When purchasing an existing property in Spain, you are liable for transfer tax, known as ITP (Impuestos sobre Transmisiones Patrimoniales). The ITP rate varies by region, or “comunidad autónoma,” ranging from 6% to 11%. Most regions offer discounts in certain situations, such as for large families or young buyers. In addition, ITP is also applicable to the transfer of real estate, usually at a lower rate (e.g., 4%), which varies by region.
If you purchase the property with a mortgage (existing or new), you will need to pay tax for the legal registration of documents, known as AJD (Actos Juridicos Documentados de la Hipoteca), which is a type of stamp duty. The AJD rate ranges from 0.5% to 1.5% of the mortgage amount, depending on the region. If you obtain a mortgage from a bank, they have been responsible for paying this tax since November 10, 2018.
For a newly constructed property, no transfer tax is applicable. However, you will need to pay VAT, known as IVA (Impuesto sobre el Valor Añadido), which is equal to 10% of the purchase price. Transfer tax is applicable to the purchase of building land.
Spanish Transfer Tax (ITP)
The table below provides the ITP rates for the main regions in 2021. Please note that these rates are subject to change, and actual tax payable may differ. The information is sourced from regional websites, which also provide details about any applicable discounts. For example, for a property priced at EUR 350,000, you would pay 10% transfer tax (ITP) in Valencia, amounting to EUR 35,000, while in Andalusia or Ibiza, it would be EUR 28,000.
Payment Method for Transfer Tax (ITP) and VAT (IVA)
You are responsible for remitting the transfer tax (ITP) yourself, as it does not go through the notary. The regional website provides instructions on how to proceed and which documents to submit. In many cases, online processing is also available. If you are working with a representative, they can handle this for you. To pay the tax, you will need a Spanish tax identification number, known as NIE. The tax must be paid within 30 days.
When purchasing a new property, you will pay the VAT (IVA) to the seller or developer, who will then transfer it to the national treasury.
The fees charged by notaries are legally established. The portion of their fees related to the mortgage is covered by the bank. The notary registers the property and the mortgage. You can expect to pay between EUR 1,000 and EUR 1,500 for notary fees and registration costs.
Please note: The information provided here is informative and subject to change. It is recommended to consult official sources and seek professional advice for accurate and up-to-date details regarding taxes and notary costs in Spain.