WHO PAYS WHAT?
The buyer pays:
Property Transfer Tax.
Property Registry Expenses.
Value increase tax (Goodwill)
Real estate agency fees.
TAXES SUBJECT TO THE PURCHASE OF A PROPERTY
When you finally decide to buy the house of your dreams, you should not forget the taxes subject to the purchase of the property. This amount is approximately 10% of the price to be deeded.
We find two types of taxes, depending on the type and circumstances of the property you are buying.
In the case of buying a new construction home through the developer, you will pay a tax called Value Added Tax (VAT) which will be 7% plus 1% of documented legal acts (AJD) or a 16% in lots. These percentages are above the deed price.
In the event that the purchase is on a resale property, you will pay the Property Transfer Tax (ITP) the cure will be 7% of the deed price.
Another tax to pay is the Municipal Capital Gain. This tax is created by the city council, based on the increase in the value of urban land from the day the property was acquired to the time of sale. Mostly paid by the seller. This is a separate tax and is not included in 10% of the deed price.
These fees are collected by the notary for preparing the Public Deed of Sale and for its ratification in the signature. These fees are approximately 1%.
After paying for the property, the notary will give you a simple copy of the deed, it says that you are the new owner of the property. The original deed is sent to the property registry office.
We can put you in contact with Spanish English speaking lawyers who offer very competitive fees.
They offer legal and tax advice on real estate investments, help them with economic transactions between foreign countries or build projects for non-residents.
Attorneys can also organize your non-resident identity number (NIE Alien Identification Number) for you. This document is essential for larger purchases such as a property and for paying taxes.
To request this NIE number, you need a notarized copy of your passport as it is an original copy and fill out a form, which can be downloaded from:
Property Registry Tax
It is approximately 0.5% and is created by the property registry office to register the new deed in your name.
When all this has passed, you will become the new owner.
Mortgage in Spain or at home?
Obtaining a mortgage in Spain has some sales, such as the interests of Spanish banks are changing, but most of the time they are lower than yours. They have favorable conditions and it is easy when it comes to paying taxes. For this reason it is advisable to acquire your mortgage in Spain. Anyway, it is essential to open a bank account, for payments of electricity, water, insurance and in the event that you have bought a property in a complex, for the payment of community expenses. All this can save you a lot of commissions created by international bank transactions.
Do I have to pay a deposit on the property?
It is very common in Spain to pay a deposit, to remove the property from the sale while you organize the entire sale. The standard deposit is 10% on the sale price. In this case, both sign a purchase option contract.
This deposit gives benefits to the seller and the buyer. In the event that you decided not to buy the property, you would lose the 10% delivered, otherwise, if the owner decided not to sell the property, she must compensate you with double the 10% deposited.
Being 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 the loss of time, legal problems or expenses for your heirs since they only have 6 months from the time of death to make the payment of the Inheritance Tax.
TAXES AND EXPENSES FOR ALREADY OWNERS OF A HOUSE
If your property is located in a complex, these community expenses cover the maintenance costs of the common areas, such as the swimming pool, gardens, etc ...
I.R.P.F: Personal Income Tax
This is an annual tax on results