Taxes

When buying a house in Spain it is important to estimate the taxes you will have to pay, not only when you actually purchase your Spanish property, but also local taxes and housing rates which are paid on a yearly basis by all home owners in Spain. Spanish housing yearly rates depend on the value of the house and the area it is in, but here is a rough guide to all the tax expenses you will need to take into account when deciding what house to buy.

Fees & Taxes

• Taxes and fees usually amount to around 11% of the total purchase price of the property
• Taxes payable depend on whether the property being purchased is new-build or resale. Currently, transfer tax of around 7% is applied on resale, which includes stamp duty. Exceptions to the 7% general rule as follows (as of September 2011)
• Andalucía (7% below 400k; as from said amount onwards its taxed at 8%)
• Cantabria (7% below 300k; as from said amount onwards its taxed at 8%)
• Asturias from 8 to 10%
• Catalonia 8%
• Extremadura 7 to 10%
• The Canaries 6,5% (no change)

Note: The Balearic Govt. has announced plans to raise to 8% but for the time being it is still at 7%.

For new-build properties, VAT (IVA) of 7% is payable in addition to 1% stamp duty. The Spanish Government is implementing a plan to reduce tax on new builds to promote the market for new builds. For more detail please contact us.

• On top of this there is also plusvalía (capital gains tax), which is set by the local authorities and depends on the area concerned and the amount of profit being made on the sale. This is usually paid by the seller.

• If the buyer is purchasing land or commercial property rather than residential, VAT rises to 16%. Stamp duty remains the same

• Most Spanish lawyers charge around 1% of the final purchase price, and notary fees are around 0.5%

• Agents’ fees can vary anywhere between 3% and 15% – so be careful no to be ripped off