Taxes on property transfers in madrid


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An overview of the sales tax or stamp duty that is payable when buying property in Madrid, Spain

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Taxes on property transfers in madrid

  1. 1. Property Sales Tax Rates in Madrid (Source AEAT)
  2. 2. This presentation has been updated and is valid for 2015. *myAdvocate Europe Ltd does not accept responsibility for losses of any type consequent upon reliance on the information contained in this presentation. Property Sales Tax Payable in Spain 2
  3. 3. Property Sales Tax Payable in Spain All new properties in Spain are subject to IVA (equivalent to VAT in the UK & Ireland) whereas secondhand properties are subject to ITP (Impuesto de Transmisiones Patrimoniales). IVA is set by the State government and ITP is set by the regional government. 3
  4. 4. Property Sales Tax Payable in Spain The Spanish government announced on 19/08/2011 that the IVA rate would be reduced to 4%, down from the standard 8%, in order to promote the sale of vacant new properties in Spain. This specially reduced rate was valid until 01/01/2013 when it changed to 10%. 4
  5. 5. Property Taxes Payable in Madrid In the Madrid region, specifically Article 27 of ‘Legislative Decree 01/2010 sets out the rate of tax payable on the transfer of secondhand property and the creation of rights over the property (except for mortgages) as being 6% of the value of the property. 5
  6. 6. Where the property being purchased is a property subsidised by the government then it is subject to a tax rate of 4% if the property is going to constitute the main home of the purchaser Protected or Social Housing 6
  7. 7. Article 29 of D.L. 01/2010 provides that a property acquired by a legally defined 'large' family for the purpose of being their main home is subject to a special tax rate of 4% where: - the family are registered as a ‘large family’ Initiatives for Large Families 7
  8. 8. - any property formerly used as a family home must be sold within two years of buying the new property Initiatives for Large Families 8
  9. 9. A tax known as ‘Actos Jurídicos Documentados’ (Documented Legal Operations Tax) is also payable. In Madrid this amounts to 0.75%, payable on the price of the property as indicated on the property deeds plus the amount of any mortgage to finance the purchase. AJD Tax 9
  10. 10. For more information or assistance with legal or tax matters from our network of local English-speaking property lawyers in Madrid, go to: 10 Property Lawyers in Madrid