Taxes on acquisition:
Total Acquisition Costs Estimation:
- New properties: 3.000 EUR + 12.41%
- Resale: 3.000 EUR + 8.21%
Breakdown:
State Taxes:
- 11.2% on New Buildings: 10% VAT + Stamp Duty 1.2%
- 7% on Resale Properties (named property transfer tax)
Notary fees
- approx. 2.200 EUR for a property that values 350.000 EUR and approx. 2.700 EUR for a property that values 800.000 EUR
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Lawyer’s fees
- 1.21%, VAT included
Optional Financing Costs: 1.21% VAT included, applied to the amount borrowed
Taxes after acquisition:
- Property tax (IBI), including garbage tax: local tax claimed by the City Councils, which must be paid by the owners of any property. Ranges from 0.2-0.3% from market value (resulted from a grilled price based on the cadastral value of the property)
- Rental income is subject to tax at 24% for non - EU residents and 19% for citizens residing in the EU, Norway and Iceland.
Taxes for resale:
- 19% profit tax applies and a variable land value tax (Plusvalia), applied after the first year of ownership, for the increase of the land value.
Main Benefits working with a verified lawyer:
- Delegate all the buying process, including assistance for AML/KYC (that can be very complicated in Spain)
- Covers potential fraud risks through complete due diligence about the property
- Covers warranty clauses and repair terms with related penalties
- Introduction of penalty or termination clauses for failure to comply with construction terms or other contractual obligations
- All funds are included in the customer's account. Personal payment can be made or based on a payment mandate, payments can be made to the law office.
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The complete lawyer’s checklist:
- Title deed about ownership and property details
- Consult Property Registry to ensure there are no debts/mortgages
- Land Registry - proving ownership and exact details of property
- Check the validity of the escrow account
- Verify 1st License of Occupation necessary for rental license and construction license.
- Documentation in order to obtain utility contracts
- Energy Performance Certificate
- Mortgages, leases, rentals encumbering the project
- Community of Residents/ Homeowners association statutes - need to validate for rental properties
- Purchase Agreement - all the documents are in spanish and must be checked and explained
Others activities delegated to lawyer
- Signing the Title Deed in front of the notary public, on behalf of the client
- Payment of the invoice at the notary's office and collection of official documents from the notary's office
- Payment of property transfer tax
- Registration of the property at the Land Registry in the name of the new owner
- Obtaining the certificate from the Land Registry
- Obtaining the Digital Certificate on the basis of which the owner registers with the public administration and utility providers
- Payment of the Land Registry invoice
- Change of Holder / Drafting the contract for Water and Electricity, IBI, Garbage
- Registration in the Owners Association
- Obtaining the rental license
- Accounting - submission of declarations for non-residents
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