Majorca Real Estate Spanish Taxes Charges

WHO IS PAYING WHAT? Charges

The buyer pays the Spanish real estate taxes charges below:

Transfer Spanish Tax (I.T.P) or IVA
Real estate Register Fee
Notary costs
Lawyer Charges

The seller pays the real estate taxes charges below:

Capital Gains Spanish Tax (Plusvalía)
Notary Charges
Real Estate Charges
Lawyer Charges

CHARGES CONNECTED WITH BUYING REAL ESTATE PROPERTIES.

When you have finally decided on the home of your dreams, you should not forget the Charges connected with buying this real estate. This amount will be approximately 10 % of the "declared" purchase price.

What Spanish Taxes are due to purchase a real estate?

There are two different Spanish Taxes, depending on the type and circumstances of the real estate that you are buying.

In case of purchasing a newly built real estate from a developer you pay VAT called " IVA : Impuesto sobre el valor añadido", which will be 7 % + 1 % Stamp Spanish Tax of the contract price or 16 % on land.

When you are purchasing a resale, you will pay a transfer Spanish Tax called " I.T.P - impuesto de transmisiones patrimoniales ", which is charged on 7 % of the declared price.

Another Spanish Tax that has to be paid is the Municipal Plusvalia. This is a Spanish Tax set by the local Town Hall and based on the increase in the value of the land and real estate from the date the owner acquired the real estate to the time of the present sale. Mainly paid by the seller. This is a separate Spanish Tax, and is not included in the 10 % of the purchase Charges.

What are the additional Charges? for a real estate

The Notary Charges

These Charges are collected by the Notary for preparing the Title Deed called "Escritura Pública de Compra/Venta" and presiding over of the signing. The Charges will be approximately 1%.

After purchasing the real estate, the notary will give you a copy of the deed (Escritura) which says that you are the new owner of the real estate. The original deed will be send to the Land Registry Office.

The Lawyer Charges

We can put you in touch with a Spanish lawyer English speaking who will charge a competitive rate.

They can give you legal and fiscal advice on real estate investments or help you with economic transactions with foreign countries or project development of non residents.

The lawyer can also arrange a Foreigners Identification Number called " NIE - Numero de identificación para extranjeros " for you. This document is essential for major purchases like buying a real estate and Spanish Tax payments.

To apply for the NIE, you need a photocopy of your passport, confirmed by a notary that it is an original copy and a form, which can be downloaded at:

James Majorca uk mobile email mallorca.uk.net@gmail.com For help and general advice email us your full contact details

The Real estate Register Charges

Approximately 0,5 % is charged by the Land Registry Office called " Registro de Propiedad " to register the new deed (Escritura) into your name.

When this is completed, you are lawful the owner of the real estate.

Mortgage in Spain or at home?

Getting a mortgage in Spain has some advantages, like the interest rates in Spanish Banks are varying, but most of the times lower than at home, it has favourable write off conditions and it is easier for paying Spanish Taxes. So it is recommended to take a mortgage in Spain. Anyway you have to open a Spanish account for the fixed costs, like water, electricity, insurances and in case you bought a real estate in a complex, the communal Charges. It can save you a lot of commissions caused by international bank transactions.

Do I have to pay a deposit on a house?

It is quit common to pay a deposit in Spain, to remove the real estate of the market while you are arranging the legal part. The standard deposit is 10 % of the purchase price. In this case both sign an Option Contract (Opción de Compra).

The deposit has advantages for the buyer as well as for the seller. In case you decided to pull out of the deal you lose the 10%. On the opposite, if the owner pull out of the deal he has to compensate double the 10 % of the deposit.

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