Purchase taxes to be paid by the purchaser

There are two sorts of taxes payable: the one time taxes and year by year taxes.

One time taxes

When purchasing a property, the purchaser has to pay either the value added tax (IVA) or the land purchase tax (ITP). Value added tax (IVA).

Land purchase tax (ITP)

For all sales, which are not subject to IVA, the land acquisition acquisition tax (ITP) has to be paid. The amount is 6%.

The value-added tax is payable when a sale takes place through a company. It amounts to 16% of the sales.

Taxes on the sale of properties

The Plusvalía taxes the increase in value of land (not the buildings) since the last real estate transaction. Calculation base for the tax is the official cadastre value, which can be taken from the annual urban rate receipt. While the law determines that the seller is subject to pay this tax, in practice it is often contractually imposed on the buyer. This is not applicable if the vendor is a company or promoter selling the property to a private person.

Capital Gains Tax (Renta)

The profit from the sale of a property is subject to income tax. The tax rate for both residents and non-residents is 18%. In general the profit is the difference between the price of acquisition and the actual selling price.

Urban Rate

The urban rate (Impuesto sobre Bienes Inmuebles, IBI) is based on the value of the property according to the registry. The IBI will be paid annually.

The amount is between 0.3% and 0.4% of the land value depending of the location of the property.