Proposed Spanish Property tax explained

In recent weeks we have had so many discussions to explain the proposed Spanish Property Tax increase  for Non EU Citizens buying Spanish Property and  would like  to highlight  that this tax increase is proposed only.

  It has not been legislated or or been approved via parliament.

It has been discussed as a measure to deter the  buying up properties mainly in major cities in Spain such as Barcelona, Madrid and Seville . These properties are then rented out as AirB& B  short term rentals and therefore pushing up the price of rental properties ,and as a consequence affecting Spanish nationals . This has has also been a major problem in Majorca , Ibiza and the other Balearic islands .

However, many Non EU citizens who have been thinking of  property in Spain have been concerned  as this has been reported incorrectly in the the international media when  it is in fact on the property tax level  which is  currently 8% to  11%.

What are the facts

1. The currently property tax  for property purchased in Spain is between 8% and 11%.

3. This is only proposed at this stage.

   4.  Properties can be bought as normal

How does it affect you buying a spanish home or holiday property

It doesn’t affect you as it is only proposed at this stage. 

We also thought it would be extremely useful to highlight the property buying process in Spain as it differs from many  other countries.

and to make prospective buyers aware that the commissions in Spain are paid by the vendor only

  What is the property buying process in Spain 

It is useful for us to talk for many months before our clients buy in Spain, many are overseas residents who have been drawn to spain because of its climate, relaxed lifestyle, attractive cost of living

and health service. It is also the perfect location for bring up children and many families chose to live here are send their children to international schools .

Similarly a wonderful location to retire to.

Once we  have found a beautiful home that  you like , please hire a reputable lawyer to help you with the legal aspects of the purchase.

Luxury Partners Real Estate  work with a number of reputable  lawyers such as Abril Cumpian in Marbella www.abrilsolicitors.com   Esther  Pujol Wilkie Associates https://pujolwilkie.com/    

  or Gonzales Sanches and Partners https://www.gonzalez-sanchezandpartners.com/

The lawyers we recommend are  highly skilled in  the property legalities that are required for buying property  and  we are are delighted to

further advise you on a lawyer that will be a perfect fit for your requirements ,including speaking your language

Lawyers  help you with the necessary paperwork, advise you on the legal requirements, and ensure that the purchase process is legally binding.

Obtain a Spanish Tax Identification Number (NIE)

You will need to obtain a Spanish Tax Identification Number (NIE) to buy a home .  We can advise on how you can do this easily.

Open a Spanish Bank Account

You will also  need a Spanish bank account to transfer funds for the purchase.  You can do this at the bank  you have chosen or online if it is more convenient to you

Apply for a Mortgage ( if needed):

If you need finance to purchase the property, research mortgage options with Spanish banks. You will need to provide documentation such as income and asset information.

Make an offer on the home that you want to purchase

Once you have found a property that you want to purchase, make an offer and when your offer is accepted  your next step will be to

Sign a reservation agreement:

On signing this agreement you will normally pay a deposit to reserve the property

This fee  is around €6,000 euros, depending on the price of the property   ( Please note this amount will be deducted from the final price)

Pay a deposit on the property.

You will pay a deposit on  your home  within a few weeks or signing the reservation contract

( this is normally 10% of the property price)

Sign the purchase contract

Your lawyer will review the purchase contract and advise you on any changes that need to be made.

Once the contract is satisfactory, you will sign it and pay the remaining balance.

Register the property: Your lawyer will register the property with the local land registry.

Please budget for additional costs  such as taxes, notary fees, and registration fees,

Transfer tax  7% ;  Registration fee 1% ;  Lawyers and Notary 1-2%

Luxury Partners Real Estate S.L