OUR EXPERTISES > PRIVATE CLIENTS & FAMILIES
Property Tax in Spain
Purchasing Property in Spain
- If you purchase a new build property, which has never previously been occupied, you need to pay the equivalent of VAT (Impuesto sobre el Valor Añadido – IVA – in Spanish) which is 10% of the price, and Stamp Duty, 1.5% Legal Documentation Tax (Actos Jurídicos Documentados – AJD – in Spanish).
- If you’re buying a resale property that has previously been occupied, you need to pay transfer tax (Impuesto sobre Transmisiones Patrimoniales – ITP – in Spanish) which is calculated on a sliding scale depending on the purchase price. The national rule of ITP is 7%, but many of the autonomous regions have applied higher local rates.
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Buying Spanish Property Through a Company
- International property structures are not cheap to set up and maintain, so the potential savings in terms of tax must be substantial if they are to be financially viable. If a property is worth £1m or more then this may be a good route to consider.
- You must be able to demonstrate a controlling stake in the company e.g. direct or indirect control over the voting rights and the power to name/remove the majority of board members.
- If a foreign property has been owned through a limited company or other corporate structure, which has conducted basic tax-planning for a number of years.
- If the company’s tax obligations have not been complied with, might the structure fall within the definition of aggressive tax planning?
If you are considering purchasing a Spanish property through a company it is essential that tax and legal professionals should review the structures used to buy property to ensure compliance
Unfortunately, many Spanish property owners who created corporate structures to purchase their property years previously and have given them little consideration since. The Spanish tax authorities are aware of this and if a company was created before 2018 and the tax position has not been assessed recently, they may investigate.
What makes Del Canto Chambers the right choice for you?
Del Canto Chambers’ dual-qualified, multilingual tax lawyers have handled over 500 complex cases from Europe, the Middle East, Latin America, and Asia. Discerning London-based and international clients, corporations, solicitors, and tax advisors count on our expertise.
You can more about what clients have to say, about working with Del Canto Chambers here below.
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