Property purchase tax in Spain for foreigners

Foreigners buying property in Spain pay the same taxes and extra costs as Spanish citizens.

A number of taxes and costs are inseparable from a property purchase, and which ones apply and how much they add up to depends not on the buyer’s status (Spanish citizen or foreigner) but on the type of purchase:

• buying new-build property;
• buying a resale property;
• buying property with a mortgage.

Property purchase tax in Spain: VAT (IVA)

Value added tax on property in Spain is charged at two rates:

• 21% tax is payable when buying commercial property, a property under construction or a property that has been built but not yet officially completed, and also when buying garages, parking spaces and storage rooms bought separately from the main property (that is, not included in the notarial title deed for the flat or house).
• 10% tax is payable when buying a new home that has been officially completed (that is, it has a first occupation licence), and also when buying a garage, a parking space (at most 2 spaces per flat) and/or a storage room bought at the same time as the main property and located in the same development.

Property purchase tax in Spain: transfer tax

Transfer tax (Impuesto sobre Transmisiones Patrimoniales, ITP) is a regional tax, so the rate is set at the level of the region or autonomous community. Reliefs and tax deductions are applied in the same way. The general rate of the tax in the Valencian Community is 10%.

Transfer tax applies when buying a resale property. What matters here is that the seller is a private individual, not a business or a company carrying out an economic activity and registered as a VAT payer in the Spanish Business Activities Tax register.

If the seller is a business or a company, the purchase should be discussed with a tax adviser in advance, as different tax treatments are possible.

Property purchase tax in Spain: tax on documented legal acts

The tax on documented legal acts (Impuesto sobre los Actos Jurídicos Documentados, IAJD) is also known as stamp duty. It cannot be combined with transfer tax and is charged only on purchases that involve paying VAT.

The rate is set at regional level. A rate of 1.5% applies throughout the Valencian Community. The amount payable is calculated on the purchase price stated in the notarial title deed.

This tax is also paid when notarial documents are drawn up, and in this case the main tax on buying property in Spain is no longer taken into account: it is calculated at a fixed rate (for example, 0.15 cents per page), and the total depends on the number of physical paper pages in the notarial document.

Property purchase tax in Spain: Land Registry fees (Registro de la Propiedad)

Another tax when buying property in Spain is a state fee, paid when ownership of the property changes and the notarial deed of sale is registered with the Land Registry.

This fee is inseparable from the purchase and must be included in the total purchase costs.

The fee is calculated on a sliding scale:

In any case, the total fee cannot be lower than €24.04 and cannot exceed €2,181.67 (this maximum is set in the text of the law governing the fees charged by the Land Registry).