COSTS WHEN YOU BUY

Taxes when buying a second hand - or resale - property

In the UK there is Stamp Duty and in Spain the equivalent is a Transfer Tax. Generally resale property bears a charge of 7% Transfer Tax but is exempt from VAT. The tax is paid to the Spanish tax authorities.

Taxes when buying a new property

New property is subject to VAT. VAT is known as IVA in Spain and is applicable to the sale of all new property. There are different ratings which are as follows:

16% - Plot only when buying from a developer

7% - Plot with construction*

7% - New ready-built properties

Transfer Tax is not paid on new property although a duty of 1% is imposed when a newly built property is declared on a plot. Therefore in the majority of cases the total tax paid on new property is 8%.

*Assuming that the landowner is the same as the developer.