number for non-residents. For example, you need an NIE number to pay your transfer taxes or enter into utility contracts. The cost is just under 10 euros per person.
How can you apply for a NIE number?
Notarised power of attorney
It is often advisable to work with a notarised power of attorney. With a notarised power of attorney, the whole purchase can be handled without having to travel to Spain. A power of attorney costs around 500 euros per power of attorney. This cost is therefore independent of the number of buyers.
Are you going to buy a house in Extremadura? Then feel free to take contact on. We can provide you with a detailed breakdown of purchase costs without obligation.
