Taxes and Costs

12-01-01iva-1703-zoom-300x225.jpg (23 KB)When you buy a property in Spain you have to pay 2 types of fees and 2 types of taxes for the registration of the transfer of property ownership:

Fees – (1) for the notarisation of ownership documents and (2) the registration in the Property Registry.

Taxes – (3) ITP - tax on the transfer of property ownership (or VAT/IVA in the case of companies), and (4) a municipal tax on the increase in land value, commonly called Plus valía.

1) Notary fees - you pay to the Notary (Notario) a fixed fee according to an official scale. Its size varies depending on the value of land, housing size and price, and is usually from € 350 to € 600

2) Property Registry Fee - there is a fee for the registration of real estate in your name in the official register of real estate, Registro de la Propiedad. It will be a similar amount to your payment to the notary. Your lawyer or real estate consultant can calculate the exact amount in your particular case before purchasing.

3) Property Transfer Tax (ITP) - In Spanish this tax is called the Impuesto de Transmisiones Patrimoniales (ITP), ranging from 8% to 10% of the value declared in the contract of sale.  When you buy real estate from a developer the IVA (value added tax) is 10%, because the sale is classed as a commercial transaction.

In addition, a fee for the documents (stamp duty) is charged from 0.5% to 1.5%. So, when you buy the property in Spain the taxes will cost you about 9 -11% of their value, as specified in the sales contract.

For properties up to 400,000 euros the tax rate is 8%
Between 400,000 and 700,000 euros – 9%
Above 700,000 euros – 10%

ATT: This year 2024 this tax is 7% (until the end of the current year).

E.g. for real estate costing 750,000 euros, the ITP will cost you 64,000 euros according to the following calculation:

8% - < 400,000 euros, is 32,000 euros
9% - from 400,000 euros to 700,000 euros, is 27,000 euros, and
10% -  > 700,000 euros, is 5,000 euros

E.g. the ITP for a parking space sold separately from the living area, can be calculated thus:

Less 30,000 euros – 8% tax
From 30,000 euro to 50,000 euros – 9% tax and
Above 50,000 euros – 10% tax 

The ITP is calculated on the basis of the minimum taxable value of the property, but not on its price. The minimum tax value is set by the Regional Government of Andalusia.

* Please contact us to find out the exact minimum tax value of your property.

4) Plus Valía tax

The second tax on the sale of real estate is Arbitrio sobre el Incremento del Valor de los Terrenos, a municipal tax on the increase purely on the value of the land since its last sale. It is usually called Plus valía, and its value can vary greatly. This tax is calculated on the basis of the official value of the land, which is always below the market, depending on the period of time between sales and of the city in which this property located. In most of cases (unless otherwise agreed) it paid by the Seller.

In addition to these fees and taxes paid at the time of the property purchase, all property owners in Spain are required to pay annual taxes:

  • IRPF - Impuesto sobre la Renta - tax on imputed income
  • IBI - Impuesto sobre Bienes Inmuebles – annual property tax

 

Don’t worry. Despite the apparent legal complexities in comparison with other European countries, our lawyers and tax consultants will help you to understand all the issues related to tax payments. 

And remember, Spain is a country with one of the lowest tax rates on real estate...