TAX CONCIDERATIONS & OTHER COSTS FOR PROPERTY IN SPAIN
PURCHASE OPERATION
In general terms, allow about 10% to 11% extra to cover your tax liabilities and miscellaneous costs. This will cover:
• The Spanish equivalent of VAT, known as IVA, which is calculated at 7% of the value of a new property. In the case of pre-owned property the % is the same of new property buy the name of the tax is not the VAT, in this case is the tax is the Transmission Tax.
• The stamp duty, which at present is 1%
• The Land registry fee
• The Notary Fees
• Connections to local utilities and legal fees, which are usually about 1% of the sale value.
AFTER THE PURCHASE OPERATION
After you complete your purchase operation you are going to be submitted to the following periodically taxes:
1. Real Estate Tax:
Each year, owners of Real Estate must pay IBI, which is a tax issued by the local council for all owners of property. If you are purchasing a second hand property, ensure that you are given copies of previous receipts as proof of past payments.
2. Wealth and Income tax:
Those taxes will be charged annually in connection with the value of the property you own.
For more information about Taxes and other cost regarding your investment in Spain, please contact to our Legal Representative from Iberbrit Legal & Financial Consultant.
