Buy Property in Spain Keeping the Taxes in mind

While thinking of buying a property in The country, it is necessary for you to consider the taxes which will be payable when the Spanish property is registered against your name. The housing rates and local taxes are applicable on the buyer. The home owners have to pay taxes every year. The housing tax rates are largely dependent on the price of the house and the location it is in. While you are still in the process involving a house you should know the taxes that are applicable.


Re-sale purchase tax is the tax applicable on sellers selling their home. They are supposed to pay a tax called Impuesto de Transferencia de Propiedad it is the Transfer Tax which happens to be at a rate of 7%. New Property buyers, on the other hand have to pay 'New property purchase tax'. Their liability is in terms of taxes called IVA (VAT) which is also 7% in The country. If the house or the property in form of a shop is finished or is still under construction then an extra 0. 5% is true on the buyers (as stamps duty). If you are keen on buying land, commercial complex or a parking space in The country then the tax in terms of VAT increases to 16%. www.rafleys.com

For people involved in a property sale in The country will have to pay an increased patrimony tax which is to be paid to the Spanish Treasury. A capital gains tax is also required to be paid by the person selling the property. Spanish monetary term says that the buyer is able to keep 5% of the actual sticker price entrance to ensure that the house is handed over properly before closing the deal. This amount is usually considered as money gains tax which is deducted on the profit or the money earned by the seller during the sale. This is where the difference lies between the existing (official) value of the property and the original price owner of the property paid.

Money gains tax is 5% of the difference for the not for residents. The rate is 3% for the Spanish residents. This is measured towards the advanced deposit. The amount stored during the sale should be payable only when the new deeds are there and the moment everything is shown to the local registry. This also means property owners who would like to sell off their home in The country need to hire a lawyer to take care of the key paperwork including the tax to be paid for few months after the house has been sold.

It is worth realizing you will require a NIE for paying this tax. A seller over the age of 65 years and a person, who is also a Spanish kama'aina ( for the past four years, is not liable to pay this tax. Another important factor is that both residents as well as non-residents who have bought property before November 1986 won't need to pay money gains tax at all.