The steps to buying a property in Spain: Part Two

Step 5: Taxes
For the buyer: transfer tax( ITP-impuesto de transmisiones patrimoniales) and stamp tax(impuesto de actos jurídicos documentados).
If the seller is a real estate developer, a builder, a promoter or represents a first time transfer, then the buyer pays VAT TAX instead, meaning 7% for housing, 16% otherwise (excluding garage, comercials, etc.). If for housing, you have to add a stamp tax, in this case reduced to 0.5%, depending on the region (for Madrid it’s 1.5%).
Some special conditions apply for the Canary Islands.
For the seller: a local tax called the plusvalia
With a copy of the deed in hand, the seller must go to the City Hall (or wherever local taxes are paid). After filling out the form, the seller will receive in the mail a notice of how much they have to pay. This amount is calculated based on the number of years the property was held, and on the property’s valor catastral. Be aware that each town has a different procedure regarding payment of this plusvalia. It’s best to ask at the notary’s office about this payment.
Step 6: Property Registry
If you want to be sure that your rights to the property are fully protected, you must register your title deed at the local office. – The closest local office, ask at the notary´s office about which office the property belongs to.) You can also check the original deed of the seller too.
The property registry is also a structure where you can find all kinds of information regarding the property that you are interested in buying, for example, the modification (if there was any reform made on the house), inheritance (if the property was passed on through family or relation), mortgage (if there is any mortgage made on the property), debts (if there is any payment due to the bank or financial problems), m2 (if the squared metres of the property you wish to buy is correct and not less than stated), ownership (if the seller is really the owner), etc..
Don’t forget to use the resources available to check out the property before you tke any steps.
Always check!!!
See you next month!