THE PURCHASING PROCESS

Taxes when buying

1.Property Transfer Tax

(Impuesto de Transmisiones Partrimoniales – ITP) / VAT (Impuesto sobre el Valor Añadido, IVA)

If you are buying a resale property your transfer tax will amount to 7% of the purchase price.

But If you are buying off-plan, purchasing directly from the developer, you also pay 7% of the purchase price, but this is charged as VAT (IVA) & stamp duty of 1%.

2. Municipal Tax on Property Sales (Plus Valía)

This tax is paid to the local administration ( Townhall ) and is based on the increase in the value of the land since it was last bought. Logically, as the beneficiary of this increase in value, the seller usually takes charge of paying the Plus Valía. However, some Sales Contracts stipulate that the buyer is responsible for meeting this expense. This is an important issue during negotiations over the terms and conditions of the Sales Contract and it is essential to consult your lawyer before making any agreement on this point.

If you finally agree to pay the Plus Valía you will find that it is based on the official value of the land, which is always lower than the actual market value. The tax is charged at between 10% and 40% of the annual increase in the value of the land. The exact percentage depends on a number of factors including the location of the property and the length of time between sales. Local authorities periodically carry out valuations of land and maintain up-to-date records in order to calculate Plus Valía charges.

PREV.     NEXT

1. Finding a Property.
2. Real Estate Agents.
3. Choosing a Lawyer.
4. Negotiating the purchase.
5. The Reservation Contract and Deposit.
6. Exchange of Private Purchase Contracts.
7. Completion.
8. Registry.
9. Special Considerations when buying Off-Plan.
10. Fees when buying.
11. Taxes when buying.
12. Other Expenses.
13. Differences between the contract price & the amount actually paid.

Selling

1. Real Estate Agent & Lawyer.
2. Fees when selling.
3. Taxes when selling.

Charges Taxes & Expenses for Property

1. Service Charges in Communities.
2. Annual Real Estate Tax. ( IBI )
3. Rubbish Collection Tax.
4. Capital Assets Tax.
5. Property Owners’ Imputed Income Tax.
6. The Tax Returns.
7. Insurance.
8. Mortgages.

Other Legal Matters

1. NIE – Identification number.
2. Open Spanish Bank Account.
3. Making a will in Spain.
4. Inheritance Tax.
5. Investment Opportunities on Spain.

C/Alfonso XIII, Edif. Terminal I, 2 nº5, 29640 Fuengirola, Malaga.

Tel: +34 952 58 57 21 Fax: +34 952 19 71 47

Web.: www.lawyerscostadelsol.com  E-mail.: info@navarrete.dk