Who pays the costs in a second-hand property real estate transaction?
Don’t know who pays the costs in a second-hand property real estate transaction? It’s the classic dilemma between buyer and seller who usually aren’t clear about who is responsible for covering this type of expense. Our attorneys explain it to you in full detail in this post.
Explanation of Who pays the costs in a second-hand property real estate transaction
The costs of purchasing second-hand property, except when the contracting parties have agreed otherwise, the costs of granting the public deed belong to the person selling the property, and those of the first copy and others subsequent to the sale belong to the buyer. The costs of granting the public deed are those relating to the original deed which is the most expensive cost. Once we know who pays the costs in a second-hand property real estate transaction, let’s detail what those costs are.
Real estate transaction costs
There are various costs in the real estate transaction of a property which we will detail below.
The Notary
This is a cost that must be taken into account when buying a house. These fees are regulated by the State and all charge the same for identical service. These costs will depend on the price of the property – the higher the value of the property, the higher the fees will be.
The Property Registry
The Property Registry must also be taken into account, as it also has an economic value to register the Deeds that have been signed by the notary. These fees are also set by regulation and will depend, in the same way, on the price of the property.
Taxes related to real estate transactions
The property buyer must have an extra cushion for taxes, although the amount will depend on the property price and whether it is new or second-hand. Regarding taxes for a second-hand property, the most important is the Property Transfer Tax (ITP), which is a percentage applied to the deed price and varies by Autonomous Community where the property is located, although generally this tax rate ranges between 6 and 10%
Administrative services
This is an optional expense in the property real estate transaction. Independent professionals do not have a specific rate and are usually hired only when a mortgage is opened for property rental; their approximate cost may be around the documented amount
Property real estate transactions: who is responsible for the IBI tax?
Regarding the following expenses with completion of the real estate transaction contract, if nothing has been agreed, it is understood that the buyer will be responsible for expenses derived from registration in the Property Registry and payment of Property Transfer Tax or Value Added Tax, depending on whether it is a second-hand purchase and sale or a new residence purchase and sale from the Developer.
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