Buying Property in Spain? Here’s the Tax Rundown You Need to Know!
Spain boasts a sophisticated tax system designed for both residents and non-residents when it comes to real estate transactions. Let’s break down the key taxes you’ll encounter when purchasing property:
Transfer Tax (Impuesto de Transmisiones Patrimoniales, ITP):
For second-hand properties, this tax applies. Rates vary by region, ranging from 6% to 10% of the property’s value.
For example, in Catalonia, the rate is 10%, while other regions may offer lower rates for specific groups, such as first-time buyers.
Value-Added Tax (IVA):
Buying a brand-new property from a developer? You’ll pay VAT instead of ITP:
10% for residential properties.
21% for commercial properties or land plots.
Stamp Duty (Impuesto sobre Actos Jurídicos Documentados, AJD):
This tax covers the formalization of property transactions, with rates between 0.5% and 1.5%, depending on the region.
Notary and Registration Fees:
Covering legal formalities like deed notarization and property registration, these costs typically add up to 1–2% of the property price.
Stamp Fees:
Occasionally applied in specific cases, this is usually a small percentage of the transaction value.
Navigating Spain’s property tax maze can feel overwhelming, but understanding these key points will make the process smoother and more predictable. Ready to dive into the Spanish real estate market? Let’s make it happen!
