Right at the beginning of 2013 tax increases were approved by the Spanish Government and the Government of the Balearic Islands which equally relate to resident and non-resident property buyers and owners:
Real estate transfer tax for buyers
The new tax rate is between 8% and 10% and, depending on the purchase price, graduated as follows:
8% with a purchase price up to € 400,000
9% with a share from € 400,000.01 to € 600,000
10% with a share from € 600,000.01
Considering this graduation, on a sale of a property at a price of € 900,000 a transfer tax of 8.89%, i.e. € 80,000 would be due.
VAT for buyers
The acquisition of a new property directly from the developer, after a short term reduction in 2012 to 4%, since the beginning of 2013 is now 10%, plus a stamp duty of 1.2%.
Income tax for Sellers
Residents and non-residents are now taxed 21% for investment income such as gains from property sales and rentals. This tax is assigned to the fiscal authorities by means of a corresponding tax declaration.
Real estate sales agents who do not reside in Spain are under an obligation to pay, via the buyer, 3% of the sale price to the tax office, immediately at the signing of the title deed. This amount is an advance on the expected profit, which is calculated with the tax advisor and applied to the tax return.
Non-resident sellers must bear in mind that a double taxation treaty exists between Spain and some European Countries, among them Germany. Capital gains from the sale of a property in Spain must therefore be declared and taxed in the home country, although the tax already paid in Spain will be allowed for.