I am going to buy a property in Spain, what should I know?

Normally, the first step when the will of the future buyer to acquire the property already concurs, the first thing that is usually done is to sign a signal contract, sometimes with the intermediation of a real estate agency, in which a small part of the price will be paid as a reserve (down payment), which will later be deducted from the final price of the property.

At Asgard Lawyers we will take care of verifying the ownership status of the property and if it is free of charges. Check in this way if the seller is authentic and if there is more than one owner, if the property is seized, mortgaged, etc. In some cases it is also advisable, especially if the property is a certain age, to have an architect visit and inspect the property before signing and check its urban conditions. If you do not know an architect, at Asgard Abogados we have collaborated with many throughout our professional career and we will be able to refer you to the most appropriate and closest to the property you wish to buy.

At Asgard lawyers we know that it is important, in the case of the buyer, to make sure that the property to be acquired does not have any charges or hidden defects that could cause us problems in the future, as well as that the conditions that we agree with the Bank are as beneficial as possible and of course, that do not contain abusive clauses. And in the case of the seller, make sure of the solvency or financial capacity of the person who is going to acquire our property.

 

By: Fernando Rodríguez Tamayo

Founder Partner

 

 

VAT or ITP: tax differences when buying a new or second-hand house


Buying a new house or a second-hand one is different. What you should review in each case and even the documentation you should request changes. In addition, there is one more thing that is also different: taxes.

When buying a new house from a real estate development you will have to face some taxes. When you buy a second-hand one, to different ones. Let's see them all!

Taxes when buying a new home

When acquiring a new house through a cooperative, promotion, or the construction company itself, VAT will have to be paid. The Value Added Tax is applied to newly manufactured goods, which have not passed through any other hand until reaching the first natural person (you, the buyer).

In Spain, there are several types of VAT: general, reduced, and super-reduced.

The VAT rate applied to newly built homes is reduced by 10% in general. That is the tax you will pay for your new house.

The exception is marked by official protection housing of the special regime or public promotion on which the super-reduced VAT of 4% is applied.

In addition, in the Canary Islands, the Canary Islands IGIC will be applied instead of VAT, which establishes a general VAT of 6m5% and a reduced one of 3% for social housing.

Taxes when buying a second-hand home

VAT is not applied to transmissions of used housing. This type of purchase-sales is taxed by the Property Transfer Tax (ITP), just like second-hand purchases on Wallapop and other platforms, at least in theory.

Unlike VAT, ITP is a tax transferred to the autonomous communities, so the percentage to be paid is not the same in all regions. In fact, the differences are quite important.

In addition, the ITP differentiates between the use that is going to be given to the home, who buys it or the amount of the operation.

The following table from the Idealista real estate portal establishes how much you will pay in each autonomous community in general:

 

In Andalucía (Málaga), 7% is currently being paid on the average ITP.

On these records, there are reduced rates of between 0.1% and 1.2% for the habitual residence of large families, for VPO, or for houses whose price does not exceed certain amounts.

In addition, the ITP is not automatically included in the invoice but must be settled later. In other words, you will have to pay off-model 600 within 30 days of purchasing the home.

By: Fernando Rodríguez Tamayo

Founder Partner

 

 

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