Property Taxes in Spain: Regional Differences to Know
In Spain, when buying a resale property, a property transfer tax (Impuesto sobre Transmisiones Patrimoniales, ITP) is levied. The rate of this tax varies from region to region and can range from 6% to 10% of the property value. This means that when buying a property worth 200,000 euros in Madrid, you will pay 12,000 euros ITP, while in Catalonia the tax will be 20,000 euros.
Value Added Tax (IVA) when buying property in Spain
When buying a new property in Spain, a value added tax (Impuesto sobre el Valor Añadido, IVA) is charged. This tax is 10% of the value of real estate in all regions of the country. However, when buying land or commercial real estate, the IVA rate can be as high as 21%. This means that when you buy a new apartment worth 300,000 euros, you will pay 30,000 euros IVA.
Tax on legal acts (AJD) in Spain
When buying a new property in Spain, there is also a tax on legal acts (Actos Jurídicos Documentados, AJD). This tax varies from region to region and usually ranges from 0.5% to 1.5% of the value of the property. This means that when you buy a new €300,000 apartment in Madrid, you will pay between €1,500 and €4,500 AJD.
Local taxes when buying property in Spain
In addition to national taxes, property buyers in Spain may also be subject to local taxes. For example, many municipalities levy a tax on the increase in the value of land on the sale of real estate (Plusvalía Municipal). The amount of this tax depends on the location of the property and the duration of its ownership.
When buying property in Spain, it is important to take into account all potential tax liabilities. It is recommended that you contact a professional tax advisor or real estate agent to make sure you are fully aware of all the taxes that you will have to pay. Remember that proper planning and understanding of tax laws can help you save money and avoid unpleasant surprises down the road.
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