In Spain, there are several main taxes on real estate and income, which vary depending on property type, residency status, and income type. Here is an overview of the key taxes:
Property Tax (Impuesto sobre Bienes Inmuebles, IBI):
– For urban properties, the tax rate is up to 1.1% of the cadastral value.
– For rural properties, the rate can reach 0.9% .
– This tax is paid annually and varies by region and specific municipality.
Tax on Rental Income from Real Estate:
– For non-residents, the rate is 24% of the rental income.
– For EU residents, the rate is 19% .
– Income is considered without deducting expenses if the taxpayer is not an EU resident.
Income Tax (Impuesto sobre la Renta de las Personas Físicas, IRPF):
– A progressive tax scale applies to residents, with rates ranging from 19% to 48% depending on income level.
4. Capital Gains Tax on Property Sales (Impuesto sobre la Renta de No Residentes, IRNR):
– When a property is sold, a capital gains tax is applied (calculated as the difference between the purchase and sale price).
– For non-residents, the rate is 24%, while for EU residents, it is 19% .
– Capital gains are calculated based on the difference between purchase and sale prices, with certain allowable expenses (e.g., for renovations) taken into account.
5. Wealth Tax (Impuesto sobre el Patrimonio):
– This is a tax on the net value of assets (including real estate) owned by the taxpayer.
– It applies to affluent taxpayers, with an exemption up to a certain amount (typically around €700,000, depending on the region).
– Rates range from 0.2% to 3.5%, depending on the region and the value of assets.
6. Transfer Tax (Impuesto sobre Transmisiones Patrimoniales, ITP):
– This tax applies when buying second-hand property (not new).
– The rate ranges from 6% to 10%, depending on the region.
– For example, in Catalonia, the transfer tax is 10% of the property value, while in Madrid, it ranges from 6-8% .
7. VAT on New Property (Impuesto sobre el Valor Añadido, IVA):
– When purchasing new property, the buyer pays 10% VAT on the purchase price.
– For commercial properties and land, the rate can reach 21% .
8. Municipal Land Appreciation Tax (Plusvalía Municipal):
– This tax is levied by municipalities and depends on the increase in the land value from the time of purchase to the time of sale.
– The rate and amount depend on the region, duration of ownership, and cadastral land value.
– Recently, changes were introduced in Spain to make this tax fairer, considering the actual market value.
These taxes can vary significantly across autonomous communities, so it is advisable to consult with a tax advisor or lawyer in Spain before any real estate transaction or income planning to account for regional specifics.
