Taxes on buying property in Spain

01 April 2021

By Martha L.
Director of Alanda Properties
1st of April 2021

 

On buying a home in Spain, the first point is to determine whether you are buying new build (off-plan or sobre plano, in Spanish) or a resale (second-hand property or reventa, in Spanish). Two different sets of taxes apply depending on which property type you acquire.

In addition to the above, Spain’s 17 autonomous regions have devolved competencies on tax matters which allow them to approve – within limits– their own tax rates following a sliding scale. This means that a resale property that is sold, for example, in Madrid will not have the same applicable tax rates as one sold in Mallorca as they are both located in different regions, subject to different tax rates.

This is why we strongly recommend that a buyer should pre-empt this scenario by requesting from a lawyer a breakdown of taxes and associated expenses, to budget carefully for the conveyance procedure and avoid nasty last-minute surprises (this advice applies likewise on selling, by the way!). Unless you instruct a lawyer, they do not normally provide tax breakdowns for free.

As a rule of thumb, purchase costs add 10-13% over and above the asking sales price. We collate below the most usual taxes and associated fees on buying property in Spain. Again, we stress that the below charts are merely a generalisation; please take concrete legal and tax advice on your particular matter. All fees have VAT on top.

New-Build or Off-Plan Property

 

Taxes & Fees Rate
VAT (IVA) 10 %
Stamp Duty (AJD) 0.5 – 1.5 %
Land Registry fees 0.1 – 2 %
Notary Public fees 0.1 – 2 %
Lawyer’s fees 1 %
Mortgage & Gestoría fees* few hundred €

 

Resale Property

Taxes & Fees Rate
Property Transfer Tax (ITP) 6 to 11 %
Land Registry fees 0.1 – 2 %
Notary Public fees 0.1 – 2 %
Lawyer’s fees 1%
Mortgage & Gestoría fees * few hundred €

 

(*These apply only if a mortgage loan is required from a lender).

Post-sale, there are several taxes and ongoing maintenance costs you should be aware of, including annual taxes and insurance.

Contact me at Alanda Properties for bargain-priced property or long term lets in Marbella and the Costa del Sol. You will be surprised to learn the deals this new market has to offer on prime locations.

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