Home buyer's guide: the costs nobody tells you about

Buying a home isn't just paying the price: you have to add taxes, deposits and surprises

Buying a home is the biggest financial decision most people make in their lives, and yet it's closed with a striking ignorance of what's being signed. The asking price is rarely the real price: on top of the initial outlay you have to add taxes when buying, owning, selling and inheriting —VAT, property transfer tax, stamp duty, property tax (IBI), capital gains and inheritance— plus community fees and the insurance the bank ties to the mortgage. The average person in Spain buys only two homes in an entire lifetime, so nobody gets any practice.

The first big mistake is believing that the owner's asking price is the property's value. It isn't. A home is worth what a buyer is willing to pay, and to get close to the real value it's worth asking for the property tax (IBI) receipt, which shows the cadastral value, or the transfer tax assessment. These are two tax references that don't always match, but they usually move in tandem.

The estate agent doesn't work for you

When you buy through an agency, the agent's real client is the seller: that's who pays the commission in most cases. The salesperson needs to list properties and sell the ones they have, not the ones you're looking for. Hence the classic scene: you ask for a two-bedroom in one neighbourhood and they show you a three-bedroom in another, with the argument that "it costs a bit more but it'll suit you perfectly". The recommendation is to visit every agency as well as private sellers, because only then do you see the full market.

There are textbook tricks. Saying there's another viewing or that families are interested is the classic way to rush you; sometimes someone even waits at the door to fake that competition. To gauge a property's real interest level there's a more honest clue: the number of favourites it has accumulated on property portals compared to the average for similar homes.

Built square metres, duplexes and drying racks: the fine print of property

Built square metres are not usable square metres. That figure includes landings, walls and common areas. What matters is what you actually use, and the best approach is to measure the home yourself with a tape measure or from the developer's floor plan. Garage and storage room square metres are not living space and shouldn't be mixed in. Nor are the figures in the land registry necessarily accurate: developers used to pay tax on the square metres they built and tended to under-declare.

The duplex deserves a chapter of its own. It was born as a way to sell as housing what in some buildings were attic rooms or storage spaces: those square metres sell for more as an apartment than as a storeroom. A nice marketing name, a bigger floor plan, and the price goes up. The upper floor usually gets less light because of the window orientation.

And then there's the drying rack, that detail nobody looks at. If there's no tumble dryer, you need somewhere to hang laundry without it ending up in the neighbour's patio or soaked by a sudden downpour.

Deposit, arras contract and notary: the right order

Before the notary, the arras contract is signed, a private agreement that sets the price and timeframe. Being private, it allows for custom clauses and dates. Two months until the notarial signing is usual, though it's not a fixed rule. Putting down a sum as a commitment —around 10% of the total is most common— prevents the deal from falling through on a mere verbal agreement.

The mortgage as a noose

Most people need financing. Before viewing homes, it's wise to visit banks and compare terms. It's common for them to require you to have your salary paid into an account with them and to take out home and life insurance, which can add up to around 50 euros a month. A mortgage can become a noose around your neck if you don't negotiate carefully.

The full calculation of all these costs, item by item, is where you really see whether the deal works or sinks.

With all this in mind, buying a home remains an obstacle course for the first-time buyer. The information is out there, but not always where it should be.