There is a misconception about the mortgages given by the banks and it is that in most cases we tend to think that the bank will fully finance the whole amount. This is not true, as banks rarely give 100% of the amount requested and therefore you will have to save to make the purchase. And not only for that, since when buying a house there will be more expenses that we will have to cover although they are not in the final price.
What we must bear in mind is that we will not have to save the same amount buying a new house or, on the contrary, a second-hand one.
How much do you need to save to buy a new house?
There are different expenses that we have to cover depending on the autonomous community in which we are going to buy the house. Therefore there are no exact figures.
For the purchase of a property, we will always need a notary and a registrar (in the case of auctions the figure of the notary is suppressed) and then we will have to do other formalities on our own or with the help of an agency.
If the property is newly built, we will have to pay VAT (value added tax), which in mainland Spain will be 10% and in the Canary Islands 6.5%. This tax will be the only one that has the same cost in all provinces except the Canary Islands.
We will also have to pay the stamp duty, the amount of which will depend on the Autonomous Community where we buy the property. Later, we will have to register the purchased property in the Registro de Propiedad.
In conclusion, the initial cost of a newly built property can vary between 7 and 12% of the final price.
How much do you need to save to buy a second-hand home?
In the case of second-hand properties, instead of having to pay VAT, we will have to pay ITP (Impuesto de Transmisiones Patrimoniales) because we are acquiring it from a private individual.
The stamp duty, registration and notary fees will be the same as in the case of buying a new property.
It is a little cheaper to buy a second hand property, as the ITP varies depending on each Autonomous Community, but the VAT is always 10%.
What changes has the new Mortgage Law brought about for buying a house?
With the modification of the Mortgage Law, the amount of these mortgage expenses has been reduced by a large percentage. When buying a property, you only have to pay for the valuation and the notary, the bank paying the rest. This is a good saving when buying a property.
Finally, when buying a property, there will be those who prioritise expenses, design, location, buying a second-hand house and renovating it (it can be more profitable) or buying a newly