Taxes and Fees
Taxes payable by the buyer
The IVA tax (VAT) is applicable to the purchase of new properties at 10% of the purchase price and 21% of the purchase price for urban plots (which have never been transferred before).
In addition, to obtaining the title deed is also subject to Stamp Duty (AJD Tax, tax on Conveyance of Assets and Documented Legal Procedures) at 1,5%.
When properties have been already transferred before, the applicable rate is ITP tax (transfer tax). The rate of ITP is between 8% and 10% of the property purchase price.
- 8% for amounts under 400, 000 Euros
- 9% for amounts between 400, 001 Euros – 700, 000 Euros
- 10% for amounts over 700, 001 Euros
Other costs are the Notary fees and Land Registry fees that are a fixed scale, and the lawyers fee which normally is 1% plus VAT.
If you are taking out a mortgage count on approximately 1-1,5% opening fee of the mortgage amount and 1,8% of taxes and notary fees for the mortgage deed, as well.
Note: These cost and taxes are not reflected on the advertised price for the property and has to be added on top.
For a resale property you have to calculate around 9-11% on top of the asking price and for a new property is will cost between 12-14%. (without a mortgage involved).
Real Estate Tax (I.B.I.)
The IBI (Impuesto de Bienes Inmuebles - IBI) is paid annually to the Town Hall where the property is registered.
The amount of the tax is calculated by referencing the official value of the property (valor catastral).
The IBI contain information about the catastral value and the catastral reference number as well.
When the property constitutes part of a building complex every owner must pay their community fees established by the members at the Annual General Meeting.
Taxes payable by the vendor
Plusvalia: Local tax based on the increase of the taxable value of the property during the time between the purchase and sale of the property.
The tax has to be calculated individually. The longer the property has been owned the more you pay.
Capital Gains tax: For the year 2016 the tax scale is 19% for the first 6000 Euros gain, 21% between 6000 and 50 000 gain, and 23% for amounts over 50 000 Euros. Fiscal retention for non-residents. For non-resident vendors the buyer must withhold 3% of the purchase price and pay that directly to the tax office on the vendors’ behalf. This is a measure to prevent tax evasion by the vendor who resides in another country. The vendor has 90 days, after the payment has been done, to submit a tax return declaration for capital gains tax which will show how much has to be paid. If there is no gain in the sale the 3% will be paid back to the vendor by the tax authorities.