I’ve been house-hunting recently, and my head is spinning. The agent mentioned a bunch of taxes like ITP and IVA, and it was all Greek to me. Who’s supposed to pay these taxes, the buyer or the seller? After a few days of research, I’ve finally got it all figured out. I decided to put together this guide on property purchase taxes in Spain and share it with anyone else who’s confused. Let’s discuss it together!
Taxes to be Paid by the Buyer
As the buyer, we’re the ones paying the bulk of the taxes. The main taxes you’ll pay depend on whether you’re buying a new build or a resale property. These two are completely different, so don’t get them mixed up!
If you’re buying a new property
There are two main taxes to pay:
- IVA: You’re probably familiar with this one; it’s the Value Added Tax (Impuesto sobre el Valor Añadido in Spanish). It’s typically 10% of the property price. For example, on a new €500,000 home, the IVA alone would be €50,000!
- AJD: This stands for Actos Jurídicos Documentados (Stamp Duty). This tax is paid for the legal registration of documents like the deed of sale. The rate varies by autonomous community, generally ranging from 0.5% to 1.5%.
If you’re buying a resale property
For resale properties, you don’t pay IVA. Instead, you pay ITP, the Impuesto de Transmisiones Patrimoniales (Property Transfer Tax). This tax is also set by regional governments, with rates typically fluctuating between 6% and 10%. ITP and IVA are mutually exclusive; if you buy a resale property, you don’t pay IVA.
Taxes to be Paid by the Seller
Don’t think sellers get off easy; they have their own taxes to pay, too. There are two main ones, both related to the “gain” in value, as detailed in this overview of Spanish property purchase taxes.
- Plusvalía Municipal: This is a unique tax levied on the increase in the value of the land itself, calculated and collected by the local city council. In simple terms, it’s a tax on the officially assessed appreciation of the land the property sits on during the seller’s ownership. The law states that this tax is
in theory to be paid by the seller.
- IRPF: If the seller sells the property for more than they originally paid, they have made a “capital gain.” This profit must be declared as part of their income on their personal income tax return (Impuesto sobre la Renta de las Personas Físicas) the following year. The tax rate on this gain ranges from 19% to 26%, depending on the amount of profit.
To make it clearer, I’ve created a simple summary table:
| Tax | Payer | Applicable Situation |
|---|
| IVA | Buyer | Purchase of a new property |
| ITP | Buyer | Purchase of a resale property |
| AJD | Buyer | Purchase of a new property or when taking out a mortgage |
| Plusvalía Municipal | Seller | When the land value has increased upon sale |
| IRPF | Seller | When a profit is made from the sale |
In Spain’s property tax system, everyone essentially has their own role. The buyer mainly pays taxes for the act of ‘acquiring’ the property, while the seller pays taxes on the ‘gain’ from the sale. It might seem complicated, but as long as you distinguish between new builds and resale properties and use this checklist, you’ll have a much clearer picture. I hope this post helps everyone out! Feel free to correct any mistakes or add more information!
