Property taxes in Spain

When talking about property taxes there are many different taxes depending on the nature of the activity. Each property transaction whether buying a property or selling a property in Spain requires different taxes, and includes various costs and expenses. Some of these costs will be the responsibility of the buyer and others will be of the seller. It is a good idea to have an orientation of what costs and taxes correspond to you, as it is not unusually that a third party will try to push some costs over to reduce what their client ends up paying. This has happened in the past with estate agents, and unfortunately they only found out after the transaction had finished that they had overpaid.

When buying a property in Spain you will have to the following taxes to complete your purchase.

  • -New build or off plan
  • -Taxes to pay are the VAT and Stamp duty (IVA and AJD)
  • -Re-sales and second hand properties
The taxes to pay are the transfer tax (ITP) and a non-resident retention tax.

Apart from these taxes, it is important to understand that these are not the only costs involved and that you will need to budget for more and the other expenses needed for the purchase and essential and sometimes costly. The other costs may include a survey, notary and agent fees, as well as documentation charges.

When selling a house the taxes will be completely different as to when you brought, although you will now have an idea of the Spanish system and some documentation integrating you into the Spanish system. This should all make the process, somewhat easier.

Taxes as followed:
  • -Capital gains and liability (plus-valia)
  • -Non-resident retention
  • -General maintenance tax (IBI)
If your activity in Spain was for investment purposes, then you will have of course various taxes to account for. While Spain has tended to be lower than most of Europe, with some variation along the way, they favor business and invest within the country. If you are included in any financial activity in Spain you will have to income tax where applicable, by doing the Spanish tax return declaration.

As long as you have been advised as to how to go about the tax system in Spain then there should be no issued. It is always a good idea to seek consultation from a professional and have financial representation.  However, if the taxation system is not taken seriously form the beginning, then there can be huge fines which can result in losing your assets in Spain. The tax offices in Spain can turn quickly if they believe that the corresponding taxes are not paid, particularly in recent years where they are cracking down on tax avoidance.

ABAD FINANCIAL AND LEGAL offices are trained experienced professions that work efficiently as a team to get the best result for our clients. We ensure that our clients are not only informed every step of the way, that can be absolutely confident that every aspect of looked after and everything will be attended.