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Costs of Property Purchase

In Andalucía.

As a PURCHASER, you will pay a Transfer Tax, Lawyers Costs, and Notary and Registration Costs.

Transfer Tax is 8% (as from 01/01/12 in Andalucia) of the DECLARED PRICE in the new escritura is payable on a resale property, PLUS 9% on any figure over 400.000 € up to 700.000€, then 10% on anything over that. 10% IVA (VAT) and 1% Stamp Duty is payable on a new property and 21% is payable on the purchase of land or garage. If you buy a new property and intend to have a pool or garage built, try and have it included with the sale of the property, as if you build later, you will attract tax at the higher rate of 21%.

Notary Charges These are set on a fixed scale by law and you should expect to pay around 310€ as a minimum. This can rise quite dramatically if loans and mortgages are included.

Spanish Laws state that unless stipulated in the Contract, Taxes and fees are split between the buyer and seller as follows:

Buyer Pays :The transfer tax or IVA, Registration fees & Notary Costs

Seller Pays :Plus Valia tax, which is calculated on the increase in value of the land since the last sale, Notary fees in drawing up the new deeds, often negotiated to be paid by the Purchaser, the estate agent´s fees.

email: info@ helpline-spain.com

Costs of Ownership

By owning a property in Spain, you are obliged to declare the income from its use, or its capital gain, on which you are taxed.

There are annual taxes such as

Wealth Tax,

Imputed Income Tax and, on the sale of the property,

Capital Gains Tax.

There is also

Inheritance Tax to consider.

Wealth Tax.

ABOLISHED FROM 2009

THEN RE-INTRODUCED IN 2011

Called "Impuesto extraordinario sobre el patrimonio", often shortened to Patrimonio. This is a tax on all assets in Spain, and is charged at 0.2% of the Declared value in the deed or the Valor catastral, whichever is the higher by the Autonomous Community in which you live (i.e.Andalucía).

There are differing rates that go from 0 to 167.129 € at 0.2%. between 167.230€ and 334.252 € at 0.30%, etc. etc.If you are a Resident, the first 108.182 €  (18 million pesetas) is exempt from tax. If the property is jointly owned, then each Resident owner can claim this figure against any liable tax. That equates to a tax saving of 216.36 €  (36.000 pesetas) per year, for each resident owner.

No relief is granted to non-Resident owners.

Imputed Income Tax.

This is a real tax based on an imaginary income.

As a Resident, this tax has not been collected since 1999 for your Principal residence.

As a non-Resident, this yearly tax is based on 2% of the assessed value (Valor Catastral) and is charged at 25%. This tax becomes payable after the end of the tax year in question, or by 30th June if more than one property is owned.

Capital Gains Tax.

Capital Gains Tax is (from 01/01/07) paid at the maximum rate of up to 18% for Residents AND non-Residents. This is based on the Declared Value of the property when you sell it. If you are a non-Resident, and have not owned the property since before January 1st ,1987, then the purchaser is obliged by law to withhold 3% of the Declared value against any Capital Gains you have made, and to ensure that at least some tax is paid. The tax is calculated at the same rate as your normal taxable income, but limited to 20% maximum for Residents. Until December 31st 1996 both residents and non-residents could deduct 11.11% per year from their profits after the first two years of ownership, and pay NO tax after 10 years ownership. This has now changed in that all non-residents who bought their property after 31/12/96 will pay the 35% capital gains tax, for which the 5% retention is either whole, part or exceeds the tax that you should pay.

For Residents over the age of 65 years, and where you have lived in the property for at least 3 years, you are completely EXEMPT from Capital Gains Tax. You may also benefit from a scheme whereby you sell your property but retain the right to live in it until your death, and pay a monthly fee for doing so. This is known as "usufructo".

If you are a Non-Resident in the position of Capital Gain that is less than the 3% withheld, you can claim this back.

If you are Resident and intend to re-invest the whole proceeds of the sale in a new purchase for your Principal Residence, then there is no Capital Gains Tax. You have 3 years to carry this out to obtain the tax relief.

OnBalance