What is property transfer tax?
You’ve set yourself a budget and you’ve started your property search online.
Before you look any further, did you know you have legal costs to pay that are not included in the asking price? In total they are generally around 12% on top of the agreed purchase price. This includes Lawyers fees, Notary & Land Registry costs and Tax.
If you don’t take these legal costs into consideration when looking for your home in Spain, you could end up with a property you can’t afford to complete on.
When buying a home in Spain you will have to pay “Property Transfer Tax” (Impuesto de Transmisiones Patrimoniales) on top of your agreed purchase price. This is equivalent to Stamp Duty in the U.K.
Based in the Valencian Community and selling resale homes in the Alicante province the “Property Transfer Tax” is 10% of the agreed purchase price. For example, if you were buying a home for €100,000 the Property Transfer Tax would be €10,000.
Property Transfer Tax is charged whether you’re a Fiscal Resident of Spain or not.
It is customary to pay this tax on the day of completion, however legally speaking, you have 30 days after completion to settle this payment with the Spanish Inland Revenue.
Are you on the hunt to buy your home in Spain? Before you start your property search, head to www.BuyMyHomeInSpain.com for buying information and costs.