Property buying costs and taxes in Spain are mandatory phases in the sale and acquisition process. However, it is essential to consider them as a financial factor and adjust them to the budget. This circumstance is fundamental since the cost of a property is not limited to the announced by the seller’s sale price.
The main costs include the appraisal and registration of real estate property, the notary, VAT (Value Added Tax) and ITP (Tax on Property Transfers and Documented Legal Acts), among other mandatory expenses for both, the seller and the buyer.
Next, we detail what are all the necessary documents, expenses and sales taxes in 2024 according to Spanish law.
Documents needed to sell a property in Spain.
First of all, the landlord must know if he is considered a resident or not. According to the Tax Agency, a person is a resident in Spain in one of the following circumstances:
- His stay in Spain exceeds 183 days during a calendar year and is accredited.
- Spain is the main base or centre of its economic activities.
- Your legal partner and dependent children reside in Spain.
Necessary documentation
- DNI (National Identity Document).
- Property Deed.
- Simple note.
- IBI (Real Estate Tax).
- A certificate proves that there are no debts with the Community of Owners.
- Certificate of outstanding debt on the date of execution of the public deed, in the event, that the property has a mortgage pending settlement.
- Energy Efficiency Certificate. It is not mandatory but can be requested.
- First occupancy license or urban non-infringement license.
- ITE (Certificate of Technical Inspection of Buildings), in the case of selling a building that is more than one hundred years old.
Expenses and taxes associated with the sale of a property in 2024
In the following paragraphs, we detail the different taxes that are charged to the seller’s account.
Non-resident income tax (IRNR)
It is a tax to be paid only by non-residents, for the profits obtained from the sale. To know the exact amount of the IRNR tax, you have to calculate the difference between the following values:
- Acquisition value: this is the total price paid for the purchase of the property, including the expenses inherent to the acquisition (taxes, notary, Land Registry, etcetera). Here we include also all the improvements and investments you have made to the property before selling it.
- Transfer value: this is the sale value of the property less the derived expenses such as real estate and notary costs, capital gains, etcetera, which will be deducted.
Once you calculate the difference between both values, a rate of 19% is applied to that amount for residents of the EU, Iceland and Norway, and a rate of 24% will be applied to the rest of the nationalities.
Tax on capital gains or tax on the increase in the value of urban land (IIVTNU)
The capital gains tax or IIVTNU is the increase in the cost of the property during the time that the seller has owned it. The capital gains tax depends on the rise in the value of the land, the years elapsed since the purchase and the tax rate established by the City Council.
Expenses and taxes associated with the purchase of a property in 2024
The buyer of a real estate property assumes other charges depending on whether the property is newly built or second-hand.
- New Construction Properties: When buying a new property in Spain, the buyer must pay VAT and Documented Legal Acts. The value of the tax is 10% of the total sale price.
- Second-hand Properties: When buying a second-hand property, the tax that applies is the Property Transfer Tax. In Andalusia, the percentage is 8%. However, it has been reduced to 7% in 2022.
Stamp Duty
This tax depends on the autonomous community and is paid signing the deed before a notary and subsequently registered in the Land Registry. In the case of Andalusia, the stamp duty is 1.5% of the sale price. However, this percentage has been reduced to 1.2% since April 2021.
Notary
Notary fees depend on the price of the property and the number of pages in the deed. For example, for a property whose purchase price is €200,000, notary fees can be approximately €900.
Property registration
These rights are related to the registration of the property deed in the Land Registry. The prices are legally regulated, and the total amount is calculated concerning the purchase price and the number of buyers. It is usually less than the notary’s fees. If you apply for a mortgage, appraisal, notary and loan fees will also be included.