Property Sales Tax
The amount the purchaser pays will vary depending on the type of property and the nature of the vendor.
If you are buying a second hand property you pay 8% property transfer tax.
If the vendor is not a property developer, the purchaser will pay 8% in property transfer tax.
Property tax (IBI)
This is the main local property tax affecting owners of properties in Spain payable yearly to the Town Hall. The amount of the tax is calculated by reference to the valor catastral (official value of the property) registered in respect of all properties in Spain.
Local mains drainage and refuse collection tax
This local tax is payable by property owners and it is related to rubbish collection and drainage. The amount to pay varies from area to area, and should be paid to the local Town Hall every year. This tax should be between 80 and 150 Euros per year.
Capital Gains Tax
If you sell a Spanish property more than one year after purchasing it, then you are liable to pay Spanish capital gains tax on the difference between the amount that you sell the property for and the amount that you declared having purchased it for previously, minus any inflationary gain.
Non-residents are liable for a “cautionary” retention tax of 3% when they come to sell their Spanish property. For example, when a non-resident sells their Spanish property their buyers pay 3% of the sales price (retention tax) directly to the Spanish tax authorities and will only receive 97% of the sales price. This retention tax is kept “on account” by the Spanish tax authorities until the non-residents capital gains tax is calculated.
Plusvalia (land appreciation tax)
Plusvalia is a tax levied by the local Town Hall based on the particular area where the property is located, on the surface area of the land, on the Catastral value and on the date of the previous title deed. This tax is essentially a tax on the increase in value of the property. By law the vendor (seller) is obliged to pay this tax.
Costs and Taxes related to buying a Spanish property
In addition to the property sales tax, the purchaser also has to pay the notary legal fees (usually around 480 Euros) and the property registry inscription fees (usually around 350 Euros). If you take out a Spanish mortgage a further nominal cost will be passed on to you by your notary for registering the charge of the lender with the land registry.
Example breakdown of costs
Example breakdown of costs related to buying a Spanish property. The following figures show a typical total cost breakdown of purchasing a second hand Spanish property for 150.000 Euros:
- Purchase price: 150.000 Euros
- Purchase tax (8%): 12.000 Euros
- Notary Fees: 480 Euros
- Registration Fees: 350 Euros
- Fiscal Number application: 130 Euros