What real estate taxes must be faced in Spain Yes or Yes when buying a house in 2022
July 18th, 2022 |
We must take into account what the real estate taxes that exist in Spain are, to know which are the ones that we will have to face when we carry out a transaction of sale, which ones will we have to pay during the life of our home, etc.
To do this, we are going to see what are the different taxes according to the law that we must take care of in order to have the payment of our homes up to date and that they do not take us by surprise when the time comes to make the payment of each one of them.
This is especially important when buying a house, so that we take into account each and every one of the expenses that we will have to address in the transaction, to make the numbers correct, since we cannot avoid paying these taxes by buying a home.
What are property taxes?
Real estate taxes are taxes on real estate that must be paid for having a home in charge either when making a purchase or sale of real estate or during the useful life of it.
There are several taxes that we can find since we will find city council taxes, state taxes or taxes applied by the community, which make an important range of taxes for owners of real estate.
What are the housing taxes established in Spain?
Let’s see what are the taxes according to Spanish law that the owner of a home has to pay. The best known of all of them is the IBI or Real Estate Tax, a municipal tax that is levied annually on the property of a farm, but there are several more taxes that we will have to face.
Taxes on documented legal acts
This tax is responsible for all actions that are recorded in a public document and that have an economic cost. This occurs a lot in purchase operations, in sales and in mortgages.
These Documented Legal Act Taxes (IAJD) depend on the amount of where the home is registered, since the percentage to be paid according to the price of the home depends on each community.
Capital gains tax
This tax revolves around the increase in the value of the home’s land. Unless there is an agreement between the parties, this tax is borne by the home seller.
The cost of the tax to be paid will depend on several issues, such as, for example, the municipality in which the home is registered , its exact location or the years that have passed since the last settlement.
VAT is a tax well known to all, since it is included in any purchase. In the case of housing, the percentage to be paid depends on each autonomous community. The normal thing is that it is about 10% of the deeded amount, for free sales, and around 4% for publicly promoted subsidized housing. It is important that we take this into account when carrying out the purchase operation and that we calculate the VAT that it will entail for our new home.
Property transfer tax
This tax does not affect the purchase of newly created housing, only second-hand ones and in transactions of this type the ITP is charged instead of paying the VAT. Again, it depends entirely on the autonomous community to which the home belongs, varying to a greater extent than other taxes.
It is necessary to know exactly what the amount of this tax is, since it is an important part of the amount of the purchase of a second-hand home, so it is convenient for us to know well the charges of our autonomous community.
Personal income tax
Finally, mention the IRPF that the seller of the home will have to declare on the profit obtained in the management of the sale of the property. Do not forget to declare the profits when making the corresponding income statement, since the sale of a house represents a significant amount and must be recorded in the Treasury.
Article by Vanesa Mena, Jul 18, 2022