A few days ago we talked about the steps to buying a property in Spain if you are an ex-pat, but another very important part of buying a property in Spain is the payment of taxes. Are the taxes the same for residents and non-residents? What taxes do you have to pay when you become a homeowner?

This article will give you all the information you need.

The kind of taxes you will have to pay when buying your new home will depend on whether the property is brand new or second-hand.

If the property is a new build you will have to pay VAT. The rate of VAT is 10% of the property’s value.

If it is public housing, VAT may be 4% depending on the Autonomous Community in which it is located and the type of social housing it is.

As well as VAT, you must take into account another tax: Stamp Duty (Actos Jurídicos Documentados or IAJD) This tax is payable upon the signing of a notarised document which is then registered in the Land Registry.

In the case of second-hand housing, the tax rate varies.

The most significant is the Property Transfer Tax (Impuesto sobre las Transmisiones Patrimoniales or ITP). 

The rate of this tax depends on two factors: on the one hand, the percentage applied to the registered price, and, on the other hand, the community in which the property is located.

The normal rate for this tax is between 6% and 10%.

It is important to remember that in some communities this tax has reduced rates for large families, young people or social housing.

Finally, don’t forget that notary, land registry, mortgage and agency fees must be added to these taxes.

If you have any queries regarding the taxation of your new TM property, please don’t hesitate to contact us.