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Purchase costs & Taxes - Buying a property in Spain
AMENDMENT NOVEMBER 2021
LEGAL REPORT ABOUT THE NEW ACT OF CEDED TAXES OF ANDALUCIA.
The Andalucian Parliament has approved a new Act about the Ceded Taxes of Andalucia which means reductions in the tax rates and new deductions in different taxes like the Property Transfer Tax, the Stamp Duty, and the Inheritance Tax.
a) Property Transfer Tax and Stamp Duty Impuesto sobre Transmisiones Patrimoniales and VAT.
Actos Juridicos Documentados:
In the case of the Property Transfer Tax, taxation will be for a single rate of 7%.
In the option of Stamp Duty Tax, the tax rate will be 1.2%.
The Property Transfer Tax for the purchase of habitual residences with a value of less than €150,000.00 has been lowered to 6% tax.
The price limit for applying the benefit in the reduction of the tax rate when the purchaser of habitual residence, will be increased from €180,000.00 to € 250,000.00.
b) Inheritance Tax.
The Inheritance tax is also being changed in some respects. Thus, pre-existing patrimony of the heirs will not be taken into consideration and the coefficients will not generally exceed 45%.
Partners or de facto unions are fully equal to spouses, as long as they are duly registered in the Official Registers.
Inheritances in favour of siblings, aunts, uncles and nephews, which until now could pay a tax rate of 70%, are reduced to the maximum limit of 45%.
When the inheritance received is a habitual residence, the tax scale is changed from 95% to 100% depending on the value of the property to a single rate of 99% in all cases.
The reductions in the economic donation to descendants for the purchase of their habitual residence will also be made more accessible. It will no longer be a requirement to be the buyer's first habitual residence in order to apply the benefit. The limit to which it applies increases from €120,000.00 to €150,000.00 at a general level and from €180,000.00 to €250,000,00 when the donation is made to a person with a disability.
In the process of buying or selling a property, you will need to complete a series of procedures
involving various documents that must be submitted to different authorities in order to comply
with both tax and non-tax obligations.
All homes sold are subject to Property Transfer Tax and Stamp Duty.
• Information on Property Transfer Tax and Stamp Duty
The tax base for this tax is the value of the property transferred. In the case of homes, this will
be determined by the reference value established by the Cadastre or that declared by the
interested parties (sale price), whichever is higher. If the property does not have a reference
value determined by the Cadastre, the value declared by the parties will be used, which is
subject to verification by the Administrational in some cases.
PLUSVALIA TAX
Please note that, in principle, the so-called capital gains tax (the tax on the increase in value of
urban land) must be paid by the seller, to the Town Hall.
There are different types of taxes that you may have to pay depending on the characteristics of
the property.
FIRST TRANSFER
If it is the first transfer (newly built properties), you must pay Value Added Tax (VAT). The VAT
applicable to new properties is 10%. In addition, the formalisation of the purchase contract
eeds) in a public document is subject to Property Transfer Tax and Stamp Duty, in the form
amp Duty (1.2% in Andalucia's region).
SECOND AND/OR SUBSEQUENT TRANSFERS
In the case of second or subsequent transfers, the buyer does not have to pay VAT, but rather
Property Transfer Tax and Stamp Duty, in the form of Transfer of Property. Currently, the tax in Andalucia is 7% tax.
In Andalucia's region you have two months to pay the tax after the signing of the tittle deeds.
What is the reduced rate for properties used as primary residences in municipalities with
depopulation problems (fewer than 3,000 inhabitants) and what requirements must be met
for it to apply in PO? (property transfer tax)
From 27 October 2021, persons purchasing a property located in a municipality with
depopulation problems (fewer than 3,000 inhabitants) and intended to be their habitual
residence may apply a reduced tax rate of 3.5%, provided that the value of the property does
not exceed €150,000.
What is the general reduced rate for home purchases and what requirements must be met to
apply it in property tax?
Individuals purchasing a property to be their primary residence may apply a reduced rate of 6%
provided that the value of the property does not exceed € 150,000 for taxable events occurring
on or after 27 October 2021.
This is applicable to residents in Spain!
PLUS VALIA TAX PAID TO TOWN HALL (AT THE SELLER'S COST)
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The information above is provided to Spanish Property Choice by a 3rd party source.
It is important for you to clarify the purchase costs prior to any offers on a property. Spanish Property Choice cannot be held responsible for any matter related to this information provided on here as general advice!
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