Preguntas Frecuentes sobre la Compra Venta de Inmuebles

FEES CONNECTED WITH BUYING A PROPERTY

When you have finally decided on the home of your dreams, you should not forget the fees connected with buying this property. This amount will be approximately 10 % of the "declared" purchase price.

What taxes are due to purchase a property?

There are two different taxes, depending on the type and circumstances of the property that you are buying.

In case of purchasing a newly built property from a developer you pay VAT called " IVA : Impuesto sobre el valor añadido", which will be 7 % + 1 % Stamp Tax of the contract price or 16 % on land.

When you are purchasing a resale, you will pay a transfer tax called " I.T.P - impuesto de transmisiones patrimoniales ", which is charged on 7 % of the declared price.

Another tax that has to be paid is the Municipal Plusvalia. This is a tax set by the local Town Hall and based on the increase in the value of the land and property from the date the owner acquired the property to the time of the present sale. Mainly paid by the seller. This is a separate tax, and is not included in the 10 % of the purchase fees.

What are the additional fees?

The Notary Fees

These fees are collected by the Notary for preparing the Title Deed called "Escritura Pública de Compra/Venta" and presiding over of the signing. The fees will be approximately 1%.

After purchasing the property, the notary will give you a copy of the deed (Escritura) which says that you are the new owner of the property. The original deed will be send to the Land Registry Office.

The Lawyer Fees

We can put you in touch with a Spanish lawyer English speaking who will charge a competitive rate.

They can give you legal and fiscal advice on real estate investments or help you with economic transactions with foreigh countries or project development of non residents.

The lawyer can also arrange a Foreigners Identification Number called " NIE - Numero de identificación para extranjeros " for you. This document is essential for major purchases like buying a property and tax payments.

To apply for the NIE, you need a photocopy of your passport, confirmed by a notary that it is an original copy and a form, which can be downloaded at:

www.crm.es/VisitorsOnly/Documents/ex14.pdf

The Property Register Fee

Approximately 0,5 % is charged by the Land Registry Office called " Registro de Propiedad " to register the new deed (Escritura) into your name.

When this is completed, you are lawful the owner of the property.

Mortgage in Spain or at home?

Getting a mortgage in Spain has some advantages, like the interest rates in Spanish Banks are varying, but most of the times lower than at home, it has favourable write off conditions and it is easier for paying taxes. So it is recommended to take a mortgage in Spain. Anyway you have to open a Spanish account for the fixed costs, like water, electricity, insurances and in case you bought a property in a complex, the communal fees. It can save you a lot of commissions caused by international bank transactions.

Do I have to pay a deposit on a house?

It is quit common to pay a deposit in Spain, to remove the property of the market while you are arranging the legal part. The standard deposit is 10 % of the purchase price. In this case both sign an Option Contract (Opción de Compra).

The deposit has advantages for the buyer as well as for the seller. In case you decided to pull out of the deal you lose the 10%. On the opposite, if the owner pull out of the deal he has to compensate double the 10 % of the deposite.

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SPANISH WILL

As a foreigner with property or assets in Spain it is recommended to make a Spanish will, only for your assets in Spain. This will avoid time-consuming, legal problems and costs for the heirs as they have 6 months from the date of death to meet the payment of inheritance tax (Ley de Impuesto de Sucesiones).

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TAXES AND LIVING EXPENSES FOR PROPERTY OWNERS

Community Fees

If your property is on a complex, these fees cover the costs of shared facilities, such as swimming pool, garden, etc.

Inputted Income Tax
(I.R.P.F : Impuesto sobre la Renta de las Personas Fïsicas)

This is an annual tax on an imaginary income resulting by virtue of ownership of a property and is charged as 0,5 % of the catastral value. If you are a resident you will not be charged this on your principal home.

If you are non-resident in Spain for tax purposes, you will be taxed on any income arising from a Spanish source. If you let your property in Spain, any declared income arising will normally be charged at 25 % as Income Tax. Even if you do not let the property, the income that has to be declared is 2 % of the catastral value of the property.

Wealth Tax
(I.T.P : Impuesto sobre transmisiones Patrimoniales)

This is a direct tax levied on your assets and property located in Spain. The value of the house to be declared is the official cadastral value, which can be found on any IBI* receipt. The amount you have deposit on a Spanish bank is the average cleared balance over the previous year.

Tax rates are progressive depending on the type of property, are set to 0,2 %. For superior values the rate increases gradually.

Property Rates
(*IBI : Impuesto sobre Bienes Inmuebles)

This tax is levied by the local Town Hall and is paid annually. It is based on the fiscal or rateable value, the valor catastral, of the property, and takes into the value of the land plus the value of the building, according to type, location and usage. Upon this value, each municipal Town Hall decides on the percentage to be charged in respect of the local rates.

Capital Gains Tax
(Impuesto sobre Incremento de Patrimoniales)

Capital gains due with the sale of a property and the tax is calculated as the difference between the value of the property at the time of its acquisition and the value at the time of its sale, so over any profit you have made. The tax rate is 35 % for non-residents, but only 20 % for residents. A further concession for residents is that if you are over the age of 65 and have lived in your property for at least 3 years, you are totally exempt from capital gains tax.

House Insurance

Fire insurance (Seguro de encendio): Compulsory by law, when you are taking out a mortgage.
In case of some property owners associations, community fees might include limited coverage on the building and community property.

Household insurance (Seguro de hogar): A comprehensive insurance available to project your home and contents.

Life insurance (Seguro de vida): Can be taken out to guarantee payment of the loan in the case of death.

Electricity and Water Charges

Paid every two months and it has a maintenance cost.

Rubbish Collection (Basura)

This is approximately € 60 per year.

Telephone

The installation charge is approximately € 180.

Fiscal Representive ( Gestor )

If you are non-resident you will need a Gestor to manage your tax return. The cost is around € 60.

What is the differnce between the Catastro and Registro de Propiedad?

The Catastro is part of the Spanish Ministry of Finances (Hacienda) and the official name is "Centro de Gestión Catastral". Mostly situated in the same building as the Hacienda. The Catastro registered the property (like description of the property, sizes, location, boarders, destiny, quality, value, etc...)

The Registro de Propiedad is mainly operative for the registration of the owners of the property.

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