Taxes: property transfer tax or IVA (VAT)
Which of the following two taxes will be levied will depend on the type and circumstances of the property that you are purchasing. The property transfer tax (“I.T.P.”) is levied on resale properties which you must pay directly to the local government. The General rate for this tax is 6% but in some regions, such as the Balearic Islands, Cataluña and Valencia, etc. the rate is established at 7%. This should be verified beforehand.

If you purchase a newly built property from a developer you will pay a different tax called “I.V.A.” (VAT), which is charged at 7% of the purchase price and is paid directly to the vendor, who then must pay to the central Spanish Government. Note, however, that if you are purchasing a building plot from a company (as opposed to a private person, a commercial location or building or a parking place not related to a home, the VAT will be 16% of the purchase price. There is also another 1% tax called stamp duty (“Actos Jurídicos Documentsdos”) payable only when the sale is taxed with I.V.A..