Once you have chosen your dream home in Spain, our main advice for you is be patient and take into account all additional costs you will have to pay for property transaction. Be patient since you will have to solve some bureaucratic issues first. Open bank account, get your identification number in Spain (NIE), be registered in Spanish tax authorities as tax payer and negotiate with banks in case you are asking for mortgage. All this takes time.
What taxes and fees I have to pay as a purchaser?
Depending on if you are buying new construction or secondhand home, main tax will be:
- 10% VATT, in case you purchase home of new construction
- In case your house is from secondhand property market, the tax to pay is a so-called Tax of Patrimonial Transmission, Impuesto sobre Transmisiones Patrimoniales (ITP). This one can be between 5% and 10%, depending on Spanish Autonomic Community where your house is located.
In both cases, the purchaser has to pay Tax of Documented Legal transactions, Impuesto de Actos Jurídicos Documentados (AJD) that is about 1% of property price. Moreover, the same rate should be applied to the amount your bank lends you in case you ask for mortgage.
Also, take into account fees you will have to pay for property registration and notary costs.
What taxes should I pay as property owner?
Two Town Hall taxes are to be paid on annual basis. They are Property Tax, Impuesto de Bienes Inmmuebles (IBI), and garbage collection. In case the owner is a non-tax Spanish resident and the property is not rented, another tax is for annual payment – so-called Non-resident Income Tax, Impuesto sobre la Renta de No Residentes (IRNR). We also should mention fees for common zones maintenance if your property belongs to the community of owners; these are paid monthly or quarterly.