The full costs involved of purchasing a constructed residence in Spain works out at approximately 10-11% for re-sale properties and approximately 12 % for new properties, if VAT (IVA in Spanish) is paid on the purchase price.
Lawyers’ fees, at approximately 1% of the property price (plus VAT), must be added to these figures. We break down these costs below.
TRANSFER TAX (ITP)
This tax must be paid by the purchaser of all properties: villas, apartments, land, commercial premises or garages, provided the vendor is not a developer or normally trading in the business of re-sale properties (waiver to VAT exemption). It is scaled at between 8 and 10%, in the following way: If the Minimum Fiscal Value of the property, as per the Regional Government, is greater than the price, then the minimum fiscal valuation applies: 8% applicable up to the amount of €400,000; 9% applicable to the amount between €400,000 and €700,000 and 10% applicable to the amount exceeding €700,000.
VAT (IVA), STAMP DUTY (AJD) and NOTARY AND PROPERTY REGISTRY FEES
This is applicable at the rate of 10% (IVA) and 1.5 % (AJD) to villas, apartments, or a garage annexed to either, where the vendor is a developer, promoter or habitual trader for new properties. Applicable at the rate of 21 % (IVA) and 1.5 % (AJD) to parcels of land, and for the purchase of new commercial premises.
Notary and Property Registry Fees: Loose approximation of cost at 3,000 euros depends on the number of pages or complexity of the deed and value of the property.
MUNICIPAL VALUE ADDED TAX (Plusvalía)
This tax can vary between a few hundred and thousands of euros on a property with land included, which has not changed hands in decades. Imposed by the Town Hall, it is based on the increase in the index value of a property from the year of purchase to the year of sale. It is paid by the vendor unless otherwise negotiated.
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