Buying and selling property. Taxes
Content
Tax on the purchase of immovable property
- The sale of new properties by the developer (initial handovers) is subject to Value Added Tax (VAT).
- The sale of second-hand properties by entrepreneurs (second and subsequent assignments of buildings) is subject to Capital Transfer Tax (as Transfers for Valuable Consideration). If the buyer is another entrepreneur, VAT is payable when specific requirements are met.
- The sale of properties by private individuals is subject to Capital Transfer Tax (as Transfers for Valuable Consideration).
VAT on the purchase of property
The purchase of a new dwelling entails an obligation by the buyer to pay value added tax. The VAT paid by the buyer is calculated by multiplying the price of the dwelling by the tax rate in force at the time of purchase. Payment is made to the vendor who, in turn, pays the tax to the tax authorities.
‘First delivery’ of dwellings means dwellings that are purchased from the developer when the construction or renovation is completed, unless the dwellings have previously been in continuous use for a period of two years or more, by persons other than the buyers.
A property assessor
may be consulted for more information.
Applicable rate
The current tax rates are as follows:
- 10% on the sale of dwellings.
- 4% when it concerns officially protected housing or housing under a public promotion scheme.
- 21% on the sale of other types of property
Transfer tax (ITP) and stamp duty (AJD) when buying property
The transfer tax and stamp duty (ITPAJD) is transferred to the Autonomous Communities under Law 22/2009 of 18 December 2009 governing the system for the financing of the Autonomous Communities under the common system and cities with regional autonomy and amending specific tax rules, Article 33 of which provides that the Autonomous Community in which the property is located shall be responsible for managing the tax. The rates of tax are different for each Autonomous Community.
Ceuta and Melilla
The autonomous cities of Ceuta and Melilla have not assumed responsibility for the tax under the devolved system, so that responsibility lies with the State and has been assumed by the Central Government Delegations of Ceuta and Melilla, respectively.
Self-assessments for this tax may be filed using Form 600 .
Information for each Autonomous Community
Andalucía Aragón Asturias, Principado de Balears, Illes Canarias Cantabria Castilla y León Castilla-La Mancha Cataluña Ciudad de Ceuta Ciudad de Melilla Comunitat Valenciana Extremadura Galicia Madrid, Comunidad de Murcia, Región de Navarra, Comunidad Foral de País Vasco Rioja, La
Information from local authorities
Some municipal councils have introduced a tax payable by sellers when the value of urban property (buildings and building land) they are selling increases.
Access to the Local Government Map to select the relevant municipality.
