Property in Spain
Purchasing property can be a very profitable investment of your capital. With the help of Spain-Real.Estate, you can find reliable developers in Spain to make this process go nice and smooth. But anyway, when buying real estate abroad you always have to keep in mind that you have to pay certain taxes for that. Here we will have a look at the taxes that you may encounter in Spain.
Taxes for the new-build property
If you want to purchase property there are a couple of options. Let’s imagine you are going to invest in the new property, something that no one has owned before you and is usually sold directly by the developer. In this case, you have to pay the following taxes:
- IVA (we know it as VAT), which is 10% of the price
- AJD, which is 0,5-1,5% of the price, depending on the region of the purchase
| Percentage | Region |
| 1,5% | Andalucía, Aragón, Comunidad Valenciana, Castilla y León, Cataluña, Galicia y Murcia |
| 1,25% | Castilla-La Mancha |
| 1,2% | Asturias, Baleares y Extremadura |
| 1% | Canarias, Cantabria y La Rioja |
| 0,75% | Madrid |
| 0,5% | Ceuta, Melilla, Navarra y el País Vasco |
Taxes for resell
If you want to buy resale property there is only one tax levied. It is the transfer tax and is called ITP in Spanish. The amount of tax differs from region to region but usually is around 6-10% of the purchase price. There is a convenient way to pay it though – you have a full month after the deal is signed. Note that ITP is incompatible with AJD!
Fees for services
In addition to those mentioned above, you may need to pay some other fees, like the following:
- Notary fees
The cost of these fees in Spain is regulated by the state and ranges from €600 to €875 (depending on the price of real estate) for the issuance of a deed of purchase and sale.
- Land registry fees
These fees depend on the region, on average the sum will be around €400-€650.
- Insurance
Home insurance is compulsory and is most often done directly with the bank acting as an intermediary. Life insurance is required in most cases, with few exceptions.
- Stamp duty
It is levied upon execution of a mortgage loan agreement in the form of a certain percentage of the loan amount, following the established in the region.
- Assessment of the cost of housing
Allows the bank to determine if the property is overpriced. The more expensive an apartment or house is, the more expensive is its assessment. For an average property, the price will be €200-€500.
- Estate agent fees
It is only natural to pay for the estate agency service when you are going to become an owner of real estate in another country.
- Gestoria commission
Arranging a purchase of a real estate in Spain you may need an assistant, who will help you to deal with all the bureaucracy on your behalf.
- Banking costs
You may need to pay transaction fees for transferring your money to Spain from the bank account in your country.
- Mortgage fees
Mortgage payments should be paid in the amount loaned plus valuation, which usually costs around €500.
Buy real estate in Spain
The taxation system in Spain is not that complicated. You can always hire a specialist who will provide you with all the necessary information and guide you through the procedures and negotiations. With the help of Spain-Real.Estate you can quickly become a proud owner of a home in the country of sun and love.