Which costs of the sale are paid by the buyer and which by the seller?

Question

José Manuel Alburquerque · Accepted Answer

Whatever is agreed in the contract prevails. If nothing is agreed, in Catalonia the buyer pays for the deed of sale at the notary's office, registration at the “Registro de la Propiedad” (the Land Registry) and the tax on the purchase. The seller pays for the documents needed to sell and the “plusvalía municipal”, the municipal capital gains tax. It is also usual for the seller to pay for the discharge of their mortgage, if they have one. In the rest of Spain the rule is different, because the seller pays for the original of the deed. What the buyer pays Unless the contract says otherwise, the Catalan Civil Code makes the buyer responsible for the deed, its first copy and the costs arising after the sale. In practice, the buyer pays for: The deed of sale at the notary's office and its first copy, which is the one submitted to the Land Registry. Registration at the Land Registry and, if the buyer hires one, the agency (“gestoría”) that handles the taxes and the registration. The tax on the purchase, which as far as the tax authorities are concerned is always the buyer's. For a second-hand flat it is property transfer tax (ITP), which in Catalonia is 10 % up to 600.000 euros and rises in bands above that figure. Some buyers qualify for a reduced rate. For a new flat bought from the developer it is VAT and stamp duty (AJD). If the buyer takes out a mortgage, the valuation of the flat and any copies of the loan deed the buyer requests. The notary, Land Registry and agency costs of the mortgage are paid by the bank, which also pays the tax on that deed. What the seller pays The costs of handing over the flat and of the documents the seller needs to sell it, such as the statement of debts from the owners' association (the “comunidad de propietarios”), the certificate of habitability (“cédula de habitabilidad”) and the energy performance certificate. Whatever remains to be paid on the seller's mortgage. The seller usually also pays for the deed discharging it and for its registration. It is advisable to put this in writing in the deposit agreement (“contrato de arras”). The municipal capital gains tax, the town council's tax on the increase in the value of the land, because the law makes the seller liable for it. If the parties agree that the buyer will pay it, the agreement is valid between them, but the council will still claim it from the seller. If the seller is a private individual not resident in Spain, the law requires the buyer to pay it on the seller's behalf, so it is normally deducted from the price. The estate agent, if the seller engaged one. The agent is paid by whoever engages it, because no legal rule places that cost on the buyer or the seller. Debts owed to the owners' association, special levies already approved and the IBI (the local property tax) for the year of the sale have their own rules, which are a separate matter. Agreements between the parties and buying from a developer Many deposit agreements say that the costs will be paid “según ley” (as provided by law). In Catalonia this leaves the notary and Land Registry costs to the buyer. If the parties want to share them, for example half each, they must say so expressly. If a private individual buys from a developer or another business that sells homes, the contract cannot make them pay the municipal capital gains tax, the costs of the deeds by which the developer declares the building and divides it into flats, the discharge of the developer's mortgage or the cost of connecting the home to the utilities. Nor can it oblige them to take over that mortgage. If the business imposes these clauses without negotiating them, as is usually the case, they are unfair and not valid. In the rest of Spain, if nothing has been agreed, the seller pays for the original of the deed, which stays at the notary's office. The first copy and the Land Registry are paid for by the buyer.