Property tax in Spain – the most important information

Property tax in Spain plays an important role in the buying process, and it is worth learning about it before deciding to invest on the Costa Blanca. Polish buyers are increasingly interested in the Spanish market, so knowing the local taxes makes it easier to plan costs in an informed manner. The Spanish system differs from the Polish one, with fees depending on the type of property and its cadastral value. Predictable rates and often lower annual charges are an added benefit.

Table of Contents:

• IBI Spain tax – a key levy for property owners
• Cadastral tax Spain – rules of calculation and burden for Polish owners
• Property tax Spain – what costs are incurred by the buyer when buying a house or apartment?
• Spain: property tax – a summary and a safe way to buy

IBI Spain tax – a key levy for property owners

The IBI tax in Spain (cadastral tax) is the basic annual burden imposed by municipalities on all property owners, regardless of whether they are residents or live in another country. Spain’s property tax in this regard covers apartments, houses, plots of land and even parking spaces, with each property accounted for separately.

The amount of tax depends on the cadastral value determined by local appraisers and the rate adopted by the municipality, ranging from 0.4% to 1.4%. The stability of the system guarantees predictability of costs for owners. In practice, the annual charge is most often in the range of 300 to 1,500 euros, although differences between municipalities can be significant. With the support of Home in Spain, Polish buyers can find out in advance the estimated amount of tax and check whether the existing owner has any arrears.

Cadastral tax Spain – rules of calculation and burden for Polish owners

The cadastral tax in Spain is based on a cadastral value set by the municipality, and this amount affects not only the annual charge, but also credit procedures and insurance calculations. In Spain, property tax is levied separately for each property owned, with no possibility of combining charges and no relief based on the number of units.

The rates vary between municipalities – in different regions they range from 0.4% to 1.4% of the cadastral value. The owner has the option to apply for an update of this value if he finds that it deviates from market realities or the technical condition of the property. In this way, the amount of tax can be adjusted to correspond to the actual value of the property.

Property tax Spain – what is the cost to the buyer when buying a house or apartment?

Taxes on the purchase of real estate in Spain include several types of fees, which vary depending on the type of transaction and the nature of the property. When buying a house or apartment, the buyer must take into account both state taxes and the costs associated with notary services. Property tax in Spain governs both the primary and secondary markets, so it is worth knowing the fee structure before making an investment decision. What fees does a buyer incur when buying a property?

• IVA (VAT) – applies to the purchase of new properties from a developer and is normally 10% of the value. For commercial premises or plots of land, it can be 21%.
• ITP (Impuesto de Transmisiones Patrimoniales) – a tax charged on purchases from the secondary market. Depending on the region, the rate ranges from 6% to 10% of the transaction value.
• AJD (Actos Jurídicos Documentados) – legal transaction tax levied on transactions related to the primary market. Most often it amounts to 1.5% of the value.
• Notary and registration fees – include the cost of preparing the deed, registering the property and preparing the documentation. The amount of fees depends on the value of the property and the complexity of the transaction.
• PLUSVALÍA tax – refers to the increase in the value of the land over the years (only applies to secondary market properties) and is usually charged to the seller. In some cases, the parties may agree on a different allocation of costs.
• Expert calculation of costs – the buyer can get a full breakdown of all fees even before signing the contract, which allows to consciously plan the budget of the transaction.

A tax structure structured in this way makes it possible to clearly identify the real costs of the purchase and avoid unforeseen charges later in the process. This allows the buyer to go through the entire process of buying his property in Spain safely and with knowledge.

If you are interested in real estate on the Costa Blanca, with Home in Spain you will have access to a full database of current investments in the best locations of the region. Homes and allow you to choose the perfect space for living, vacationing or investment for rent. Properties in Alicante offer a combination of urban infrastructure and proximity to beaches. Properties in Torrevieja provide a quieter environment with a wide range of new development projects. Home in Spain guarantees on-site support, presence at every stage of the purchase and knowledge of the local market, making the entire process smooth, safe and without language barriers.

Spain: property tax – a summary and a safe way to buy

Knowledge of local taxes allows you to accurately plan both the purchase and subsequent maintenance costs of a house or apartment. We discussed the issue: buying a property in Spain and taxes, making it easier to make an informed investment decision. Cooperation with Home in Spain gives you the certainty of correctly carried out formalities, contact with the municipality, registration of IBI tax and monitoring of payments. Those interested in buying a property on the Costa Blanca can count on expert support to guide them through every stage of the purchase. Property tax in Spain then becomes part of a predictable and calm process, carried out with a local partner.