What are the taxes involved with the purchase and maintenance of a house in Spain?

When you buy a house in Spain (whether it is your main residence or your second) there are a few taxes that you need to face as the owner. 

In this article, we are going to break down the different types of taxes that exist with the purchase of a house and its maintenance.

What taxes need to be paid when buying a house?

If you buy a newly built property (in other words, directly to the construction company the moment it reaches the market) you will have to pay 10% VAT on top of the selling price.

If it is a property that is already owned by someone else, the transaction will not involve any VAT payment.

Nevertheless, with this second case, you will have to pay ITP (Impuesto Transmisiones Patrimoniales, or Property Transfer Tax), which applies today when a house changes ownership. 

The ITP tax depends on each Autonomous Community and on the final price of the house, as we explained in this other article. 

Lastly, if a mortgage is needed to pay for the purchase of the house, you will have to also pay the AJD (Impuesto de Actos Jurídicos Documentados, or Tax on Documented Legal Acts), which is also part of the ITP mentioned earlier.

What taxes exist regarding the maintenance of a house?

Once the house is acquired, having the ownership of the property involves the payment of certain periodic taxes.

The most well-known is IBI (Impuesto sobre Bienes Inmuebles, or Real Estate Tax), which is paid once a year depending on the town hall of each location. It is calculated based on the cadastral value of the property.

Another tax that is involved with maintenance of a house is the rubbish tax, which is also determined by each municipality and the characteristics of each house. It can approximately mean 200€ to 300€ a year.

Lastly, some town halls can charge for water consumption related taxes.

How do we manage taxes in secondPROP?

When you buy a second home with secondPROP, you have a clear breakdown of all expenses related to the acquisition of the property and its maintenance.

The price of each share, as you can see in our properties section already includes all necessary costs to pay for ITP and all other legal procedures that the transaction and creation of the SL (LTD) require. 

You will also find next to each property, the calculation of all maintenance costs, both yearly and monthly per share. 

Furthermore, through the mobile application, you will be able to see at all times the accumulated expenses of a certain period. These quantities include maintenance and cleaning costs as well as legal procedure costs, IBI, and rubbish tax.  

If you want more information about these costs, we invite you to read our article about maintenance costs of your home with secondPROP.

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