Taxes on the purchase and maintenance of a property in Spain

Taxes on the purchase and maintenance of a property in Spain

In Spain there are two types of costs and taxes:

  • Costs and taxes for the PURCHASE of real estate.
  • Costs and taxes for the MAINTENANCE of the property.

1. COSTS AND TAXES FOR THE PURCHASE OF REAL ESTATE

There are 6 main types of costs:

№1: VAT (the Value Added Tax)
In Spain this tax represent 10% of the value of the property.

№2: AJD (Stamp Duty) 
This is a mandatory tax on the purchase of a new property. Basically, it depends on whether you are a resident in Spain or not. For non-residents, the amount of this tax is 1.5% of the value of the property, for the residents it's 0.1%.

№3: Lawyer services
Up to 1000 €.

The list of lawyer services includes the following:

  • open a bank account;
  • obtain the NIE number, that is the foreigner's tax number;
  • check all the documents of the chosen property;
  • prepare all the papers for signing the final purchase agreement - the deeds;
  • register the property and the new owner in all necessary instances.

№4: Notary services
Up to 500 €.

№5: Registration fee
Up to 500 €.

№6: Water and electricity connection
About 300 €.

EXAMPLE:
Let's take villa for price: 200.000 €.
200.000€ + 20.000€ (10% VAT)= 220.000€ 
220.000€ + 3.000€ (1,5% Stamp Duty) = 223.000€ 
223.000€ + 1.000€ (Lawyer) = 224.000€ 
224.000€ + 500€ (Notary) + 500€ (registration fee) = 225.000€ 
225.000€ + 300€ (water, electricity) = 225.300€ 

For a house that is worth 200.000 €, when we add all the purchase taxes and costs, we have the final price of 225.300€. That is to say, we added another 12.6% to the value of our property.

200.000€ + 12,6% (225.300€) = 225.300€

2. TAXES AND COSTS FOR THE MAINTENANCE OF REAL ESTATE

In general, they can be divided into 4 categories.
  
№1: IBI Council tax
Alias - the annual property tax. A villa of the type that we have chosen costs around 500€ per year. 

№2: Community Fees
These fees are paid for the maintenance of a residential complex if it has common pools, gardens, etc. In our particular case, there is no community, because we are talking about a detached villa. But, in general, the average cost of this kind of fees is 60-70 euros per month.

№3: Garbage collection fee
Up to 120 € / year.

№4: Utility bills
The payments for water and electricity. They depend on your consumption (the average cost for water is 140 € per quarter, and for electricity - 60-70 € per month).
So, the monthly maintenance of your villa, considering all the fees, will cost you 200-220 €.
 

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