Whether you are buying or selling a home, there are certain technical and legal aspects that must be considered beforehand in order to complete the real estate transaction successfully. This is where deed registration costs come into play. Want to know what they are and who is responsible for paying them? Here is everything you need to know.
What are deed registration costs?
Deed registration costs are legal procedures required when buying or selling a property. It is important to know that these expenses can increase the total cost of the transaction by around 10–15%.
These costs typically include:
- Notary fees: preparation of the public deed of the property
- Property Registry: registration of the property
- Taxes: which vary depending on the type of property
- Municipal capital gains tax (Plusvalía municipal): a local tax that applies to properties located on urban land
Below you will find which of these expenses are usually paid by the buyer and which by the seller, along with a brief explanation of each.
Who pays these costs?
In general, most deed registration costs are paid by the buyer, although the parties involved in the transaction may agree to distribute them differently.
Below is a breakdown according to each party’s responsibilities.
I am buying a property — what deed costs do I have to pay?
As mentioned earlier, the buyer usually assumes most of the deed-related expenses, which may increase the total purchase cost by 10–15%.
The first expense is the notary fee, since the notary must issue the public deed of the transaction. These fees are regulated by law and vary depending on the price of the property.
Another expense the buyer must cover is the Property Registry fee, which is established by the State and also varies according to the property value and location.
Regarding taxes, these depend on the type of property purchased:
- VAT (IVA) if the property is newly built (new construction)
- Property Transfer Tax (ITP) if the property is second-hand
Finally, the buyer may also need to pay administrative costs related to transferring ownership of utilities, such as water and electricity contracts.
I am selling a property — what costs do I have to pay?
As the seller, the main deed-related cost you will need to pay is the municipal capital gains tax (Plusvalía municipal).
This urban land value tax is calculated based on the cadastral value of the land, the increase in value over time, and the number of years the seller has owned the property.
In addition to this tax, sellers are also responsible for other expenses such as:
- Property tax (IBI) for the current year
- Original deed expenses
- Personal income tax (IRPF) on any capital gains obtained from the sale
What expenses are associated with deed registration in a property transaction?
When registering the deed of a property purchase, the following main costs can be identified:
Notary fees
These are the fees for the notary’s work in formalizing the deed of sale or mortgage loan.
The cost of preparing the deed is calculated based on the value of the property, and notary fees are regulated according to a government tariff established in 1989.
The final amount may vary depending on factors such as:
- The length of the deed
- The number of copies requested
Although notary tariffs are the same across all notary offices, protected housing (VPO) and mortgage subrogations may involve reduced fees.
For example, when purchasing a property that already has a mortgage, a mortgage subrogation may take place, which involves additional notary fees for formalizing the change. The cost depends on the total mortgage amount and the terms included in the deed.
Taxes
Tax costs depend on whether the property is newly built or second-hand.
For newly built properties, the buyer must pay:
- VAT (IVA): generally 10% of the purchase price (or 4% for protected housing)
- Stamp Duty (IAJD): set by each Autonomous Community and usually between 0.5% and 1.5% of the purchase price
For second-hand properties, the buyer must pay:
- Property Transfer Tax (ITP): typically between 6% and 10%, with possible reductions for protected housing.
Property Registry
Finally, the buyer must pay the Property Registry fees, which cover the cost of registering the purchase transaction in the Property Registry.
Like notary fees, these charges are regulated by law and depend on the total value of the property.
How much do deed registration costs usually amount to?
The total cost of registering a property deed depends on several factors:
- The number of copies of the deed
- The length of the document
- The registration entry
- The value of the property stated in the deed
The type of property also affects the cost, since protected housing (VPO) usually benefits from reduced fees.
Generally speaking, the cost of formalizing the deed at the notary ranges between 0.20% and 0.50% of the property value.
For example, registering the deed of a €200,000 property at the notary would typically cost between €400 and €1,000.
How can these costs be paid?
The notary usually records the payment method used in the transaction. Payment may be made through:
- Cash
- Cheque
- Bank cheque
- Transfer
- Other payment instruments
If a cheque is used, the notary will specify whether it is nominative (payable to a specific person) or bearer.