As a general rule add roughly 10 to 12% to your purchase price to cover all your closing costs and taxes. These breakdown as:

VAT (IVA) applies to new bespoke properties and is currently 7% of construction and 16% of land, payable in stages. From 1st July 2010 the rate of IVA will increase from 7% to 8% on construction and 16% to 18% on plots.

Transfer tax (ITP) applies to “re-sale” purchases and is payable on completion.

The rate of transfer tax (ITP) is as follows:

Apartments/villas of a value not exceeding €400.000 - 7%

Apartments/villas of a value greater than €400.000 – 7% on the first €400.000
and 8% thereafter

Stamp duty (AJD) is only payable on the purchase of off-plan properties and is currently 1%, regardless of the value of the property and is payable on completion. The rate of AJD will not increase in 2010

Plus Valía This is a modest one-off tax levied by the town hall and relates to the increase in value of the land since its previous sale.

For most purchases this tax will amount to only a few hundred euros and is normally payable by the vendor on completion.

Solicitors Fees Nearly all our client's ask us to recommend a solicitor. One such company recommended by many Monte Pego clients is Baily Gibson 01494 672661   susanad@bailygibson.co.uk. Baily Gibson have handled hundreds of transactions in Monte Pego to the extent that they are able to give Monte Pego clients flat fees for new villas purchases of £1,800. This includes the drawing up of wills and the power of attorney. Resale’s cost £1,900. We receive no commissions for recommending them.

Notary, Land Registry and Gestoría Fees These are the fees associated with the witnessing and subsequent registration of your title deeds.

Notary fees range vary to a scale fixed by law of between €300 to €1.500.

Land Registry fees are generally about 20% less than the Notary’s fees.

Gestorías are official intermediaries between individuals and government bodies such as: the tax office and the land registry. Their fees are normally around €350 plus VAT, which from 1st July 2010 will be 18%.

The above approximates to adding around 10 to 12% to your purchase price to cover all your closing costs and taxes.