Do you know who pays the costs in the purchase and sale of a second-hand home? This is the classic dilemma between buyer and seller, who often don’t know clearly who is responsible for covering these expenses.
Our attorneys explain it in full detail in this post.
Explanation of Who Pays the Costs in the Purchase and Sale of a Second-Hand Home
The costs of purchasing a second-hand home, unless the parties have agreed otherwise, assign the costs of executing the public deed to the seller of the property, while the costs of the first copy and any subsequent costs following the sale are borne by the buyer.
The costs of executing the public deed refer to those relating to the original deed, which is the most expensive cost.
Now that we know who pays the costs in the purchase and sale of a second-hand home, let us detail what those costs are.
The Costs of the Purchase and Sale
There are various costs involved in the purchase and sale of a property, which we will detail below.
The Notary
This is a cost that must be taken into account when purchasing a home. Notary fees are regulated by the State and all notaries charge the same for identical services; these costs will depend on the price of the property — the higher the value of the property, the higher the fees.
The Land Registry
The Land Registry must also be taken into account, as registering the deeds signed by the notary also carries a financial cost.
These fees are also set by regulation and will likewise depend on the price of the property.
The Taxes Associated with the Purchase and Sale
The buyer of the property must set aside an extra budget for taxes, although the amount will depend on the price of the home and also on whether it is new or second-hand.
Regarding taxes on a second-hand home, the most important is the Property Transfer Tax (ITP). In this case, it is a percentage applied to the deed price and varies by the Autonomous Community where the property is located, although as a general rule this tax rate falls between 6% and 10%.
The Administrative Agency (Gestoría)
This is an optional expense in a property purchase and sale transaction. These are independent professionals with no fixed rate, and they are usually hired only when a mortgage is taken out to purchase a property; their approximate cost can be around €300.
Property Purchases and Sales: Who Is Responsible for the IBI Property Tax?
Regarding the costs following completion of the purchase and sale contract, if nothing has been agreed, it is understood that the buyer will bear the costs arising from registration at the Land Registry and payment of the Property Transfer Tax (ITP) or Value Added Tax (VAT), depending on whether the transaction involves a second-hand purchase and sale or a new-build purchase from the developer.
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