EXPENSES AND TAXES DERIVED FROM THE PURCHASE TRANSACTION
Once you have reached an agreement with the seller on the purchase price, you must still take into account a number of additional costs, taxes and expenses related to the process of buying the property.
Knowing exactly and in detail each of the tax obligations depends on many factors, since, as you will see, even by regiones the additional costs differ.
Therefore, the expenses to be paid are the following:
1.- THE PRICE agreed with the seller/builder
2.- TAXES, which are different depending on whether they are
– Purchase of New Construction
– Resale/Second Hand Purchase
3.- OTHER EXPENSES, as Notary and registration fees, lawyers, NIE, legal study expenses, etc.
TAXES ON THE PURCHASE OF NEW CONSTRUCTION
The taxes derived from the purchase of a new construction property are 2:
– VAT (Value Added Tax)
– AJD (Tax on Documented Legal Acts)
VAT – VALUE ADDED TAX
It is an estate tax, and is paid directly to the builder/developer. VAT is included in each of the payments to be made to the builder.
Quota:
- 10% for residential properties and garages directly attached to the house
- 21% for the rest
- 0% if the acquirer is a Spanish registered company to be used for business activity (investment, office, rental, etc.).
AJD – TAX ON DOCUMENTED LEGAL ACTS
Regional tax. It is paid to the Autonomous Communities immediately after completing the purchase.
Quota:
Purchase natural person:
- MADRID: 0.4% -0.75%
- BALEARIC ISLANDS: 1,5 %
- MURCIA: 1,5 %
- CATALONIA: 1.5%
- ANDALUSIA: 1,2 %
- CANARY ISLANDS: 1 %
- VALENCIA: 1.5% (0.1% if intended for habitual residence)
Purchase through a Spanish registered company for business activity: 2 %
TAX ON THE PURCHASE OF RESALE PROPERTIES BY REGIONS – ITP
The Tax to be paid is the “PROPERTY TRANSFER TAX“. This is a regional tax, which must be paid immediately after completing the purchase.
It is a tax whose quota varies according to the different regions of Spain:
- BALEARIC ISLANDS: 8-11 %
- MADRID: 6 %
- MURCIA: 8 %
- CATALONIA: 10 % or 11 % for more than EUR 1 M
- ANDALUSIA: 7%, or 6% if habitual residence
- CANARY ISLANDS: 10 %
- VALENCIA: 10 %
OTHER EXPENSES RELATED TO THE PURCHASE:
In addition to the taxes derived from the purchase, you must pay other expenses, which are the following:
– Legal expenses: Notary, land registry, lawyer, occupancy license, changes of supplies 2-4%
– Professional expenses: Real estate agent, architects, etc.
EXAMPLE OF EXPENSES AND TAXES VALENCIA
| NEW CONSTRUCTION | 300.000 | RESALE | 300.000 |
| VAT 10 % | 30.000 | ITP 10 % | 30.000 |
| AJD 1.5% | 4.500 | LEGAL EXPENSES | 7.500 |
| LEGAL EXPENSES 2,5 % | 6.000 | AGENCY COMMISSION | TO CONFIRM |
| AGENCY COMMISSION | TO CONFIRM | ||
| TOTAL EXPENSES | 40.500 | TOTAL EXPENSES | 37.500 |
| PRICE+EXPENSES | 340.500 | PRICE+EXPENSES | 337.500 |
NEW! SIMULATOR OF TAXES+EXPENSES + MORTGAGE CALCULATOR
We have created a Simulator/Calculator of expenses and costs which helps you to know the approximate amount to pay on top of the price.
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- DO NOT NEED TO REGISTER TO USE IT
- It helps you to CALCULATE TAXES and EXPENSES, for both: New Buildings and Resales
- It considers the DIFFERENCES in TAXES on the different Spanish regions
- It helps you to CALCULATE THE AMOUNT OF PRIVATE FUNDS you need to buy a property with a MORTGAGE
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