While thinking of buying a property in Spain, it is necessary for you to consider the taxes that will be payable when the Spanish property is registered against your name. The housing rates and local taxes are applicable on the buyer. The home owners have to pay taxes every year. The housing tax rates are largely dependent on the price of the house and the location it is in. While you are still in the process of buying a house you should know the taxes that are applicable.Re-sale purchase tax is the tax applicable on sellers selling their property. They are supposed to pay a tax called Impuesto de Transferencia de Propiedad it is the Transfer Tax which happens to be at a rate of 7%. New Property buyers, on the other hand have to pay 'New property purchase tax'. Their liability is in terms of taxes called IVA (VAT) which is also 7% in Spain. If the house or the property in form of a shop is finished or is still under construction then an extra 0.5% is applicable on the buyers (as stamp duty). If you are keen on buying land, commercial complex or a parking space in Spain then the tax in terms of VAT increases to 16%.
For people involved in a property sale in Spain will have to pay an increased patrimony tax which is to be paid to the Spanish Treasury. A capital gains tax is also required to be paid by the person selling the property. Spanish fiscal clause says that the buyer can keep 5% of the actual purchase price of the house to ensure that the house is handed over properly before closing the deal. This amount is usually considered as the capital gains tax which is deducted on the profit or the money earned by the seller during the sale. This is where the difference lies between the existing (official) selling price of the property and the original price the seller of the property paid.The capital gains tax is 5% of the difference for the non residents. The rate is 3% for the Spanish residents. This is counted towards the advanced deposit. The amount retained during the sale should be payable only when the new deeds are there and the moment everything is shown to the local registry. This also implies that property owners who wish to sell off their property in Spain need to hire a lawyer to take care of the important paperwork including the tax to be paid for couple of months after the house has been sold.