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Also in case of sale you have to distinguish between the resident seller, and the non-resident seller.
For non-resident seller the buyer is obliged to retain 3% of the sales/purchase price, this retention has to be paid to the tax office on account of the benefit tax of the seller. The seller after that has to present a tax return declaring the real benefit. This real benefit will be calculated deducting from the sales price, in the first place the original purchase price, and after that deducting any costs made for example renewing the property, transfer tax paid at the moment of purchase, etc. On the result of this calculation a formula will be applied for the devaluation of the property, reducing it a bit more. The non-resident seller will have to pay after that 24,75% (at least at this moment, may 2014, the government can change the percentage in the future), on this benefit, the 3% retained previously by the buyer will be deducted from this amount. In case the seller has had no benefit or the 3% retained is too much, the seller can apply for the money to be returned.
In case you have renewed the property but you have not included this renewal in the property register (by the “ampliación de escritura de obra nueva”), you should do this before signing any sales deed. This can be used to update the value of the property, and so pay less benefit tax afterwards.
As a resident if you sell your property, if you are over 65 years old and you have lived there for more than 3 years, no benefit tax is due. If not, the sale has to be declared in your normal income tax form, and the benefit will be taxed accordingly. But as a resident in case you reinvest the money within two years after the sale in another property, the reinvested amount will not be taxed.
Also once you are a happy house owner in Spain you start paying taxes. The amount you have to pay depends on whether or not you are a resident and whether or not you have any income from your house, renting it out.
Being a resident normally you will not pay tax on your main resident, unless you rent it out as well, in that case the rental income will be added to your normal income, you can deduct the costs you have made and the costs (for instance light and water consumption) you have paid for the period the house was rented out.
As a non-resident you have to pay for the rental forfait of the property, and/or for the real rental income. The rental forfait tax is based on the kadaster value, which has to be multiplied by 1,1% or 2% (depending on when the kadaster value was established), and you pay (for the last year) 24,75% on this amount. If you have had rental income this same percentage will be applied on your benefit. For this tax you will not receive any notification, you have to present it yourself (or ask someone else to do this for you).
Apart from that you have to count with a couple of other taxes, the IBI tax, or “Impuestos Bienes Inmuebles”, also based on the kadaster value, and paid usually in august/september. This receipt will be send to your house, and the easiest way to deal with it is to ask the bank to deal with this automatically. Same for the “basura” tax, a municipal tax, also issued (at least in the Comunidad Valenciana) by SUMA, and also for this one the easiest way is to domicile this one.
Owning a house in Spain obviously means spending money on your house. In the first place when you buy the property, apart from the `price of the house you have to pay notary costs, transfer taxes (10% of the declared value at this moment in the Comunidad Valenciana) and the property register.
Apart from that you may choose to get professional help, a lawyer to help you with the legal side of the purchase, an architect to check the property, a real estate agent to help you find the property…
You may want to buy with a mortgage, and even if this is not the case the bank will charge you with a fee for issuing a bankcheque….
Here I will only comment on the financial side of the purchase:
Let’s say you want to buy a nice penthouse first line beach in Javea, the house of your dreams… this property comes with a price tag, € 300.000!!!!! WOW
You have saved some money, after all you’ve been working for 40 years and bit by bit you’ve been able to scrape together the amount of € 100.000. This means you have to get another € 200.000 from the bank, right??
Yes, the house costs € 300.000, you have € 100.000, the difference is € 200.000. But you have not counted with the additional costs. Let’s start:
- the price of the property € 300.000
- Notary and register costs, let’s count 1% to be on the safe side: € 3.000
- transfer tax: 10% of € 300.000 = € 30.000
- legal survey / lawyer: between 0,5% and 1% (let’s say € 2.000)
- architects survey: could be anything between € 500 and € 1.000 (let’s say € 500)
- Bank valuation: could be anything between € 300 and € 500 (let’s say € 300)
- costs of mortgage: starting price at € 7.500 (if you get a mortgage, rather difficult nowadays, but that’s quite another story)
- bank cheque, could be about € 300
- commission for real estate agent normally will be paid by the seller
So more than € 40.000 on top of the € 300.000 you counted.