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If the property is a new build the costs involved will be:

1. Bank opening mortgage fee (around 1%-1.50 % of the mortgage amount).
2. VAT 10%. (Impuesto sobre el valor añadido/ IVA).
3. Stamp duty (Impuesto de Actos Jurídicos Documentados) 1.5% of the price of the property. Only to be paid in property subject to VAT payments (new properties).
4. Stamp duty (Impuesto de Actos Jurídicos Documentados) 1.5% of the mortgage responsibility amount.
5. Notary and Registry on the mortgage: These fees vary depending on the guaranteed capital of the mortgage.
6. Notary and Land Register fees on the purchase.
7. Agency ‘Gestoria’ fees. The bank use an agent to make sure the property and the mortgage are inscribed at the land register.
8. Insurance: The banks normally require the borrower to take out insurance to protect its interest until the loan is repaid.

If the property is second hand (Resale) then the costs are the same except that you do not have to pay the Stamp duty (Impuesto de Actos Jurídicos Documentados) at 1.5% of the property price or 10% VAT.

You can refer to this example for the breakdown of the costs of two properties with a sales price of 150,000€ and 250,000€ respectively. You can download the cost breakdown in PDF format and MS Excel Format.