Anyone who has owned a property in another country will be aware that there are (unfortunately!) a number of taxes and charges relating to home ownership that must be paid. In general the principal taxes or charges in Spain can be grouped as follows:
- IVA (VAT)
- ITP (Impuesto Transmision Patrimonial)
- IBI (Impuesto de Bienes Inmuebles)
- Plusvalía tax
- La Comunidad
- Other Charges
We have already looked at IBI in other articles so what follows is a brief summary of IVA and ITP which are among the principle taxes which will have to be dealt with after purchasing a property in Spain.
IVA (Impuesto de Valor Añadido – VAT)
The purchase of a new property in Spain currently attracts a VAT rate of 8%. IVA is paid instead of ITP below as the vendor is a company (the promoter or constructor). The buyer of the property pays the tax directly to the promoter of the development or urbanization together with the monies to pay for the purchase of the property and the promoter is responsible for passing it on to the government in the usual way.
ITP (Impuesto Transmision Patrimonial)
The purchase of a second-hand property in Spain from another individual (as opposed to a legal entity such as a company) attracts ITP tax which varies across Spain but is typically between 7% and 8%. The reason the tax rate varies is because it is set by the regional rather than central government. At the moment it seems that regions which are run by the current state government socialist party charge 8% whereas areas run by the opposition PP party charge 7%. The tax should be paid within one month from having purchased the property at the local tax office and it is the responsibility of the purchaser of the property to ensure that this is carried out.
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