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What are the local taxes in Spain?

The following taxes apply to both residents and non-residents and are divided into several categories:

Real Estate Tax (IBI)

This is an annual charge administered by the local council for residential properties. This tax is borne by the owner and is calculated on the basis of the ‘cadastral value’ of the property.

Municipal Capital Gains

Officially known as ‘Impuesto Sobre el Incremento de Valor de los Terrenos de Naturaleza Urbana’, this tax is levied on the increase in value of urban land at the time of sale, excluding the value of buildings. It is calculated on the ‘cadastral value’ of the land at the time of accrual, with a revaluation according to the years elapsed since the last transfer.

Property Transfer Tax

Value Added Tax’ (VAT), applicable at 10% on new, second-hand and unregistered properties. In addition, there is a stamp duty, similar to stamp duty, which in the Valencian Community is 1.5% (or 0.15% if purchased as a principal residence).

Transfer Tax

For other residential property acquisitions, the ‘Impuesto sobre Transmisiones Patrimoniales’ is applied, approximately 10% in the Valencian Community, with variations depending on the region.

VAT

General VAT is 21%, with reduced rates of 18%, 10%, 8% or 4%, depending on the type of goods or services.

Solid Waste Tax

Charges for rubbish collection, managed in the Valencian Community by ‘Suma Gestión Tributaria’ on behalf of the City Council.

For more information on taxation in Spain, it is recommended to consult specialised tax advisors.

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