NEW BUILD/OFF PLAN: IVA (VAT) equivalent to Transfer Tax at 7% on the purchase price.
RE-SALES AND PARCELS OF LAND (Urbana & Rural) : Transfer Tax at 7% on the purchase price declared in the public title deed (escritura de compraventa). In the case of residents, or Spanish nationals, if the purchase is as a permanent home, the value of the property is under 130.000 Euros and the buyer is under the age of 35 years, the Transfer Tax is reduced to 3.5% of the declared price.
NOTARIAL DOCUMENT TAX is 1% on the declared value with a reduction to 0.3% in the case of residents or Spanish nationals fitting the same criterion as above.
NOTARY'S FEES depend on the value declared in and the number of pages of the public title deed. On a declared price of 60.000 Euros the fees will be about 400 Euros and on a price of 184.000 Euros they will be about 1000 Euros.
PROPERTY REGISTRY FEES again depend on the value declared. On a declared price of 60.000 Euros the fees will be about 130 Euros and on a price of 200.000 Euros they will be about 300 Euros.
PLUS VALIA is a sales tax payable to the Town Hall on the increased value of the land (not the building) since the property last changed hands. Each Town Hall adopts its own percentages according to the number of years between the purchase and the sale and a specific calculation is made in each case and it is not possible to give an estimate in advance. It must be paid within one month of completion of the purchase buy the seller of the property and not the buyer as can occasionally be implied.
LEGAL FEES must be agreed in each case between the client and the Spanish lawyer (Abogado). Allow between 1% and 2% of the purchase price for the Abogado's fees.
CAPITAL GAINS TAX From the 1st of January 2007 a non-resident owner of property in Spain is liable to Capital Gains Tax on sale. The buyer on completion must retain from the purchase price and pay to the Spanish Tax Authority (Hacienda) 3% of the declared value as a guarantee of the seller's Capital Gains Tax liability, calculated at 18% on the difference between the declared value on sale less expenses and the declared value on earlier purchase less expenses.
RESPONSIBILITY FOR PAYING the purchasing costs and taxes as above can be either:
(a) by agreement between the parties specified in the contract for sale; or
(b) according to Spanish law, with the seller paying the Plus Valia and approximately 75% of the Notary's Fees and the buyer paying the rest.
N.B. On completion of their purchase, all owners of property in Spain are liable to pay Wealth Tax (0.2% annually of all assets in Spain ) and Income Tax.
AS A RULE OF THUMB, prospective purchasers of property in Spain should allow 12% above the purchase price to cover all Spanish purchasing costs and taxes and the fluctuation in value between the Pound Sterling and the Euro's