What is the final cost of buying an apartment for sale in Madrid ?
How much money will you need to complete the purchase of this apartment ? Did you include commissions, legal and administrative fees as well as taxes ?
As a relocation entrepreneur working on the buyer’s side, I will give you the facts simply and clearly:
add minimum 7-10 % on top of the purchase price
There are 3 kinds of costs when buying an apartment in Madrid:
- taxes for the purchase,
- legal and administrative fees,
- real estate & relocation services.
1. Taxes: 6 – 10 %
around 11 % in total for a new build apartment, 6 % for second hand apartment in Madrid
This is mainly for VAT: 10 % for new build, or ITP, its equivalent for second hand, 6% in Madrid only, the lowest in Spain (7-8% in other regions) starting in 2014.
Then there is a stamp tax (IAJD, Impuestos de Actos Juridicos Documentados) to cover the legal work to be done by the local government for the apartment and the credit: between 0,4 and 1%. This tax also will be reduced in 2014 by 25% to between 0,3 to 0,7 %
2. Legal and Administrative: 2000 to 4500 €,
This covers the work to be done by (decreasing order of budget spent):
- the “gestoría”, or accounting and administrative office: 1000 – 2000 €
- the notary: 800 – 1500 €
- the lawyer: 200 – 800 € (not mandatory but very strongly recommended).
- the surveyor: 300 – 500 € (optional, usually requested by your bank).
In a nutshell, the tasks they have to complete are:
- obtaining you the NIE quickly, required Spanish identification to be the owner of an apartment in Madrid,
- checking the legal background and eventually estimating the real value of the apartment for sale,
- reviewing the offer and sales contract for the sale of the apartment,
- conducting the legal and administrative procedures to officialize the purchase of the apartment,
3. Real Estate & Relocation Services: 3-6%
For the most important purchase of your life, in a new country, I strongly recommend you request the support of a professional you trust, whoever that is.
Disclosure: Moving2Madrid is the only relocation company proposing a simple all-inclusive package for expats moving to Madrid, including real estate, relocation logistics and integration support throughout your stay. More about us here.
You have 2 kinds of real estate professionals in the end: those who work for you and those who don’t.
If you go to typical rela estate agency, you have to be aware that they work for the landlord. Even if they charge you a commission, they work for the landlord and will only show you their own portofolio. Nothing from other agencies, or from individual landlords. You’re missing 90% of the market. Most of these agencies charge the seller, but 20% charge both sellers and buyers (Tecnocasa, Redpiso).
You then need a buyer’s agent, who will be on your side, exhaust the market, make sure you get the best price, with a certified lawyer with whom he partners to make sure all legal aspects are covered for one of the biggest purchase of your life. Moving2Madrid is the only independent property hunter in Madrid for expats, specialized in helping buyers get the most out of the purchase, and refusing to have any portfolio to stay independent.
If you need help to move to Madrid zen, do not hesitate to send us an email !