Expenses and taxes
The buyer, in addition to the cost of real estate, bears a number of expenses. Depending on who the property is purchased from, the developer or a private person, VAT (IVA) and stamp duty or transfer tax are paid accordingly.
Next, we consider these situations in more detail and indicate the total costs for both situations.
New housing from the developer
VAT and stamp duty (IVA & Actos Juridicos Documentados - AJD)
These taxes are paid if the property is acquired in the primary market, i.e. real estate is being sold for the first time, and the seller is a construction company.
From January 1, 2013 VAT is 10% of the value of the object.
The tax on new housing, if it is purchased not for the main permanent residence (less than 6 months a year) - 1.5% or 0.1% - if purchased for the main housing (minimum 6 months a year).
Real estate in Spain, put up for sale in the secondary market, is taxed on property transfer tax (ITP), from August 10, 2013 ITP is 10%.
Resale property from a private and legal entity
Transfer Tax (Impuesto sobre Transmisiones Patrimoniales - ITP)
The transfer tax is paid if this is not the first transfer of ownership of the property. Since August 10, 2013, the transfer tax is 10%. The transfer tax will be borne by the buyer. The tax is paid within 30 business days if the property is purchased without a loan. If the purchase of real estate is made on credit, then the transfer tax must be paid in full from the entire amount exactly at the time of purchasing the real estate.
Also, 10% is paid when acquiring land without buildings by an individual from an individual.
When buying commercial real estate, if the buyer is an individual and real estate (land or building) not purchased in the primary market, property transfer tax is paid, which is 10%.
In the case when the seller is a legal entity, it is necessary to consider each case separately. There is an option that there will be a 10% tax on the transfer of property, or as an option - sale on the invoice with VAT - 21%.
Real estate sold between legal entities can be registered with 21% VAT and the buyer company will be able to return the amount of VAT.
By internal agreement between the companies there may be various ways of making a transaction.
When buying a secondary property without a mortgage, the buyer has 30 days to pay a 10% purchase tax.
Real estate acquisition from a non-resident of Spain
In the case when the seller is non-resident in Spain, the buyer needs to keep the security in the amount of 3% of the value of the object and transfer them to the tax office.
It turns out that the seller, if he is a non-resident of Spain, does not receive 3% of the sale amount, but if the owner did not receive income when selling the object, that is, the purchase price of this object and its sale was the same, then he has the right to return it within four months withheld 3% if he paid non-resident tax.
In the event that there is still profit from the sale of the object, a tax of 21% of the profit is paid.
If this is not done, then the tax authorities will consider this property as an asset, which provides for the tax obligations of the seller to pay tax on capital growth.
Other expenses common to both cases
Agency Commission
The commission is paid to the agency by the seller, unless otherwise agreed before the transaction.
Lawyer Compensation
We highly recommend hiring a lawyer when buying a property. The lawyer draws up and checks the contracts for their compliance with your interests, and can also clarify all legislative and administrative issues that have arisen. The lawyer conducts all necessary checks on the property (ownership of the seller and previous owners, all permits, absence of arrests, etc.). The lawyer organizes the collection of all necessary documents necessary to complete the purchase and sale transaction (registration of real estate, repayment of tax obligations, etc.).
The fee of a lawyer or in Spanish Abogado depends on the volume of services provided and on the complexity of the transaction. The services of most lawyers in Spain are approximately 1% of the purchase price. Some lawyers disclose the cost of their services at 1.5% or more percent, this is definitely expensive. Our lawyers charge a fee of 1% for all necessary actions to complete the transaction and prepare all the necessary documents.
Mortgage Cost
If the property is purchased on credit, then some additional costs are added. Firstly, the bank or credit institution where the loan is issued will require an assessment of the property paid by the buyer. The cost of the assessment is from 200 to 600 euros. Secondly, mortgage expenses, which vary depending on the lender. Ultimately, the loan will increase the value of the object, and, consequently, the cost of notary services.
Raskh