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Property Purchase Taxes Andalusia

Property Taxes in Andalusia when Buying a Property

Property Taxes when Buying a Property in Andalusia

Buying a property in Spain is a straight-forward process. Each autonomous region has the right to set its own taxes, so differences do exist, although small. We help people buy and sell properties in Andalusia, in the provinces of Málaga and Cádiz. So, we provide information from the Junta de Andalucia’s website regarding the taxes levied on purchase and you can find general information on taxes levied on the Seller by the Town Hall, here. On the whole, budget about 13 – 15% on top of property purchase price for attendant costs. (Buying at auction has different requirements, find more here.)

 

Tax Payable – New Properties

First Transmissions of properties attract 10% tax plus a stamp duty on the drafting of the first title deed which is 1.5%. Total is 11.5%

 

Tax Payable – Resale Properties

For most people you pay 8% up to the first 400,000€, 9% on next 300,000€ and 10% on all amounts accruing after that.

The amount owing is calculated by multiplying the relevant band with the applicable coefficient as follows:

  1. Transfer of Tangible Assets

a) Property Transfer:

  • As a general rule, in the transfer of immovable property, as well as in the constitution and assignment of rights in rem over them, except in the real rights of guarantee, the tax rate will be obtained by applying, on the basis of the liquidation, the rate that results from the following rate:
Band payable in EurosTotal Fees EurosAmount Due EurosRate Applicable
0.000.00400,000.008.00%
400,000.0132,000.00300,000.009.00%
700,000.0159,000.00There after10.0%
  • Garages attached to the Property Purchase are included in the rates above, with a maximum of two. After which, in the case of transmission of buildings classified as urban parking space, the following rates apply:
Band payable in EurosTotal Fees EurosAmount Due EurosRate Applicable
0.000.0030,000.008.00%
30,000.012,400.0020,000.009.00%
50,000.014,200.00There after10.0%

b) Transmission of movable property and livestock

(as well as the constitution of real rights over them other than the guarantee):

  • 4 %, in general
  • 8%, on the transfer of boats of more than 8 metres in length and on vehicles of more than 15 horse power and objects of art and historical antiquities.
  • 5% in the transmission of real estate where the real value does not exceed 130,000 euros and it is to be the Buyer’s permanent residence and the buyer is under 35 years of age, or 180,000 euros in the case of a permanent residence where the Buyer suffers from a disability which is registered and measured as being equal to or greater than 33%.
  • 2% in the acquisition of housing for resale by a natural or legal person who carries on a business activity to which the rules of adaptation of the General Plan for the Real Estate Sector apply. (Aimed at constructors, developers and banks with repossessions, for example.)
  • 1%, for financial instruments of real security rights, pensions, bonds, loans and cession of credits.
  • Leases are governed by the scale of tax fixed by Law.

* With effect from January 1, 2015, tax rate offsets will be applied in the creation and exercise of purchase options in lease agreements related to certain payment operations.

Budget 13 – 15% on top of Property Purchase Price

In addition to the taxes there is also the need to pay stamp duty for new builds on the pages notarised for the Title Deeds, as well as general application of Notary’s fees, Land Registry fees and Lawyer’s / legal assessor’s fees (Gestor).  These days, most mortgage set-up costs are assumed by the lender. As a rough rule of thumb, allow 13% – 15% on top of the Purchase Price and note stamp duty for new builds.

Disclaimer: TMT Spain Real Estate has provided this information as a general guide only and it must not be relied upon in place of legal advice. Legislation is constantly updated and the reader must satisfy herself/himself of the accuracy of these contents.

 

“The ache for home lives in all of us, the safe place where we can go as we are and not be questioned.” 
Maya Angelou

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Cow and Calf Seek Shade in Bolonia

Cow and Calf Seek Shade on Bolonia Beach Costa de la Luz Andalusia

Cow and Calf Seek Shade on Bolonia Beach

This cow took her calf to cool down by the water’s edge in Bolonia and came across a deserted parasol. She hunkered down offering shade to her baby calf , meanwhile surprised onlookers crowded around to take photos. The cow began to feel uneasy with all of the attention and by the time the owner of the parasol came back, about five minutes later or so, the cow and calf had been frightened off. The parasol owner had to catch up on the whole experience via video streams and photos. This was an unforgettable experience for all who witnessed it, adding a touch of the surreal to a hazy, hot day.

Bolonia, on the Costa de la Luz, is about 15 minutes from Tarifa where the Atlantic Ocean meets the Mediterranean. This particular beach is popular with day trippers because of its natural beauty and its oneness with nature. Every once in a while it attracts the local bovines, too. But not usually as boldly as this occurrence on 1st July 2017. It’s not unheard of to see cows on the beach and social media are awash with such images. In general, though, cows roam around the country lanes, and don’t usually venture onto the beach when a lot of humans are there.  This video link was recorded by Pedro Fernandez and syndicated to ABC Andalucía.

Andalusia is a wonderful autonomous region of Spain and it is always popular with holiday makers and locals alike. Unsurprisingly, it draws people from all over Spain and beyond. This breed of cow, pictured here, Retinta, is very common. These dark brown cows can be seen wide and far in the fields and hillsides, from sleepy rural inland villages to remote beach side resorts.

Bolonia is a must see destination with the most complete Roman town ruins yet uncovered in Spain just a short distance away. Do yourself a favour and put it on your ‘to do’ list. The place can be seen in a day if you are on holiday and there is some wonderful accommodation available in many distinct places: Algeciras, Tarifa, Alcaidesa and Sotogrande as well as rural villages like Jimena de la Frontera, San Pablo de Buceite and Gaucin. Bolonia itself has guest houses and hotels which fill up fast in Summer, but with a little planning all is possible. Although you’ll need to be lucky to see a cow and calf seek shade like this.

Baelo Claudia Roman Ruins
Much to see in Bolonia – Baelo Claudia Roman Ruins
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Spanish Mortgage Costs Supreme Court Ruling – Lender Pays.

Good news for people buying Spanish Property with a Spanish Mortgage: Spanish Mortgage Costs Supreme Court Ruling – Lender Pays.

Spanish Mortgage Cheaper

In the past, buying a Spanish property by taking out a mortgage added up to 4% on the Property Purchase Price. This pushed the costs on top of the net property price to as high as 15%. Much of this happened because the mortgage lender forced you to assume the costs of the mortgage. Incidentally, this was a cost you could not claim against or offset as costs against income when you submitted your tax return because you were not the benefactor of the arrangement.

Spanish Legal System Defends Consumer

The Spanish Legal System should be applauded for its support of the ordinary consumer in this way and let’s hope it leads to renewed confidence in the property sector within Spain. Once more, the conclusion is that, with property prices still subdued, it is a Buyer’s Market and there has never been a better time to dip your toe’s in the market. This applies if you seek to take out a mortgage or pay for the property outright.

[Sentencia TS 705/2015]

The Supreme Court has analysed contractual terms between banks and consumer and adjudged them to be Unfair Contract Terms. As a result, all costs attributed by the bank to the consumer in which it is the bank who is the passive subject and could, in theory, deduct such costs from tax returns, must be borne by the bank.

Obiter Dictum

The Obiter Dictum of the decision looked at costs derived as a by-product of contracting the mortgage. This refers to Notarial, Land Registry (notifying the Charge against the Property  on behalf of the Mortgage Lender), Transmission Tax, Stamp Duty for documents drafted in the Notary and other costs stemming from the mortgage – including Mortgage Indemnity Protection.

The judgment is available here, (in Spanish only): http://www.poderjudicial.es/stfls/TRIBUNAL%20SUPREMO/DOCUMENTOS%20DE%20INTER%C3%89S/TSCivil%2023.12.15%20%282658-13%29.pdf

Minutes of the Decision here, (in Spanish only):

http://www.poderjudicial.es/stfls/TRIBUNAL%20SUPREMO/DOCUMENTOS%20DE%20INTER%C3%89S/Nota%20de%20la%20Sala%20de%20lo%20Civil%2021%20de%20enero%202016.pdf

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A couple and a house under a Spanish Sunset

Property Prices Rise 5.7% in 2016 – Britons Lead the Way

Property Prices rise – now is the time to buy.

  • House Buying was up 13.9% in 2016 compared to 2015
  • A quarterly increase of 1.9% in the IPVVR (Case & Shiller Methodology of the price of housing applied to Spain)

    Property Sales

  • 93,423 operations as property prices rise
  • 11.2% more than in the same quarter of 2015
  • The best result of a fourth quarter of the last seven years.
  • The year 2016 has broken the 400,000 registered sales barrier with 403,743
  • Best year-on-year figure since mid-2011, with an annual increase of 13.9%. However, behaviour remained distinct with resales increasing to 18.5% while new housing showed a decrease of 3.2%.

Property Purchases by Foreigners

  • Ex-pats and second home owners find the bargains – unphased by BREXIT.

Brits Top New Owners Figures

The fourth quarter of the year shows the highest percentage of foreign purchases in 2016, with 13.6% of home purchases.
13.3% of purchases were made by non Spaniards, around 53,000 operations, of which the British led the way.

Mortgage Patterns and Stats

  • The average mortgage debt for 2016 was € 111,656, a year-on-year increase of 2%.
  • Fixed interest rates were up by 31% in respect to new mortgage loans, a new historic high.
  • As property prices rise there is growing availability of Mortgages
  • Average mortgage loan in the fourth quarter was 524.7 euros.
    1.7% lower than the previous quarter, while the percentage of salary it cost to pay the mortgage went down 0.45 percentage points to 28.3%.
  • Year-on-year results marked new historic lows (over the last fourteen years), with € 522.6 million and 27.5%. With respect to 2015, it represents a decrease of 2.7% in the mortgage rate and -0.88 pp. with respect to wage cost.

It’s a great time to buy.

Note: The complete report can be accessed (in Spanish) at the following link: http://www.registradores.org/portal-estadistico-registral/estadisticas-de-propiedad/estadistica-registral-inmobiliaria/  Spanish Land Registry.

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Sun shining on Spanish property market again

Now  is the time to add to your portfolio. Don’t take our word for it. The  Daily Telegraph article says it all.

IMF hailed Spain’s remarkable economic rebound and overseas property buyers, particularly from the UK, are returning.

Spain GDP forecast to reach 2.5 per cent in 2016, outperforming the UK and Germany

Spain gives you a great deal. The OECD research, which has been running for over a decade, plots local prices against typical wages and then sets this against the long-term average. It concludes Spain is currently a good investment prospect. This is borne out by the EuroStat House Price Index which shows Spain at 75.29 versus Britain’s 125.9 (Anything under 100 is exceptional value, over 100 overpriced).

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