Monday, December 28, 2015

Purchasing: Real Estate in Spain (VI). Taxes on purchasing

Right now our lawyers will cover the taxes on purchasing Real Estate in Spain. Evolutiza Lawyers & Tax Advisors is expert firm on taxes. We are passionate about  taxation and specialist in international issues on this regard too.

In general, the costs associated with the purchase of a property will vary, depending on the price of the transaction. They usually amount to between 10% and 13% of the purchase price, and are as follows:
Notaries’ fees
All notaries in Spain must charge more or less the same rate for the same service, as they are subject to official fare, although the cost of notarial documents varies, depending on several factors such as the price or value of the goods involved in the transaction, the number of intervening parties, the number of pages in the document, etc., which makes it difficult to calculate the final sum of the invoice.
Property Register fees
As with notaries, Property Registrars must keep their fees in line with certain rules that are the same all over Spain.
Transfer Tax (Property Conveyance Tax) and Stamp Duty (for Documentation of Legal Acts)
a)    Transfer Tax
This is only applied to second-hand property purchases (resale) and is paid after the public deed has been signed.
The amount depends on each region, but it is usual that this tax is calculated by stages and determined by the price of the property. Special rules and incentives may be applied in accordance to the current legal frame on the moment of the purchase. The tax is assessed individually, so that these quantities and tax rates refer to the percentage that each buyer has in the purchase.
b)    Stamp Duty
This tax is exclusively charged on the purchase of new housing, not second-hand (as the latter is subject to the Transfer Tax).
The regions or autonomous communities in Spain set reduced tax rates for certain cases, including the acquisition of one’s usual home at a price below 130,000 Euros by individuals under the age of 35, or up to a price of 180,000 Euros if the person acquiring the home has an officially-recognised disability, and the acquisition of social housing for one’s usual home. In general, some discounts and incentives may be applied depending on the region and legal stipulations.
The purchase of new housing is subject to payment of Value Added Tax (VAT).
Other expenses
Apart from those that have already been mentioned, purchasers will need to cover other expenses that, in theory, should not excessively increase the final cost of the purchase operation, and which include the contract and connection fees for utilities and other such supplies, the drawing up of a power of attorney or a will in Spain, and all administrative taxes.

We can help estimating all the cost and taxes linked to the purchase. Our lawyers will always give you an answer.