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What are the taxes to be paid on the purchase of a property in Spain?

Posted by Susana Mateo on September 21, 2021
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To formalize your home there are several agents and procedures involved from the real estate agencies that help you coordinate in a notary, the bank, or the selleror taxes such as Value Added Tax (VAT) or Property Transfer Tax (ITP).

Know what are the taxes or expenses that you must incur associated with the sale or mortgage.

If you have doubts about what are the taxes to pay on the purchase of a property in Spain, this post is for you.

To formalize your home there are several agents and procedures involved from the real estate agencies that help you coordinate in a notary, the bank, or the seller or taxes such as Value Added Tax (VAT) or Property Transfer Tax (ITP). To this, let’s add that, according to experts, it is recommended to have “between 10% and 12%, depending on the Autonomous Community (Autonomous Communities of Spain)”.

Before having the keys to the house you bought you should know that there are several taxes or expenses that you must incur associated with the sale and mortgage. However, you should know that the final amounts will vary according to the property you have chosen. Is it a new property or does it already have a time of use?

Taxes or expenses that you must incur associated with the sale

1. Notary

The state regulates the fees or fees of notaries that oscillate according to the property and its characteristics

2. The Land Registry

An important step is to register the property in the Registry and as in the case of notaries, the fees are regulated by regulations and oscillate according to the house.

The total amount of taxes for this 2021 also varies to the conditions of the property acquired. The VAT is 10% and in regions such as the Canary Islands it is at 6.5%, according to the IGIC-Canary Islands General Indirect Tax.

In the case of public housing, VAT can be 4%, but it varies depending on the Autonomous Community and the type of social housing in question”.

To the VAT, we must add the tax of   Documented Legal Acts (IAJD),“a tax is still paid by the buyer and will depend on each autonomous community”.

You should know that second-hand or used homes also have the ITP where “theamount depends on the percentage that is applied on the deeded price and the autonomous community in which the house is located, although as a general rule a rate of between 6% and 10% is applied”.

Taxes or expenses that you must incur associated with the mortgage

If the home you want to acquire is used or you will do it through a loan, you should know that you will add other costs. Among them, the following:

3. Property appraisal

It is a very important step, since you need an agent to tick the house and locate the value of the property, since the bank must know what will be the percentages of financing it will offer.

In this year, idealista points out, that “the appraisal involves a cost of between 250 and 600 euros,depending on the entity that carries out the appraisal, the type of property and its valuation.The appraisal is valid for 6 months from the date of issue.”

4. Opening fee

The opening fee is around up to 2% of the capital, but there are banks that do not take this penalty into account.

What always remains constant?

  • IAJD
  • Notary
  • The Land Registry

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