|
|
 |
Legal Section
|
|
Which taxes do you have to pay when you buy a property in Spain:When purchasing a property in Spain, there are a few taxes that would have to be settled, depending on whether you are buying directly from a developer (new construction) or a second hand home.
|
|
|
|
|
|
|
Value Added Tax (VAT or IVA) Impuesto sobre el Valor Aņadido (IVA). This tax is levied when buying a new property or a property in the course of construction and is currently fixed to 7%, applicable to the official purchase sum. It is paid directly to the developer / vendor. In addition you would have to settle the 0,5% Stamp Duty. If you purchase parcels of land, commercial premises or garage spaces, the IVA rate is 16%, plus 0,5% Stamp Duty. However, if you purchase the garage with the property, the IVA is reduced to 7% (the maximum numbers of garages that can be included is two). Note: The IVA is incompatible with the ITP-tax.
|
|
Transfer Tax or Estate Tax (ITP) Impuesto sobre Transmisiones Patrimoniales Onerosas. When purchasing a second hand property, a transfer tax of 7% is applied to the official purchase sum. This tax is not the same as Value Added Tax, which does not apply to second hand property, neither does the 0,5% Stamp Duty tax.
|
|
|
The Municipal Capital Gains Tax (Plusvalía) Impuesto sobre el Incremento del Valor de los Terrenos de Naturaleza Urbana or Impuesto Municipal sobre las Plusvalías. In general this tax burdens the increase of value of lands between the moment of its acquisition and its sale, and is levied by the local Town Hall based on a) the particular area where the property is located; b) the surface area of the plot; c) the catastral value; d) and on the date of the previous title deed (escritura). This tax may range from a few euros to as much as hundreds of thousands of euros on larger properties with a lot of land. By the law the vendor is obliged to pay this tax, however it has become customary to negotiate this, why it is not uncommon that the purchaser settles this amount.
|
|
|
Stamp Duty Tax: The stamp duty rate of 0,5% is applicable to certain types of notarial and commercial documents executed in Spain or abroad if they have legal or economic effects in Spain. It is applicable with VAT when a new property, plot of land or commercial property is purchased. Impuesto de Actos Jurídicos Documentados.
|
|
|
Obviously, this taxes are usually calculated within the overall costs of purchasing a property, which would also include the solicitorīs fees. The total of the costs would be around 10% of the purchase price.
|
|
|
|
Association of Independent Estate Agents