Taxes on Spanish property purchases – important information
Property prices are now recovering but it may be some years before they reach pre crisis levels. When purchasing Spanish a property in Andalucia the transmission tax (stamp duty) is 8% of the value. Tax authority calculations vary but in this region the tax authority uses a multiplier or coefficient for each area which is based on the rateable value.
For example if you buy a property in Mijas in Andalucia at the current rates the tax authority will multiply the rateable value by 1.21 and check that this is the 8% transmission tax amount declared on the tax return. However in the current market it may well be that the fiscal or tax figure the authorities refer to is more than the property is actually worth on the open market. You would then receive notice of a complementaria – an additional tax bill. A sanction is added if the value is less than the rateable value.
Taking a property in Mijas as an example you might buy for 100.000€ while the fiscal value is 121.000€. You would then receive an additional tax bill of 1.680€. It is very important to ensure that the tax authority has the correct address for notifications or that your lawyer ensures they will receive any tax bills. This is particularly important because there is a time limit on appealing these decisions which is 30 days from date of receipt.
To appeal you need a surveyor’s report (arquitecto técnico) showing that similar properties in the area have a similar market value, or that the property is in a very poor state of repair. Be aware that tax values and procedures can change so it is very important to get the correct legal and tax advice when buying and selling property in Spain. If you fail to get notice of a tax bill the authorities can put an embargo or debt against the property. Spanish property law specialists can advise further on your tax liabilities on purchase and sale and ongoing property related taxes.
For more information please contact [email protected] or call 952 931 781.