Consejos Prácticos sobre Impuestos

Practical Tips

About Taxes

The Value Added Tax (I.V.A.)

VAT (or IVA) only applies when a property is new and / or registered for the first time. If you are the buyer you must pay 10% of the purchase price in VAT.

Transfer Tax (ITP)

ITP only applies when the property is second-hand and registered a second (or more) times. If you are the buyer of a resale property, you must pay 6% (Within the Community of Madrid) on the purchase price in ITP.

Real Property Tax (IBI)

The IBI is an annual duty on property ownership. It is calculated as a percentage (calculated by the City Council) to the assessed value of the land and construction.

Tax on the Increase in Value Of Nature Urban Land or Goodwill

This is a tax regulated by the municipality and the difference is applied to the assessed value of the land when the house was purchased and the property value at the time of sale. Varies by housing characteristics and location. It is the seller's responsibility.

IAJD (Stamp Duty Tax)

This is a tax on legal documents such as those relating to the mortgage on the property, or the purchase of a new home, the buyer must pay this tax amounting to approximately 1% of the mortgage value.

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