The corresponding taxes involved in the purchase process will vary according to the type of the property, the amount of the sale price and the seller’s condition.
The Patrimonial Transfer Tax (ITP): This tax will always be paid by the buyer for the acquisition of any type of property, but it will not be applicable in properties of first transmission and in which the seller is a developer or a company whose corporate purpose is the promotion and sale of real estate. The applicable percentage will vary depending on the purchase price of the property and will be according to sections. The first tranche is 8% and will be applicable up to the amount of € 400,000. The second tranche is 9% and will be applicable to the amount between € 400,000 and € 700,000. The third tranche is 10% and will be applicable to any amount higher than € 700,000. Exceptionally, in the purchase of garages that are independent registry properties of the dwelling, the instalments will be of 8% up to the amount of € 30,000, of 9% to the amount comprised between € 30,000 and € 50,000 and of 10% to any amount more than € 50,000.
The Value-Added Tax (VAT): This tax will always be paid by the buyer for the acquisition of any type of property, but it will only be applicable in properties of first transmission and in which the seller is a developer or a company whose corporate purpose is the promotion and sale of real estate. The applicable percentage will vary depending on the type of property. For the acquisition of brand new properties, such as an apartment, a chalet, a storage room or a garage that are not separate registry properties of the home, the applicable percentage will be 10% of the purchase value. For the acquisition of commercial premises, plot of land, storage room or garage that are independent registry properties of the dwelling, the applicable percentage will be 21% of the purchase value.
The Documented Juridical Acts (A.J.D.): This tax will always be paid by the buyer for the acquisition of any type of property and also by mortgage constitution. With a few exceptions, the percentage applicable in the Autonomous Community of Andalusia is between 0.5% and 1.5% of the purchase price.
In the case of a mortgage, the following fees associated with the mortgage should also be considered:
- The valuation before the mortgage process, will be paid to the company that took over the paperwork. Its amount varies according to the square meter of the property.
- The property register. In addition to the title deed of sale, the mortgage must be added too.
- The process of a mortgage loan entails a banking tax (AJD), the amount of which varies according to the Autonomous Community and is between 0.5 and 1.5% of the mortgage guarantee.
- The opening fee that is requested at the time of borrowing and covers the costs of analysing the possibility of the transaction faced by the financial institution.
- Damage insurance. The law requires the bank to ask the loan applicant to sign insurance that covers the value of the property.
Notary expenses are those that are produced by the execution of the public title deed. The costs of the notary are set by regulations and their amount depends on the amount of the property, although this amount can be increased by different aspects: the number of copies of title deed, number of pages, presentation process in the Land Registry, etc. The notaries apply a fixed tariff established by the government in 1989, so all notaries in Spain charge the same for the same service. The following table will help you calculate notary expenses, warning you that it is only an indicative table and that we cannot be held responsible for any changes that may occur in the rates.
Registration fees in the Land Registry.
The expenses of the registration process of a property are the fees generated by registering the public deed in the property register. These fees are also fixed by regulations and their amount depends on the price of the property. The following table will help you calculate the registration fees, warning you again, that it is only an indicative table and that we cannot be held responsible for any changes that may occur in the rates.
Tax identification number (NIF) and (NIE).
In Spain, each person is assigned a tax identification number that must be recorded in the tax declaration and in the communications addressed to the Tax Administration and is the only identification document necessary to sign deeds of sale. In the case of persons of foreign nationality, the NIF is Identification Number of Foreigners (NIE). The processing of these identifications is done in the office the National Police. Foreigners who do not have an NIE, must request the assignment of a NIF when they go to carry out transactions with tax implications such as the signature of Deeds of Property.
When you are decided on the purchase of a property we suggest opening a bank account in a Spanish entity. You will need it to carry out the purchase and to pay the future maintenance payments of your property and the I.B.I (the property tax).