Do not panic. Spain is not one of the countries in Europe with the highest tax burden, but you should know that the taxes and expenses related to the purchase of a property will raise the price that you will finally pay between 10% and 15%.
Property Transfer Tax (ITP)
You will have to pay the Property Transfer Tax, which will depend on whether the property is new or second-hand. If it is a used home the ITP is equal to 10% ( see recent changes in the law that have lowered this to 7% ) but if it is a new house you must add an additional 1.5% for property registration. Young people under 32 years pay half the ITP, 5%.
The set of expenses and taxes that you must pay when buying a home in Spain as an expatriate or foreigner are the following:
TAXES
VAT (Value Added Tax)
If it is a new house the VAT will be 10% of the price. The acquisition of a home under construction is taxed at 21% VAT. VAT is paid at the time of signing the deed of sale.
Tax on Documented Legal Acts (AJD)
Applies to new homes. The percentage differs in each autonomous community. In Andalusia it is 1.5%.
However, you can benefit from a reduced rate of 0.3% if you are under 35 years old and the property is used as the buyer's habitual residence, as long as its real value does not exceed € 130,000.
If the property you acquire is for a habitual residence and its amount is less than € 130,000, you will benefit from a rate of 1.2% regardless of your age.
If you have a declared disability equal to or greater than 33% and the price of the property is less than € 180,000, the rate that will be applied to you is 0.3%.
If you are a large family and the price of the house does not exceed € 180,000 there is also a reduced rate.
Capital Transfer Tax (ITP)
It is paid if the property you are going to acquire is second hand.
It is a progressive tax that depends on the price of said property. In Andalucia it is 7% for homes up to € 400,000. 9% when the price of the house to buy is between € 400,000 and € 700,000. 10% for properties of € 700,000 onwards.
This tax is paid in full after signing the public deed.
If you pay ITP you don't have to pay the AJD.
EXPENSES
Notarial charges
You will require a notary to formalize the sale of the property you are going to acquire. He is the one who writes the public deed and that service has a cost.
However, this cost fluctuates depending on the needs of each case. For example, aspects such as whether you need to request a mortgage, the sale price of the property or the fees of the notary of your choice influence the calculation of notarial expenses.
In general, notary fees range from € 500 to € 1,000.
Property registration
Once the deed is signed, it must be registered in the Land Registry. The cost will depend on the purchase price declared in the public deed. The cost of the service can be between € 300 and € 500.
Legal assistance expenses
Having the services of a specialized professional to assist you throughout the process is an investment that pays off, especially if you are a foreigner and not used to the operation of the Spanish system. This will entail an expense that will depend on each professional. Our real estate specialists can offer you this service and accompany you throughout the process so that your purchase of a home in Andalusia is a satisfactory satisfactory experience.
Money transfer from another country
You may have to transfer money from your home country to Spain to pay for the property. If this is the case, keep in mind that this operation involves a commission. Its cost will depend on the service provider you choose.
Remember. Telework Andalucia wants to make your life easier. We will be happy to help you with the entire process of buying your new home. Contact us.
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