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Taxes & Purchase Costs When Buying Property In Ibiza

by lasanclas, March 5, 2014

– GENERAL

Foreigners wishing to buy or sell a property in Spain must be in possession of a tax identification number (Número de Identificacion para Extranjeros), NIE number in short.

1. LAND TRANSFER TAX (Impuesto sobre Transmisiones Patrimoniales)

When buying real estate, which is not composed of new buildings, you have to pay a Land Transfer tax (Impuesto de Transmisiones Patrimoniales).

This tax is payable within one month after the signing of the public sales-purchase deed (escritura de compraventa) and is always paid by the buyer.

In Ibiza it amounts to between 8-11% of the notarized sales price and is graded as follows:

up to € 400.000,-
= 8%
from € 400.000,01 to € 600.000,-
= 9%
from € 600.000,01 to € 1.000.000,-
= 10%
from € 1.000.000,01
= 11%
(new since 01.01.2016)

In case of late payment, a late payment surcharge has to be paid.

– Municipal Capital Gains tax (Impuesto de Plusvalía municipal)

This is a communal or municipal tax, which taxes the increase in value of the property since its last sale. This increase in value is determined by applying an annual percentage, fixed by the competent local authority, to the value of the property.

By law this tax is payable by the seller, even though in the past and even today, the parties sometimes agree that the buyer takes care of this payment.

2. VALUE ADDED TAX (VAT = Impuesto sobre el Valor Añadido)

When buying first occupancy real estate, you must pay the value added tax, which is differentiated as follows :

New construction:
10% (VAT)
Land:
21% (VAT)

ADDED COSTS FOR PURCHASE OF REAL ESTATE

Further costs, that arise when purchasing a property, are notary fees and Registration costs at the Land Registry, which total about 3% of the notarized purchase price.

This post is also available in Deutsch and Español.