THE COST OF BUYING AND SELLING PROPERTY IN SPAIN

When purchasing real estate, in addition to the direct cost of the property, you should also include acquisition costs in the overall budget. The amount of costs for registering ownership of secondary housing will be approximately 10 – 11% of the cost of the property. New properties from the developer are subject to VAT, so the purchase costs will be approximately 12%. Additionally, the services of a lawyer are also paid.

Unless other conditions are specified in the contract, the Buyer and the Seller
pay taxes and duties in the following order:

BUYER PAYS:

PROPERTY TRANSFER TAX

As soon as the documents are signed at the notary office
transfer of ownership rights, the so-called “Escritura” (Spanish “Escritura” – certificate of confirmation of title) is issued, which
then transferred to the Spanish Tax Office. If you buy a secondary one
real estate (i.e. we are talking about objects that are NOT being sold for the first time and NOT
directly from the developer), then property transfer tax will be charged.
If the property is being sold for the first time from a developer, then upon purchase it will be necessary
pay VAT and stamp duty.

Property transfer tax (Impuesto sobre Transmisiones Patrimoniales: ITP) is 8 -10% and is paid by the BUYER who purchases the property
secondary real estate: house, apartment, commercial premises, garage, land
plot, etc. Junta (Spanish “Junta” – regional government)
establishes the estimated value of the object, and if the minimum
the assessed value exceeds the price at which the object is actually purchased, then the tax will be calculated on
based on the estimated value. Calculation scale:

For prices up to 400,000 euros – tax 8%
For prices from 400,000 to 700,000 euros + 9% tax on the difference between 400,000 and the cost
For prices above 700,000 euros + 10% tax on the difference between 700,000 and the cost

WHEN PURCHASING GARAGES AND PARKING SPACES:

When purchasing housing together with a parking space, the buyer is not required to pay
property tax for parking spaces,
if their number does not exceed TWO. All additionally purchased garages and parking spaces will be subject to
tax based on:

For prices up to 30,000 euros, tax is 8%
For prices between 30,000 and 50,000 euros + 9% tax on the difference between 30,000 and the cost
For prices above 50,000 euros + 10% tax on the difference between 50,000 and the cost

FOR EXAMPLE:

Calculation of tax on an object worth 1,500,000 euros:
400,000 euros 8% 32,000 euros
Difference between 400,000 and 700,000 euros 9% 27,000 euros
Difference between 1,500,000 and 700,000 euros 10% 80,000 euros

TOTAL 139,000 euros

VAT (IVA)

In the event that the DEVELOPER, PROMOTER or OFFICIALLY AUTHORIZED BROKER
offers for sale new villas, apartments or parking spaces in residential
complexes, VAT on these objects will be 10%. If the DEVELOPER, PROMOTER or
AN OFFICIALLY AUTHORIZED BROKER offers land plots for sale,
commercial premises and parking spaces located inside commercial premises
objects, VAT will be 21%. This VAT is applicable only in case of purchase
secondary real estate from a DEVELOPER, PROMOTER or OFFICIAL
AUTHORIZED BROKER.

STAMP DUTY

Stamp duty is 1.5% and is charged on the purchase of villas, apartments,
parking spaces in residential complexes, as well as land, commercial premises and
parking spaces from a DEVELOPER, PROMOTER or OFFICIALLY AUTHORIZED BROKER.

NOTARY AND REGISTRATION FEES

The total amount of notary and registration fees will depend on
the value of the property, as well as the complexity of registration of the right
property, approximately you need to expect to pay approximately 3,000
Euro.

THE LAYER’S SERVICES

Typically, the fee for a lawyer to register ownership of a property
purchased real estate costs 1% of the cost of the property, but prices
may vary depending on the attorney and the value of the property.

THE SELLER PAYS:

MUNICIPAL VALUE ADDED TAX (Plusvalia)

This tax is calculated based on the indexed cost of land,
set by the local Administration, it applies to the difference between the cost
at the time of the previous purchase (i.e. purchase by the current Seller) and this
sales, while the period of last ownership of the object will be key when calculating
tax amounts. For apartments and townhouses, this is usually a small amount,
however, it can be much higher for villas and large plots of land that
were in the continuous possession of the same owner for a period
for long years. A specific calculation of the tax amount can be provided upon request at
local Administration. The legal representative must apply for this
settlement before completing a purchase and sale transaction.

PAYMENT FOR AGENCY SERVICES

Payment for agency services is usually made by the Seller, or according to
jointly reached agreements of both parties.

LEGAL EXPENSES

CANCELLATION COSTS

The seller must pay all taxes, mortgage cancellation costs or any
other debts on this property, since the property must
be sold free of any debt
and encumbrances.

Attention

The information provided is for general informational purposes only, and we strongly recommend that you consult with an attorney regarding all possible costs and taxes applicable when registering ownership of a property.