Spanish taxes

Buying property in Spain can be a costly matter, but the good news is that, with the abolition in October 2018 of stamp duty payable by mortgage holders, buyers with loans are now saving thousands of euros in purchase costs.

Nevertheless, you should still factor in approximately 10-13% on top of the purchase price to cover all costs, including property taxes.

Here’s an up-to-date breakdown of the taxes to pay when purchasing your property in Spain:

New build / off-plan
VAT (IVA) 10%
Stamp Duty (AJD) 0.5 – 1.5%
Land Registry fees 0.1 – 2%
Notary Public fees 0.1 – 2%
Lawyer’s fees 1%
Mortgage loan a few hundred euros

Resale
Property Transfer Tax (ITP) 6 – 11%
Land Registry fees 0.1 – 2%
Notary Public fees 0.1 – 2%
Lawyer’s fees 1%
Mortgage loan a few hundred euros

But the costs don’t stop there. You will have a number of on-going taxes to pay once you own your property, so make sure you’ve budgeted for these to avoid any unpleasant surprises.

These are the on-going taxes you should factor in:

IBI tax 0.4 – 1.1% of the cadastral value per annum (this is below the market value and nearer the bank valuation figure)
Rubbish tax varies depending on the area you live in
Community fees varies per urbanisation
NRIIT (non-residents tax) 1.1% or 2% of the property’s cadastral value p.a.

Finally, it’s vital that you take thorough legal advice when budgeting for purchase taxes, fees and other expenses. Bear in mind too that in Spain, signing an initial reservation contract to take the property off the market means you will not necessarily be refunded should you pull out of the purchase for any reason other than if you are refused a mortgage.

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