Purchase Taxes in Spain

As a general rule, buyers should set aside an extra 10-15% on top of the agreed sale price to pay for taxes arising from the sale

Resale properties – Transfer Tax

When the seller is a private individual *, you have to pay Transfer Tax (Impuesto de Transmisiones Patrimoniales), which is levied by the Spanish Tax Agency on a sliding scale, depending on the sale price.

 

Property Price 0 – 400.000€ 400.000,1€ – 700.000€ 700.000,1€+
Transfer tax 8% 9% 10%
Notary Fees (approx) 0,50% 0,50% 0,50%
Land Registry Fees (approx) 0,30% 0,30% 0,30%
Legal Fees (approx) 1% 1% 1%
Mortgage Fees ** (approx) 1% 1% 1%
TOTAL 10,80% 11,80% 12,80%

* Tip: Joint owners can benefit from a potential discount because, although the same rates of tax apply, the taxable base of the purchase price is calculated in proportion to ownership.

** Mortgage taxes: If you buy either a resale or new property in Spain with a mortgage, you are required to pay Stamp Duty, at a rate of 1.5%, on the maximum liability covered by mortgage (principal loan, interests and legal costs in case of default).

Example:

For a property costing 750,000€, the amount of Transfer Tax due is as follows:

Sole purchaser Joint purchasers
(e.g.: a couple who each buy 50% of the property)
8% of the first 400.000€ = 32.000€ Owner 1: 8% of 375.000€ = 30.000€
9% of the next 300.000€ = 27.000€ Owner 2: 8% of 375.000€ = 30.000€
10% of the remaining 50.000€ = 5.000€
TOTAL 64.000€ TOTAL 60.000€ (4.000€ saving)

When the seller is a company or professional who sells property as a business, the buyer has to pay VAT at a flat rate of 21%.  Exception: If the buyer is acting as a Spanish developer, transfer tax is levied at a flat rate of 2% provided the property is sold within the following five years.

New properties (normally from a developer)

Buyers have to pay VAT at a flat rate of 10% on new-build properties. Whenever VAT is due, buyers also have to pay Stamp Duty (Impuesto sobre Actos Jurídicos Documentados) at 1.5%.

VAT 10%
Stamp Duty (AJD) 1,5%
Notary Fees (approx) 0,5%
Land Registry Fees (approx) 0,3%
Legal Fees (approx) 1%
Mortgage Fees (approx) 1%
TOTAL 14,3%

Buying a Plot of Land

When buying a plot of land how much tax you pay depends on the tax status of the seller. When the seller is a Spanish business or professional who bought it acting within the scope of its business, VAT is levied at a flat rate of 21% on top of the sale price in addition to stamp duty (actos jurídicos documentados, AJD) – charged at an additional 1.5%.

When the seller is a private individual not acting in business, no matter if the seller is tax resident in Spain or not, ITPO is levied on a sliding scale in accordance with the sale price: 8% up to 400,000€, 9% from 400,000.01 to 700,000€, and 10% over 700,000.01€. As with resale properties joint owners, can benefit from a discount because while the same rates apply, the taxable base of the sale price is calculated in proportion to their ownership share.

Buying Land from an Individual

Private Seller – When the seller is a private individual*, you have to pay Transfer Tax (Impuesto de Transmisiones Patrimoniales), which is levied by the Spanish Tax Agency on a sliding scale, depending on the sale price.

Property Price 0 – 400.000€ 400.000,1€ – 700.000€ 700.000,1€+
Transfer tax 8% 9% 10%
Notary Fees (approx) 0,50% 0,50% 0,50%
Land Registry Fees (approx) 0,30% 0,30% 0,30%
Legal Fees (approx) 1% 1% 1%
Mortgage Fees ** (approx) 1% 1% 1%
TOTAL 10,80% 11,80% 12,80%

* Tip: Joint owners can benefit from a potential discount because, although the same rates of tax apply, the taxable base of the purchase price is calculated in proportion to ownership.

** Mortgage taxes: If you buy either a resale or new property in Spain with a mortgage, you are required to pay Stamp Duty, at a rate of 1.5%, on the maximum liability covered by mortgage (principal loan, interests and legal costs in case of default).

Buying Land from a Spanish business or professional

When the seller is a Spanish business or professional who bought the land acting within the scope of its business activities 21% VAT is levied on the purchase of the land.

VAT 21%
Stamp Duty (AJD) 1,5%
Notary Fees (approx) 0,5%
Land Registry Fees (approx) 0,3%
Legal Fees (approx) 1%
Mortgage Fees (approx) 1%
TOTAL 25,3%

* Mortgage taxes: If you buy either a resale or new property in Spain with a mortgage, you are required to pay Stamp Duty, at a rate of 1.5%, on the maximum liability covered by mortgage (principal loan, interests and legal costs in case of default).

Parking Spaces

Parking spaces (when sold separately from a dwelling or, if sold together, when more than two spaces are sold at the same time) are taxed in line with a separate scale:

Parking Space Price 0 – 30.000€ 30.000,01€ – 50.000€ 50.000,01€ +
Tax 8% 9% 10%

When do I need to pay these taxes?

All taxes arising from the sale of a property in Spain must be paid within 30 banking days of the date of signature of the public title deed. If not complied with, buyers will be charged an additional 20% in fines and interest on top of the amount owed.

 

 

 

 

contact Terra Meridiana
Property purchase taxes in Spain
Adam

"Looking to buy or sell a property in Costa del Sol?"