Legal and Tax
Spain

What are the different taxes you need to consider?

When purchasing a property in Spain, you can expect to pay several taxes. These include Value Added Tax (VAT) or Transfer Tax (ITP), Stamp Duty, Notary and Registry fees, and potentially Capital Gains Tax (if applicable).

What is the Value Added Tax (VAT) or Transfer Tax (ITP)?

VAT is typically imposed on new properties and is set at a rate of 10% of the property’s purchase price. However, in some cases, Transfer Tax (ITP) is applied instead, ranging from 6% to 11% depending on the region.

What is Stamp Duty?

Stamp Duty, also known as Documented Legal Acts Tax (AJD), is a tax imposed on public deeds, mortgage loans, and other legal documents related to property transactions. The rate varies by region and typically ranges from 0.5% to 1.5% of the property’s value.

What are Notary and Registry fees?

Notary and Registry fees are charges associated with the legal registration of the property transaction. These fees are determined based on the property’s value, the complexity of the transaction, and the chosen notary and registry.

When is Capital Gains Tax applicable?

Capital Gains Tax is applicable when selling a property in Spain. It is calculated based on the difference between the purchase and sale price, with rates ranging from 19% to 23%. However, there are exemptions available for residents and specific circumstances.

Are there any additional taxes or costs to consider?

Apart from the aforementioned taxes, it’s important to budget for other costs such as legal fees, property valuation fees, and mortgage-related expenses (if applicable). These additional expenses should be taken into account when calculating the total cost of purchasing a property in Spain.

Are tax rates the same throughout Spain?

No, tax rates can vary depending on the region in Spain. Each autonomous community has the authority to set its own tax rates, so it’s essential to be aware of the specific rates applicable in the area where the property is located.

Do non-residents have different tax obligations?

Yes, non-residents in Spain have certain tax obligations. For example, they are required to pay income tax on rental income earned from the property, even if they are not Spanish tax residents. It’s important to consult with a tax professional to understand your specific tax obligations as a non-resident property owner.

Can I benefit from any tax incentives or deductions?

Yes, there are certain tax incentives and deductions available in Spain, such as deductions for first-time buyers or for using renewable energy systems in the property. These incentives can vary, so it’s advisable to consult with a tax expert to determine if you qualify for any deductions or incentives.