Property taxes in Spain
Tax on new developments in Spain
The VAT (IVA) on new developments is 10% based on the purchase price. Then add another 1% of the purchase price for stamp duty. These taxes are paid by the buyer and are paid at the time you pay the deposit for the property you want. .
Here are some examples of new developments that might be of interest to you
ITP tax for second hand properties
If the property you wish buy in Marbella has been lived in before, then you pay a tax for the transfer called Impuesto Sobre TRANSMISIONES Patrimoniales or ITP. In this case there is no VAT or stamp duty to pay on the property, only ITP, which varies from region to region but in Andalucia starts from 8% up to € 400,000. Next 300,000 € is subject to an ITP by 9% and after it is a blanket charge of 10%
So, to give you an example case of a 1 million euro property you would calculate the ITP like this: – (€ 400,000 x 8% = 32,000 €) + (€ 300,000 x 9% = 27,000 €) + (€ 300,000 x 10% = 30,000 €) = total of € 89,000.
Property tax for non-residents
If the person you buy a Spanish property from is not a Spanish resident, as is often the case in Marbella, the buyer must retain 3% of the purchase price and pay this on behalf of the seller to the Spanish tax authorities. This is called « retenciones » or retentions. It is common for your lawyer to handle these tax payments for you.
Local property tax or IBI
The owner pays an annual tax based on the valuation value of the property. Just like municipal taxes. The current IBI tax rate in Marbella is 0.88%
Other property costs when buying property in Marbella
You will also need to take in account the cost of a lawyer when buying a spanish property. And don’t forget the notary fee, which is a percentage based on the final purchase price. You should ask your lawyer to research in the « Catastral de Inmuebles », what the official value of the property is and enter the value in the property register to ensure there are no differences between them.
Notary fees may vary from 0.5% – 1% of the purchase price, so do not forget to account for this in your budget. You will also have to pay an additional 1% of the purchase price to have the sale registered in the Real Estate Register.
If you have any questions about property tax in Spain, please feel free to contact us. We will be happy to explain and give you tips on how to save a little here and there!