Transfer tax in Spain: When acquiring or selling property in Spain, you will have to pay taxes, as well as some other costs associated with the purchase or selling of property in Spain.
Transfer tax in Spain
It goes without saying that if we do your conveyancing and accompany you with your purchase, we will provide you with a personal and detailed overview in advance of your purchase costs and taxes. The taxes must, if necessary, be paid to the autonomous region or to the Spanish tax authorities. In addition to the effective purchase taxes and taxes that we will list in a moment, there are also small costs associated with your purchase, such as the connection of water and electricity, applying for the NIE (foreign national number), NIF (tax number) and Clave Digital (digital login token) etc.
In addition to these taxes, you will also be subject to te council tax in Spain, the tax for non-residents and possibly also the wealth tax in Spain.
Notary Fees and Registration Fees
The first two costs that you will have in a normal purchase procedure are of course the notary fees and the registration fees. Usually these are not too steep and you should take into account a 1500€ to 3500€ for both together. These depend on the purchase price, but also on the number of pages that your deed of purchase has and the appendices, etc. Although there are scales for the notaries, some charge a little more or less for certain documents. The Spanish Land Registry Office works in a similar way, so it’s difficult to give an exact amount for these two charges in advance, but we’re going to give you an approximate estimation.
Transfer tax to be paid on purchase of used real estate
- 6% on the purchase value in Madrid
- 6.5% on the purchase value in the Canary Islands
- 7% on the purchase value in Andalucia
- 8% on the purchase value in Murcia
- 8%-11.5% on the purchase value in the Balearic Islands
- 10% on the purchase value in Valencia
Transfer tax to be paid when purchasing new construction
- 7% + 1% on the purchase value in the Canary Islands
- 10% + 0.75% on the purchase value in Madrid
- 10% + 1.2 % on the purchase value in Andalucia
- 10% + 1.5% on the purchase value in Murcia
- 10% + 1.5% on the purchase value in the Balearic Islands
- 10% + 1.5% on the purchase value in Valencia
Transfer taxes when selling
Taxes are due on the sale of real estate in Spain. We provide a brief overview of these two taxes below:
Local Taxes
Municipal capital gains tax, also called the “plusvalía municipal”. This is a tax that will be levied by the municipality where the property is located. We will calculate this for you in advance so that you have an idea of the cost. This is based on the value of the land and the number of years you have owned it.
State Taxes
National capital gains tax, also called the 3% tax. When you sell the property, you will pay a tax on the NET capital gain that you have realised. This means that the difference between:
- The purchase price that you paid at the time, plus all legal costs associated with your purchase, such as notary fees, registration fees, transfer tax and your supervision costs by a consultant/solicitor like us.
- The sales price you now receive minus all legal costs to be deducted that are associated with the sale, such as our invoice, the energy performance certificate, the municipal capital gains tax described above and the invoice from the broker.
On this difference, if it is positive (so you have made a profit on the sale) you will be taxed at the rate of 19%. At the notary, however, you will already have to pay 3% of the total sale price to the tax authorities. The difference between the two will have to be made up. In other words:
- Either you have paid too much tax at the moment of the sale (the 3% of the total sale price is higher than what you should have paid) and then we will make sure that the Spanish tax authorities refund the overpaid amount to you;
- Or you have paid too little at the notary (the 3% that was withheld at the sale is not enough) and so we will have to submit an extra declaration and still have to pay this difference. ATTENTION!! You can only claim a refund of the overpaid tax if you have correctly submitted and paid your annual non-resident tax! The tax authorities will check this before proceeding with any refund of your taxes.
Don’t let this discourage you, we do a calculation in advance so that you know what to expect and how much (or how little) you have to pay on the sale of your property at the Spanish tax authorities.
Transfer tax in Spain: finally
It goes without saying that if we do the full conveyancing during your buying or selling process, we will calculate these taxes for you in advance and inform you. And of course submit and settle with the competent authorities.
We also offer to do the necessary for you, after you have already sold and only want to use our services for the submission of the national capital gains tax. As explained earlier, it must be filed and settled within 3 months of the sale. We are happy to assist you with this!
