Real Estate Taxation Service in Spain
With its beautiful views and rich history and culture, it’s clearly apparent why so many people are choosing to relocate and make Spain their primary residence, to purchase a secondary vacation home here or to purchase a location for their business. At Lusa Legal, we consider ourselves experts in the subject of Real Estate tax in Spain and we are here to assist you in what can often be a confusing and stressful process. Purchasing real estate should be an exciting endeavour and the process of buying a property itself comes along with many of its own concerns. We don’t want taxation to be another burden that you have to deal with. Allow us to help you deal with real estate tax in Spain and provide you with all of the pertinent details that you need to know. The amount of real estate tax Spain, that must be paid, differs depending on whether you are purchasing or selling a property or if the property that you own is generating a rental income.
Purchasing a Property in Spain Tax
When budgeting to purchase a property in Spain, it is helpful to add a minimum of an extra 12% to 15% on top of the purchase price to account for the property tax in Spain that will be applied depending upon whether the buyer applies for a mortgage or not. It is also important to note, that depending on where you are purchasing in Spain, the real estate tax rates may be different, as different regions have slightly different regulations regarding this type of tax.
Depending upon the type of property that you are purchasing, and whether you are resident of the country or not, the following taxes may be required to be paid:
- Value Added Tax (VAT/IVA)
- Stamp Duty Tax (AJD)
- Land Registry Tax
- Property Transfer Tax Spain (ITP)
Selling a Property in Spain Tax
When selling property in Spain tax implications are two main types.
- Capital Gains Tax – the capital gains are tax in Spain on property is calculated on the profit – or positive difference – between the sale price and the original purchase price of the property and is usually 24% for all non EU members and 19% for EU members. When the signing of the deed takes place and seller is not a resident, the buyer of the property is required to retain 3%, of the purchase price, and deliver it to the tax office in account to the capital gain tax to be paid by the seller. In case there is no capital gain, a request for refund of undue income must be done within the following 4 months.
- Plusvalia Tax – Also known as Tax on the Increase of Urban Land Value (IIVTNU). The difference in the cadastral value of the land at the time of the sale and at the moment of acquisition is taxed if the value has increased. This tax is due within 30 days of the closing of the sale of the property and the rate will depend on the Counsel.
Renting a Property in Spain Tax
For foreigners, when renting out a property in Spain for income purposes, the entire amount of rental income earned is fully taxable, with no applicable tax deductions that can be applied. For EU residents and residents of Iceland and Norway, the total amount of rental income must be taxed, however any expenses that have been incurred on the rental property, including the interest paid on the mortgage of the property, may be considered as a tax deduction.
We Will Help You with Real Estate Taxation in Spain
When looking into purchasing or selling a property, you may be wondering how much is property tax in Spain? At Lusa Legal we can answer this question and any others that you may have regarding real estate tax in Barcelona or across Spain. We will also provide you with a full break down on the taxes that you will be required to pay based on the specific area of Spain that you are buying or selling in. Choosing a family home, a vacation property or a new location for your business is an exciting venture and our team of international legal professionals can take the worry and hassle out of the experience for you. Let us handle all of your property tax in Spain needs. Call us today to find out how we can assist you: +34 605 33 60 90.
* Estimated service price, total amount will depend on the particular case and additional services required.
VAT is not included in the price.