Taxes & Fees
The costs associated with the acquisition of a property in Spain may be split up in one-off taxes and fees due at the signing of the conveyance and recurring payments.
Once-Only Payments when Buying a Property
- Lawyers charge a fee equal to 1% of the purchase price for their title search and due diligence report.
- Notary & registration fees are between 02% and 0.4% of the purchase price and are regulated by law.
- On resale properties a transfer tax (ITP – Impuesto sobre Transmisiones Patrimoniales) is levied at the following rates:
Transaction value Tax rate
- On new buildings a VAT (Value Added Tax) rate is applied of 10%.
- Stamp duty – A stamp duty of 1.5% is owed at the signing of the conveyance and is only applied to new buildings.
Recurring Taxes and Fees
- IBI (Property tax) – Municipalities charge an annual property tax (IBI – Impuesto Bienes Imuebles). The rate varies from one town to the next and fluctuates between 0.4 and 1.1% of the cadastral value. Vendors will provide prospective buyers with their last IBI statement which shows the exact taxation rate as well as the property’s cadastral value.
- Basura (Garbage collection tax) – Varies across municipalities. This tax is assessed on a property’s cadastral value.
- Community fees – Properties that are part of an estate (urbanización) are assessed an annual fee to cover the upkeep of shared facilities. The height of these fees is determined by the Owners’ Association and depends on the level of services provided.
- Non-resident income tax – Spanish tax authorities assess non-resident homeowners with a deemed annual income equal to 2% of the cadastral value of their property. Over this amount, an income tax of 24.75% is charged. Rental income is taxed at the same rate, though during the rental period you are not liable for the assessment of the 2% deemed income.
- Wealth tax – An exceptional and temporary tax is being levied on properties at a rate varying between 0.2% and 2.5% of the net asset value. Both residents and non-residents alike are exempted from paying wealth tax over the first €700,000 of their property’s net value.