When buying or selling a home in Spain, several taxes must be paid depending on whether you're the buyer or seller, and if the property is new or second-hand.

Taxes When Selling a Home

1. Personal Income Tax (IRPF)

• Applied to gains from property sales
• Declared in the following year's tax return
• Tax rate varies based on profit amount

2. Municipal Capital Gains Tax (Plusvalía/IIVTNU)

• Taxes the increase in urban land value
• Must be paid within 30 business days of sale
• Paid to local town hall
• Inheritance cases allow 6 months for payment

3. Property Tax (IBI)

• Annual tax paid by property owners
• Due on January 1st each year
• Seller responsible for full year's payment
• Can be prorated between buyer and seller by agreement

Taxes When Buying a New Home

1. Value Added Tax (VAT)

• 10% for regular homes
• 4% for protected housing
• Special rates for Canary Islands (IGIC):
  • 7% general rate
  • 5% for primary residences (conditions apply)
• Ceuta and Melilla: IPSI applies instead

2. Tax on Documented Legal Acts (AJD)

• Applied to public deed formalization
• Base rate is purchase price
• Rates vary by autonomous community

Taxes When Buying a Second-Hand Home

1. Property Transfer Tax (ITP)

• Replaces VAT for second-hand properties
• Rates vary by autonomous community
• Calculated on property's declared value

Important Considerations:

• Tax rates may vary by region
• Some autonomous communities offer tax benefits
• Professional tax advice recommended for complex cases
• Timing of tax payments is crucial for compliance
• Keep all documentation for tax purposes

All taxes must be paid to the corresponding tax authority (state, autonomous community, or local) within their established deadlines to avoid penalties.

Related Articles

Previous Articles