What expenses will I have when buying a property in Spain?
Taxes:
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- Transfer tax (resale properties only). The percentage varies depending on the region where the property is situated. Nowadays the Transfer Tax in the Valencian Community is 10% of the property price.
- Value added tax IVA (new properties only). Nowadays the VAT for new property purchase is 10% of the property price.
- Legal documents tax (new properties only). Nowadays the tax in the Valencian Community (Alicante, Valencia, Castellón province) the tas is 1.5%.
Fees:
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- Land Registry Fees. Usually, these fees are around €200 and €600.
- Notary’s Fees. The Notary fees are official (fixed by law) and will depend on the property sale price. The fees are usually from €500 to €800.
- Legal Advisor Fees (Lawyer)
- Management Office Fees (Gestoría).
- Utility contract Fees.
Once you are the new owner you will have to pay the IBI tax (tax on real estate) and the garbage collection tax (which has to be paid once a year).
The IBI tax will have to be paid by the person owning the property since the 1st of January of the year. This means that if you buy your property on the 29th December, you will have to pay the IBI tax for the next year, but if you buy the property on the 15th January, the former owner will have to pay the IBI tax for the year and you will have to start paying this tax next year. Lately, it is common that the seller and buyer agree on paying the tax in proportion to the days when the property is owned.
What expenses will I have when selling a property in Spain?
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- PLUSVALIA (Impuesto sobre el Incremento del Valor de los Terrenos de Naturaleza Urbana): It is a municipal tax and is applied to the increase in the value of the land since the last transfer. It has to be paid by the seller. Each Ayuntamiento (town council) has a different rate to calculate it. It must be paid within 30 days from the signature of the sales deed as all the other taxes.
- NON RESIDENT TAX: At the Notary, when selling your property, you will receive the total sale price except the 3%, which will be paid by the buyer directly to the Spanish Tax Office.
- ENERGY EFFICIENCY CERTIFICATE (Certificado de Eficiencia Energética): The energy efficiency certificate has to be done by an official technician. This document will include information about the efficiency of the property and some recommendations to make the property more efficient for saving energy. This document is mandatory and will have to be taken to the Notary when selling the property.