Taxes in Spain

Following is a rundown of the different taxes you will be dealing with in Spain:

• Income tax
• Property tax
• Property tax (extra)
• Tax on the increase property value
• Capital gains tax
• Transfer tax
• VAT (1)
• VAT (2)
• Construction tax

Income tax:

(=Impuesto sobre la renta de las personas físicas)
Valid for people who do not live in Spain and who do not have a stay-permit.Foreign houseowners are charged by the Spanish gouvernment with a so called ‚renttax'. Spanish citizens do not pay this tax. You are charged for a tax of 25% over 2% of the official value (land register) of your property when the house is not offered for rent. When you do so you pay 25% over this income. For the period the house was not let you pay a proportional renttax.

Property tax:

(=Impuesto sobre bienes inmeubles)
The owner of the property pays between 0.3% and 0.6% property tax. The percentages differ from county to county. Both residents and non-residents pay property tax.

Property tax (extra):

(=Impuesto extraordinario sobre el patrimonio)
Property tax for people non resident in Spain.For foreigners without a stay-permit the property tax is not free of tax. For every peseta you pay tax for your property. The percentage is 0,2% of the official value of your property, up to 26,8 million pts. From 26,8 up to 53,5 million pts. you pay 0,3%, from 53,5 to unlimited you pay 0,5%.For someone who lives in Spain there is a free of tax amount of 25 million pts. For higher amounts tax is progressively, from 0,2% up to 2,5%.

Tax on the increase property value:

(=Plusvalia)
When you sell your house and land you always pay tax to the community; notwithstanding the period of being the owner.

Capital gains tax:

(=Impuesto sobre incremento de patrimonio de la venta de un bien inmueble)
A Spanish citizen presumably will not pay tax for his permanent houseownership, when this profit is re-invested in buying a new house. When the last property was cheeper, the tax for the profit gained will be 18%, excluding specific deductions.When a Spanish citizen sells his holidayhouse with a profit, he has to pay 18% taxes, excluding specific deductions, even when this profit is re-invested in a new holidayhouse. Someone not registered in Spain has to pay 35% tax of the profit. The buyer will keep 5% of the amount and pay it directly to the Spanish gouvernment as a kind of pre-tax.The Spanish gouvernment is clever now; the buyer now is responsible for paying this tax. When he doesn't do so, he will be responsible in case the house-seller is ‚gone' and left the country.When you are a houseowner longer then 2 years at the 31st.12.1996, you have the right for a deduction of 11,11% for every year the house was your property before that date.

Transfer tax :

(=Impuesto de Transmisiones Patrimoniales)
When you buy the house from a privat person, you pay 7% of the official value. When you buy the house from a professional land broker, you pay the Spanish VAT.

VAT (1):

(=IVA)
When you buy a piece of land from a professional land broker you pay 16% VAT; from a privat person you pay 7%. When you buy a new house and a piece of land from a professional land broker you only pay 7%. When you first buy the land you pay 16% VAT, even when you build a house on it later. The tax for the new house is 7% VAT. When you build a garage or a swimmingpool together with the house, you also pay 7%. When you build a garage or a swimmingpool at an existing house you pay 16% VAT.

VAT (2):

(=IVA)
When you build a garage or a swimmingpool together with the house, you also pay 7%. When you build a garage or a swimmingpool at an existing house you pay 16% VAT.For small reconstructions (not larger then 25% of the total value) you pay 16%. For larger reconstructions only 7%.

Construction tax :

(=Impuesto sobre construcciones, instalaciones y obras)
For the application for a building permit you will be charged at about 2,5% of the value of your property. This value is calculated by the architect. The architect often includes the percentage in his fee and will pay this tax for you.

Example for extra costs for buying a house:

In prices are in Euro

¹ This is 7% VAT (=IVA) in case a new house is built and 7% ITP in case the house already excists, also 0,5% stamptax. ('Impuesto de Actos Juridicos Documentados')