What taxes do you have to pay for selling selling or buying a property in Spain?
When a person, whether Spanish or foreign, makes the decision to buy a property in Spain, it must be clear that not only must the price of the house be paid, but also other compulsory expenses such as the house valuation or the taxes payable for this transaction. Both the national citizen and the foreigner pay exactly the same taxes for buying a property in Spain.
The difference comes from the taxes payable on the sale. The non-resident foreigner will have to pay the Non-Resident Income Tax (IRNR). And in the event that the foreign seller is not in Spain, as an exception, the municipal added value tax (plusvalía) will have to be paid by the buyer.
Taxes levied on selling a property in Spain:
Non-Resident Income Tax (IRNR)
The tax reform that has been in effect since last January 1st affects the non-resident as another citizen, as it has brought changes in the IRNR. Monetary adjustment coefficients have disappeared, which served to correct the effect of inflation on the value of real estate, which means that the fact that a euro today is not worth the same as ten years ago it will no longer be taken into account.
The tax rate that non-residents apply to the transfer of real estate in Spain in 2015 will be 20% and in 2016 it will be 19%.
Municipal added value tax
The Tax on the Increase of Urban Land Value (IIVTNU), better known as the municipal added value tax (plusvalía) is another of the taxes that any foreigner who sells his property in Spain has to pay, like any other citizen. The sale of real estate also generates the municipal added value tax due to the increase in the value of the land.
That is why you have to find the difference between the value of the land at the time of sale and that of the moment of acquisition. The tax will be applied on this difference of value, depending on the municipality/city where the house is located. It must be paid within 30 days of the close of sale.
Taxes when buying a property in Spain:
The tax levied on this property is 10% VAT. Therefore, on a 250,000-euro house, the tax will be 25,000 euros.
The tax levied on this type of property in Spain is the Transfer Tax (ITP) and varies depending on the Autonomous Community but varies between 5% and 10% of the notarised price (between 12,500 and 25,000 euros for the previous example). It should be remembered that the Tax Authorities can claim a higher payment from the buyer if it considers that the home is worth more than what has been paid for it. The tax authorities of each Autonomous Community have minimum price tables and so calculate the minimum Transfer Tax (ITP) that a person must pay when buying a property in Spain.
Documented Legal Acts Tax (AJD)
The purchase of both new and used housing in Spain, if made by mortgage, is subject to the payment of another tax, on Documented Legal Acts (AJD), which represents about 1% of the notarised value of the sale and another 1% of the notarised amount of the mortgage.