In order to own a house in Spain, it is essential to execute all the necessary documents properly, both those of the conveyance and those corresponding to the mortgage. Then, if you decide to sell it in the future, you can do so with every security.
The most important document is the Deed of Sale, which is a contract signed between the buyer and the seller in the presence of a notary, who guarantees that everything is correct. This document proves who the property belongs to, its characteristics and that everything is duly in order.
Once this has been signed, the conveyance must be recorder in the Land Register, to protect the title over the property.
Stamp Duty must then be paid, equivalent to 1.2 %* of the value of the transaction.
The acquisition of a property is also subject to taxation, under a different tax depending on whether it is purchased new or second hand:
- If it is new, the transaction is subject to Value Added Tax (VAT), at the rate of 10%*.
- If it is bought second-hand, it is subject to Transfer Tax, at 7%*, Depending on the Autonomous Community in which the house is situated.
All these concepts in total represent around 10% of the purchase price.
There are also two local taxes, the amount of which varies, depending on where the property is situated:
-Urban Land Increment Tax, officially payable by the seller, but which is often paid by the buyer. It only has to be paid once, on making the converyance.
- Rates (Real Estate Tax), which depends on the official value of the property and is paid annually.
It is also worth knowing that for certain houses built in residential estates, with special services and communal areas (leisure facilities, gardens/parks, swimming pools, etc.) a regular contribution has to be paid for the care and maintenance of these facilities (community charges).
*Tax rate in force at October 2001, subject to variation according to the law.