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When purchasing a property apparently you pay Regional tax, for cabo roig it is 10% of total purchase price is this correct or can you deduct costs of purchase first before tax is applied, certainly takes the shine off buying a property.
bob142
Posted: Tue Nov 9, 2021 2:30pm
Helpful member
Bob 142 wrote on Tue Nov 9, 2021 1:25pm:
When purchasing a property apparently you pay Regional tax, for cabo roig it is 10% of total purchase price is this correct or can you deduct costs of purchase first before tax is applied, certainly takes the shine off buying a property.
bob142
Hi Bob,
It is quite common here in Spain. We did pay 10%. It is an expected cost that the estate agents (or your legal people) maybe should have given you a heads-up on. Sellers also pay a tax or have a certain amount retained in case of any residual debts (electricity etc).
I do not believe there is any tax relief offered to buyers on the costs (the sellers may to reduce capital gains or the equiv) and the same would be true for you if you sold in the UK (for example) so sell price less cost price, less fees....but that is another story.
Not the news you expected maybe, but best wishes.
D & J
Posted: Tue Nov 9, 2021 5:32pm
Legendary helpful member
Hi Bob,
The rate of ITP (property transfer tax) is set at regional government level. For the Comunidad Valenciana autonomous region, the tax is 10% of the purchase price (the last time I looked, Murcia's was 9% and Andalucia was 8%). So if you buy a property for €150,000, ITP in this area would be €15,000. The sort of discounts you mention for offsetting expenses would apply to CGT (Capital Gains Tax) when selling, but do not apply to ITP when purchasing.
There is another tax, PlusValia, which is levied by the Town Hall, but the seller is responsible for paying that, not the purchaser.
Kind regards,
Kim
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Kimmy11 wrote on Tue Nov 9, 2021 5:32pm:
Hi Bob,
The rate of ITP (property transfer tax) is set at regional government level. For the Comunidad Valenciana autonomous region, the tax is 10% of the purchase price (the last time I looked, Murcia's was 9% and Andalucia was 8%). So if you buy a property for €150,000, ITP in this area w...
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...ould be €15,000. The sort of discounts you mention for offsetting expenses would apply to CGT (Capital Gains Tax) when selling, but do not apply to ITP when purchasing.
There is another tax, PlusValia, which is levied by the Town Hall, but the seller is responsible for paying that, not the purchaser.
Kind regards,
Kim
Thanks Kim very helpful, so CGT you can take off estate agent fees then what is the % they charge on your gain?
Kind regards
Bob142
Posted: Tue Nov 9, 2021 8:55pm
Legendary helpful member
Bob 142 wrote on Tue Nov 9, 2021 6:23pm:
Thanks Kim very helpful, so CGT you can take off estate agent fees then what is the % they charge on your gain?
Kind regards
Read more...
Bob142
Hi Bob,
CGT in Spain is calculated on a sliding scale, dependent on whether you're resident in Spain or non-resident and, of course, whether you make a profit. But hopefully, as you've only just bought your property, it will be a long time before you're thinking of selling again and have to be concerned about CGT on your sale.
This summary of taxes in Spain, including CGT, may be helpful for you:
https://www.expatica.com/es/finance/taxes/taxes-in-spain-471614/
Kind regards,
Kim
Kimmy11 wrote on Tue Nov 9, 2021 8:55pm:
Hi Bob,
CGT in Spain is calculated on a sliding scale, dependent on whether you're resident in Spain or non-resident and, of course, whether you make a profit. But hopefully, as you've only just bought your property, it will be a long time before you're thinking of selling again and have to be conc...
Read more...
...erned about CGT on your sale.
This summary of taxes in Spain, including CGT, may be helpful for you:
https://www.expatica.com/es/finance/taxes/taxes-in-spain-471614/
Kind regards,
Kim
Thanks all for your replies very helpful, we have just sold and bought again selling our fees and taxes were just over 8%, buying was 13.5% of house cost, very trying and expensive time would not recommend it hopefully we can now put it behind us and enjoy our new apartment.
Stay safe
Bob142
