Taxes when buying and selling real estate
The payment of the agreed amount are not the only costs involved. If you buy or sell a property in Spain, there are always taxes associated with the transaction. No matter whether you buy or sell a house, business premise or a building plot.
Taxes involved when BUYING real estate in Spain
In Spain, the costs that are associated with the sale of a property typically amount 10% of the purchase price.
- If you purchase an existing property, you have to pay the transfer tax (Impuesto sobre Transmisiones Patrimoniales, or in short: ITP). The declaration has to be presented at the tax office of the specific region in Spain where the property is located. The transfer tax amounts around 8%, although this can vary between regions;
- If you buy a newly built property, you have to pay the value added tax (VAT), in Spanish the Impuesto sobre el Valor Añadido (IVA). In Spain the IVA-rate concerning real estate with a maximum of two garages is reduced to a maximum of 10% (depending on the purchase price of the property). The IVA concerned with plots amounts 21%. Given the diversity and complexity of the legislation, each case has to be studied separately;
- Finally, because of the Stamp Duty (in Spanish: Actos Jurídicos Documentados, or in short: AJD), a tax that is levied on documents in Spain, an extra 1.5% of the purchase price needs to be taken into account.
Besides the taxes that need to be paid when buying a property in Spain, the notary fee needs to be taken into account as well. This fee is based on the number of pages of the purchase title deed, the number of persons that has to appear before the notary and the sales price of the property. Finally, you have to pay a compensation to have your property registered in your name at the property register (Registro de la Propiedad) of your municipality. The sum varies per register, but typically amounts around 0.5% of the purchase price.
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