Spanish property - registration and tax in Spain
The system of tax in Spain can be complicated with a seemingly endless number of charges existing. Before you can buy Spanish property you must register for an identification number. Thereafter a number of taxes exist relating to owning villas or apartments in Spain.
Registering for tax in Spain
When you move to Spain you will need to obtain an NIE number. This enables the Spanish tax collector to identify you and doubles as a social security number. NIE numbers are available to foreigners on request and are needed to carry out any legal transactions as well as for paying tax in Spain.
Registering your Spanish property
If you decided to go for an apartment in Spain or other Spanish property you must have it registered with the land registry. This is done after the full cost of the Spanish property and transfer tax has been paid and both parties sign the contract in front of the notary.
The notary will then fax details of sale to the land registry. A few days later your lawyer will be able to collect the deeds and take them to the land registry to have the property inscribed.
There is a registration fee, charged on a sliding scale according to the value of the apartments in Spain.
Ownership of property means more tax in Spain
Impuesto sobre Bienes Inmuebles (IBI)
The IBI can be translated to mean "property tax" and is similar to the UK´s system of council tax. IBI varies considerably from one area to another and from one type of property to another. A simple countryside property could cost you as little as €50 per year. On the other hand, luxury apartments in Spain´s cities might cost upwards of €1,500 a year.
Capital gains tax in SpainThis tax is payable on the profits made on the sale of property.
Basura (rubbish collection tax)All owners of property must pay this tax in Spain to the local town hall once a year.
Transfer tax in SpainCharged on resale Spanish property at 7% of the new title deeds value.
Stamp dutyStamp duty need only be paid when buying a new property. New-build apartments in Spain mean paying IVA (VAT) at 7%, plus 1% stamp duty.
Plus valiaA tax which is charged on the transfer of Spanish property.
Because of the complicated nature of taxation it is always advisable to seek professional help when dealing with tax in Spain. This will help you minimise the problems caused when trying to buy apartments in Spain or any other property.
