Buyers Guide

Page 6

IVA: [VAT] On new property on the first transmission of the escritura [title deed] the buyer has to pay IVA, which is 7% on apartments, houses and any garages purchased with the property [usually garage space below apartment], and 16% on land, locales [shop units] and garages purchased separately.
ITP: [Impuesto de Transmisiones Patrimoniales ] [Transfer tax]
On second and subsequent transmissions of a property the buyer has to pay ITP at 7%
Stamp duty: Impuesto de Actos Juridicos Documentado [ AJD ]
When a property is purchased from a developer, promoter or habitual trader and IVA is charged the purchaser will also have to pay 1% AJD [stamp duty]
Abogado, Notario and registry fees:
Abogado [lawyer] fee: around 1%.
Notario fee: Depending on land and size of house, allow 0.2 - 0.3%
Registry of property ownership approx. 0.2%

Additional notes for companies: The good news is that now in Andalucia, when a property is transferred from one Spanish company to another, the companies involved can elect to pay 16% IVA instead of 7% ITP but in this case the company would pay a higher rate of AJD [stamp duty] at 2%
ITP or IVA tax is not payable on a property owned by a Spanish company when the ownership of the company changes.
The company purchasing, would need to have a minimum of 2 shareholders, holding a maximum of 50% of the shares each, BUT if the tax authorities suspect that the beneficiary of a property owned by a company has changed [the one living in it], then all the transfer taxes and other costs will be applied!.

Warning: This is an area where you should always consult a specialist abogado, it is extremely difficult [some would say impossible] to determine exactly the assets and more importantly the liabilities a company has.

The cost of owning a home on the Costa del Sol:
IBI: Owned Property is subject IBI. tax Impuesto sobre Bienes Inmuebles. This local tax varies and is based on the Catastral value [ValorCatastral] of the property. this value is often considerably lower than the real value. On a property that has changed hands recently the Valor Catastral could be 75%, on a property which has not changed hands for 15 - 20 years or more, it could be much less. The tax varies depending on the area, but Generally on a property with a Valor Catastral of 120,000 euro you would expect to be taxed approx. 480 euros per year.

Basura: In some areas you will have to pay the Basura [for rubbish disposal] separately, in other areas it is included in the IBI.

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