The weather has been amazing lately, so I took a weekend trip to a nearby town and suddenly had the idea of buying a small house there. Far from the hustle and bustle of Madrid or Barcelona, having a small yard of my own to grow flowers and have a dog… it sounds idyllic just thinking about it.
However, acting on impulse can be risky. When it comes to taking action, the first question is: Money
! How much do you actually need for the down payment? I’ve searched all kinds of information online and asked a few friends who have gone through the mortgage process. I’ve finally got it all sorted out and wanted to share it with everyone. Experienced folks are welcome to add to or correct this.
The Down Payment is More Than Just 20% of the Property Price
It’s common knowledge that if you are a resident with a Nota Simple
, banks will typically lend up to 80% of the property price. This means we need to prepare the remaining 20% as a down payment. But please note, this only covers a portion of the price. There are a host of other miscellaneous fees involved in buying a house that aren’t covered by the loan and must be paid out of pocket. Therefore, to be on the safe side, you should budget for about 30%-35% of the property price as your total initial capital.
So, What Are the Additional Costs?
I’ve put together a table based on the process of getting a Spanish property deed, focusing on buying a resale home in Spain, as new builds are less common in small towns. You can use this as a reference, but keep in mind that tax rates can vary between autonomous communities. The example here uses a common percentage:
| Cost Item | Estimated Percentage | Notes |
|---|
| ITP (Property Transfer Tax) | 6% - 10% | This is the biggest expense! It varies by autonomous community. For example, it’s 6% in Madrid and 10% in Catalonia. |
| Notary Fees | 0.2% - 0.5% | Varies based on the property price and number of pages in the deed. |
| Property Registry Fees | 0.1% - 0.25% | To officially register the property in your name. |
| Gestoría/Administrative Support Fees | 300 - 600 Euros | A fixed fee for someone to handle the paperwork and tax filings for you. |
| Valuation Fee (for Mortgage) | 300 - 500 Euros | If you need a mortgage, the bank will require a valuation of the property. |
So, let’s do the math. Suppose you find a small house for 100,000 euros. Besides the 20,000 euro down payment, if the ITP is 8%, that’s another 8,000 euros. Add in notary, registry, administrative, and valuation fees, and you’re looking at roughly another 10,000 euros in total. So, you’ll need to have nearly 30,000 euros ready. See? That’s a lot more than the 20,000 euros you might have initially thought! I hope this post helps those of you who are currently budgeting. Don’t forget to include these ‘hidden’ costs to avoid scrambling at the last minute. Does anyone else have any experience to share?
