In addition to the price of the property, in each autonomous community you will have to pay some additional costs, but What costs are involved in buying a property in Andalusia, Spain in 2021?
This autonomous community attracts both foreign and national public. The wide variety of landscapes: from mountains and snow, to sun and beach, makes this area of Spain one of the most famous for deciding to buy a second home or a place of rest and retirement.
Taxes when buying a property in Andalusia is a major outlay for most families, who want to know as precisely as possible how much they will pay for their property. In this post we clarify all the costs associated with buying in Andalucía, regardless of the type of property you are buying, whether it is a luxury villa in Marbella, a second hand flat or a townhouse in Nueva Andalucía.
Costs when buying and selling a property in Andalucía
When buying a property we will have to face the costs involved in the purchase of a brand new or a second hand property. These costs are mainly the price of the property to be paid to the seller, and the taxes (ITP or IVA and AJD), plus fees and other services intrinsic to the purchase of the property. This section has been calculated according to the existing costs and taxes for the purchase of a property in Andalusia in 2020.
The selling price
The prices advertised on portals, real estate websites and in general in any media, are always exempt from taxes and other charges unless otherwise specified.
The selling price should not be confused with the total amount to be paid by the buyer.
The rest of the expenses will be proportional to the sale price, that is to say, the higher the price, the higher the amount of taxes and expenses to be paid.
Taxes on the purchase of a property in Andalusia
You will have to include taxes in you property- budget. Below we detail all the taxes and expenses that may arise when buying a property in Spain.
- ITP or Impuesto de Transmisión Patrimonial (Property Transfer Tax)
- VAT or Value Added Tax:
- Impuesto de Actos Jurídicos Documentados (AJD) (Stamp Duty Tax)
- Notary fees
- Land Registry
- Gestoría
- Lawyer or other advisory services (optional)
ITP or Property Transfer Tax (Impuesto de Transmisión Patrimonial)
If we decide to buy a second hand property, the transfer tax (Impuesto de Transmisiones Patrimoniales) will be applied. The ITP is a tax depending on the autonomous community. In Andalusia, the ITP would be as follows:
UPDATE 29/04/2021: Until 31/12/2021 in order to promote the economic recovery in Andalusia, the ITP has been reduced to 7%, without brackets. In other words, 7% would be paid regardless of the purchase price.
For the purchase and sale of a property for resale, i.e. second or subsequent sale, the ITP rates are as follows:
AMOUNT OF THE PURCHASE RATE
From 0 to 400.000€ 8%.
From 400.000,01€ to 700.000€ 9%.
From 700.000,01€ onwards 10%.
It is a cumulative tax.
There are bonuses to this tax: the rate to be applied would be 3.5% for the purchase of a property for less than €130,000, for a primary residence if the buyer is under 35 years of age and resident in Spain.
Individual parking spaces that are not attached to a dwelling (and the maximum number of attachments is two) are taxed as follows:
AMOUNT TAX
From 0 to 30.000€ 8%.
From 30.000,01€ to 50.000€ 9%.
From 50.000,1€ onwards 10%
VAT or Value Added Tax
This is the most common tax in Spain, levied on the vast majority of goods and services. For the purchase of a property, VAT would be applied as follows:
- The direct purchase and sale of a completed property (first delivery) from a developer is subject to VAT at a rate of 10%.
- The purchase of a parking space on first supply is subject to VAT at the rate of 10% if it is attached to the dwelling being purchased, and 21% if it is independent.
- The purchase of premises, if subject to VAT, is subject to VAT at the rate of 21%.
- The purchase of a house under construction is subject to 21% VAT.
- The transfer of building land is subject to 21% VAT.
All purchases subject to VAT are also subject to AJD, at the general rate of 1.5%.
VAT is paid directly to the selling party at the time of execution of the deed of sale.
Stamp Duty (AJD in Andalucia) – New modification 2021.
UPDATE 29/04/2021: Until 31/12/2021 to boost the economic recovery in Andalucia, the AJD has been reduced to 1.2%.
This tax will be paid for the purchase of the property regardless if it is new or not, however the amount would be different. That is to say, it is payable on the purchase of a new property as well as on a resale. In Andalucia the AJD is fixed for a resale property (check the cost with your notary) and it is 1.5% of the amount of the sale for a new property, but there are three cases of reduced rates:
- 2% for investment in primary residence for an amount of less than €130,000. (new modification in 2020)
- 3% for persons under 35 years of age for their primary residence if less than €130,000.
- 3% for persons with a disability equal to or greater than 33%.
Important note: This tax has been modified and if you apply for a mortgage, the AJD of the mortgage must be paid by the banks, so the consumer will not have to pay this part. However, the consumer will have to pay the AJD of the sale and purchase. The expenses derived from the application and formalisation of the mortgage are not contemplated in this entry (opening commission, study, valuation, etc), and must be contemplated and can be between 1% or 3% of the amount requested.
Notary fees
For any type of property purchase transaction, it is necessary to go to a notary’s office where the public deed of sale will be signed. These services have a fixed cost, which can vary between 600€ and 1000€.
Land Registry
Once the deed has been signed it must be registered in the Land Registry which can vary between 300€ and 2000€ depending on the price of the property.
Processing Agency:
It is very common for an external agent to take care of the formalities related to tax payments, inscriptions in the registry and payment to the notary.
If you apply for a mortgage loan for the purchase, the bank will offer you its own agency to take care of these formalities. You can choose one that you trust, or even entrust the Notary’s office with these formalities by depositing a Provision of Funds.
These procedures usually cost between €200 and €500, but this can vary as it is a private service.
Frequently Asked Questions when buying a property
Buying a property, whether new or second hand, usually generates a lot of questions and doubts for the buyer. In this section we have compiled the most frequently asked questions we receive from our clients.
If you have any additional questions that we have not answered, please write them in the comments section and we will answer them as soon as possible.
How to calculate the costs when buying a second hand property in Andalusia? Practical example:
How to calculate the costs when buying a second hand property in Andalusia? Practical example:
When do you pay VAT and when do you pay ITP in Spain?
Depending on whether you are buying a new property or a second hand property you will pay either VAT or ITP (Impuesto de Transmisiones Patrimoniales). The VAT rate when buying a property in Andalusia is 10% (with the exception of land under construction). The Impuesto de Transmisiones Patrimoniales or ITP is between 8% and 10%. For more information on how to calculate the ITP you can check our Tax Calculator.
When do I have to pay the ITP and AJD?
The deadline for payment of the ITP and AJD is 30 working days from the date of execution of the public deed of sale (or of the act or contract that generates the tax)
When must VAT be paid on the purchase of a new property?
VAT is paid directly to the selling party when the deed of sale is signed.
On what basis is the ITP calculated?
It is important to bear in mind that the ITP or transfer tax is calculated on the basis of the real value of the property transferred. Namely, its fiscal value for the tax authorities.
Is the cadastral value the same as the tax value?
No, the cadastral value depends on each municipality, and they use it as a basis for the calculation of taxes, while the fiscal value depends on each autonomous community and also considers the cadastral value of the property. Long explanation short, the cadastral value would be u0022the basisu0022 for calculating the tax value of a property.
How is the tax value calculated for the tax authorities and how much ITP will I pay?
You will pay the ITP according to the tax value of the property you are going to buy. To see the tax value of the property you can check it on the Tax Office website and look for the value of your autonomous community. You can consult the coefficients for calculatingu003ca href=u0022http://www.juntadeandalucia.es/economiayhacienda/apl/surweb/consultas/bienesUrbanos/valUrbana.jspu0022u003e the tax value of the Junta de Andalucía by clicking on the link above.u003c/au003e
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