If you’re interested in buying property in Spain, you need to learn as much as you can about the market.
Spain’s house price index rose by more than 4% in a quarter. Understanding the types of taxes that you’ll pay when buying property will make the picture clearer and help you make a purchase confidently.
Here’s what you should know about buying property in Spain and what kinds of taxes you should know about.
Taxes When Buying Property in Spain
Do your research into the taxes that you’ll pay when you buy property in Spain. There are a variety of Spain property taxes that people pay both for buying and selling real estate. You need to also know the circumstances that affect that range.
Here are some of the circumstances to consider:
Understand the Range of Property Taxes
When buying a home in Spain, the property taxes could range from 8% to 12%. This property tax range can depend on several circumstances, such as whether it’s being sold by the bank or if it’s a private sale.
Once you buy a property, you will also be subject to Impuesto sobre Bienes Inmuebles (IBI) taxes. These are taxes charged for owning property in the country.
The range for IBI taxes could vary from .4% to more than 1%.
Consider Capital Gains Tax for Sales
There are also tax implications at play when you decide to sell a property in Spain. These taxes, called capital gains tax, refer to the rate that you pay based on the profits from the sale.
Residents of Europe pay 19% in property taxes in property taxes in Spain. You might pay 24% or more if you’re an outside resident.
Learn About Local Taxes
Make sure that you also consider the local taxes that are at play with a property purchase. Cities and townships charge municipal taxes on top of the standard rate that you’ll pay in Spain.
Consider the place where you’re purchasing property, whether it’s Madrid, Barcelona, Valencia, Seville, or anywhere else. Think about the type of property that you’re purchasing and consider the tax implication based on the locality.
Tips for Buying Property
There are various options at play when you’re buying a property in Spain. Each aspect can affect the tax options that you have.
These tips make the biggest difference:
Choose Your Location and Features
Different areas of Spain have economic factors that you need to pay attention to, both in terms of the property values and other smaller taxes that you’ll need to pay.
When you live somewhere with increasing property values, you’re more likely to also pay higher taxes for your property. Some municipalities in Spain charge refuse collection taxes or other fees.
Consider whether you’re buying a new home in Spain or whether you’re buying a pre-owned house.
Gauge Your Price Range
Always do your research into the price so that you can buy a property in Spain that can serve you as an investment. This means considering the number of bedrooms, bathrooms, and square footage since this can affect the price range.
Choose a property that has the space that you need, along with the age of the home, since they both affect the price range that you’ll get.
View the Property and Make an Offer
If you’re going to make the right property purchase decision, take the time to view the property online or in person. Start with virtual tours and taking in photos and video, and then take a walkthrough so that you can see for yourself the strong suits of the property.
Hire a professional to conduct an official inspection and look into getting a property valuation. Only when you have done this level of due diligence will you feel comfortable placing an offer that will make sense. Study the surrounding real estate market in Spain to submit an offer that will be treated with credibility.
Consider the long-term implications of owning the property so that you’re able to account for maintenance and repairs, utility bills, and a variety of other circumstances.
Use the Help of Professionals
When you’re going to purchase a real estate property in Spain, it’s best to do it with the help of the best professionals that you can find. Speak to some real estate pros that will let you know when new listings are available, and find a bank or other financial institution that can set you up with the lending that you need.
Having the help of pros that you can rely on will make the process easier and will ensure that you don’t miss the boat on a potential opportunity. If you’re a traveller purchasing a property as an investment, consider hiring property managers that can rent it out or handle your Airbnb stays.
The key is to get the best return on investment (ROI) possible so that you can offset the taxes that you pay and make sure that the property is a lucrative and worthwhile opportunity for you.
A Guide for Buying Spain Property
This article will help you whenever you’re buying property in Spain. Knowing about taxes and other details will let you make informed decisions.
When you plan out your strategies far in advance, you will be ready to purchase the property of your dreams in Spain. All you need to do now is get the help of professionals that can make it even easier for you.
Choose Marbella Real Estate can help you with any transaction. Send us a message or call us at +34 711 01 67 35.