What are the costs associated with buying a house?

At the end of the article you will find an example of the total costs to buy a house for €120,000 through a home loan - around €4,000. But first, get to know each of the "roles", "taxes" and "commissions" that you will have ahead of you.

Are you going to buy a house with your own capital - that is, without taking out a home loan?

If you have the financial availability to buy the house without bank financing, count on two types of costs:

1. Taxes
2. records

Tax amounts are set by law, as explained below.
On the other hand, registration fees and costs may vary depending on the place where the deed is carried out (conservatory, finished house, etc).

What taxes will I have to pay?

Whenever there is a financial transaction for the purchase/sale of a property, the IMT - Municipal Tax on onerous property transactions must be paid. The table varies depending on:

• Urban or Rustic Property;
• Location (on the mainland or in the autonomous regions);
• Purpose (Own and permanent housing or secondary/investment housing).

You will also have to pay Stamp Duty - explained below.

And how much will I have to pay for IMT?

The IMT value is the result of applying the following formula:

IMT = Property Value * Rate to Apply * Installment to be Deducted

The property value is the greater of two values:

1. Equity Value of the Property;
2. Value of Scripture.

Both the value of the fee to be applied and the amount to be deducted can be consulted in the tables on the finance portal (values that are updated in the State Budgets).

Can I apply for an IMT exemption?

The tax table includes the possibility of obtaining an exemption from this payment. However, only own and permanent dwellings are exempt and the maximum value of the property is also tabulated. On the mainland, you only have to pay the IMT for properties with a value above €92,407, whereas for the Autonomous Regions the value is €115,509

How much will Stamp Duty (IS) cost me?

Being an “old-fashioned” tax, since the transaction does not have a stamp, it is a tax where the State obtains a very interesting collection. When buying a house with equity, you will have to bear a tax of 0.8% on the value of the property (as mentioned in the previous point). Thus, the value of IS is the result of the following formula:

IS = Property Value * 0.80%

Moving on to registration costs...

The transaction of a property has several costs for its legal formalization. This formalization is carried out with a deed of purchase and sale of the property, which can be carried out in different places. Noteworthy are notary offices and land registry offices. Recently, the State created the Casa Pronta modality that ends up centralizing the necessary acts for the deed in a single place (it is also possible to pay taxes here).

The cost of the deed at Casa Pronta, in the form of purchase with equity, is €375.

The cost in the registry offices can be much higher, but it will depend on the tables of each establishment.

What about the IMI (Municipal Property Tax)?

The well-known IMI is a cost that falls on everyone who owns a property. This value is calculated based on a table issued by the Government, and the rate varies from 0.3% to 0.8% of the taxable asset value (which is usually much lower than the acquisition value). You can check the taxable equity value of your property on the Finance Portal.

And are there more costs?

In addition to registration and tax costs, when buying a home also consider other costs such as:

• insurance premiums;
• condominium;
• other fees and taxes;
• other expenses that arise in the meantime (such as, for example, the maintenance of the property).

And if I take out a home loan, what costs will I have?

The purchase of a property using bank financing has a wider set of costs. Thus, the costs mentioned above will still be necessary to bear:

Bank Fees: They vary according to the financial institution, but on average you can count on a value close to €1,000. We are talking here about evaluation commissions, study of the process and others. This value will also depend on existing protocols. For example, Doctor Finance's partnerships make it possible to significantly reduce these fees;

Stamp Duty: Bank financing gives rise to the payment of stamp duty on the financed amount. Thus, it will bear an IS of 0.6% on the financing value.

Registration: The deed registration referenced above was for one act only. However, it is also necessary to register the loan with mortgage (commonly known as a mortgage on the property in favor of the bank). In this case, the cost instead of €375 becomes €700.

Life Insurance: Banks require the payment of life insurance that covers the death of the contract holder. This amount will depend on several factors such as the insurance company, the amount owed and the customer's health conditions. Ask the team at Doutor Finanças to find the Life Insurance that best suits your needs.

Multirisk Insurance: Which will also vary according to the value of the property.

Example for the purchase of a permanent home for €120,000 with a Mortgage Loan

To simplify the analysis, let's take an example of a housing credit agreement for the purchase of an urban property. In this case, we will have the following costs:

• IMT: €551.86
• IS on purchase: €960
• IS on financing: €720
• Ready House Registration: €700
• Commissions and Bank Charges: €1,000

TOTAL: €3,931.86

The costs for those who are going to buy a house are expressive. However, given the rising costs of renting, buying a home with a home loan is most often the most advantageous deal.

If you want to buy a house, make a simulation with Doutor Finanças, and then you will have the free help of consultants who will tell you how much you can save, either in the spread or in the commissions and charges. To simulate the best conditions for your home loan with Doutor Finanças, simply fill out this form. We'll get in touch with you, advise you, and help you with whatever you need - at no cost.