The cost of selling property in Barcelona-as an individual
You are required to pay capital gains tax if there is a profit on the sale of the property:
- Capital gains tax is the main cost of selling property in Barcelona. This amount is based on the difference between in the transfer value (what the buyer paid for the apartment and what the seller previously paid for the same property).
- The tax rate depends on the amount of profit made from the sale. The rates are described below:
|Up to € 6,000||21%|
|From € 6,000 to € 24,000||25%|
|Over € 24,000||27%|
Non-residents are also liable for withholding of 3% tax of the sale price.
The cost of selling property in Barcelona- as a company
If the seller of a property acts as a company or as a legally registered business person, the company is required to pay capital gains taxes on the profit.
- The profit is the difference between the transfer value (what the buyer has paid for the apartment) and the net book value (the seller paid for the property).
- Companies and legally registered business people are taxed at a company’s tax rate: 25-30%.
For more detailed information about taxes, Casamona recommends speaking with a lawyer specialized in taxation in Spain.
If you are interested in buying a property in Spain, there are various costs you need to be aware of. This section will give you a clear overview of what you need to know about the Spanish fiscal system.
Any person who has the intention of purchasing property in Spain is subject to two types of taxes:
a) Transfer tax or the wealth transfer tax is a cost paid to the tax office
- The transfer tax is set at 10%. Example: You are purchasing an apartment for a €100.000 and you are above the age of 32. The apartment itself costs €100.000, however, due to the transfer tax you will have to add another 10% to the value. The final price, excluding the costs of a notary and registration taxes, will be €110.000 for acquiring an apartment.
- The transfer tax can vary depending on the age of the buyer. Investors below the age of 32 will only pay 5-7% tax on their investment. Further exceptions can be made to the transfer tax, depending on the situation of the investor.
- A reduced tax rate of 5% is applied in the following circumstances:
1) Home purchases for families with 3 or more children. The house must become the principal residence and the total income obtained by the family cannot exceed the legal limits (€35.000 approximately).
2) Home purchases for young people (maximum 32 years old). The house must become the principal residence and the total income obtained by the buyer cannot exceed the legal limits (€35.000 approximately).
- Registration taxes are mandatory costs that an investor must pay if he wants to acquire an apartment. These taxes are paid to various authorities within the Spanish system. At times, this process can seem difficult to manage. Therefore you can get a full package with a notary, who then will distribute your money to the appropriate authorities.
- The registration taxes normally accumulate to an amount between €1000 – €2000.
When the property is bought by a company or from a business person, then it is required to pay VAT on your investment. The VAT is set at a general rate of 21%.
Example: If you purchase a property for €100.000 then the final price with VAT will be €121.000. This is excluding the notary and registration taxes.
The first transmission of new properties sold by the developer company is subject to VAT (Impuesto Valor Añadido), as long as the property has not been used for over two years.
If a company purchases a real state from another company, then the transmission is also subject to VAT.
The costs of owning property in Barcelona
Firstly, for all taxation purposes, it is essential to establish whether or not you are classed as a Spanish resident.
Residents of Spain are considered:
- Physically present in Spain for more than 183 days of the calendar year – including occasional absences.
- The main base of professional activities or economic interests are in Spain.
- Spouse and children reside in Spain.
When you have purchased your apartment as a foreigner and paid the obligatory transfer tax, you need to be concerned with several costs: IBI- property tax, community fees, wealth tax, and personal income tax (if you rent the apartment).
- The IBI is a mandatory property tax, which is paid to the local town hall. These taxes are aimed at improving the infrastructure and cleanliness of the selected community.
- Property tax slips are issued by the municipality, normally between the months of September and November. The rate of tax is usually between 1.1% and 2.0% of the cadastral value of the property.
- If you fail to transfer the IBI to the local authorities within the indicated time frame, there will be a penalty charge of 10-20% of the IBI. To avoid such a situation, you can arrange for an automatic transfer to be made with a Spanish bank.
- Both residents and non-residents have to pay IBI.
- Community fees are costs paid to the president of the building. The costs are aimed at the maintenance of the building.
- The cost of the community fees depends on the building and the maintenance required.
- Both residents and non-residents have to pay community tax.
Residents Personal Income Tax
IRPF is paid on income from property in Spain (e.g. income of renting out). If you do pay IRPF, remember to file the relevant forms exempting you from income tax in your home country.
Non-residents Personal Income Tax (IRNR)
IRNR is only paid on income from property in Spain (e.g. income of renting out).
Wealth tax for non-residents
- The wealth tax is a cost based on the net value of the property. Non-residents pay a fixed tax rate of 2.5% per year.
Example: If you are non-resident and purchased your property for €100.000 and you want to know how much your annual costs will be, you have to consider the following:
- Let us suppose that your IBI has been set at €400 by the local town hall.
- The community fees for your building are set at €400 per year.
- Your property is valued a €100.000, the wealth tax dictates that you pay 2.5% of the net value of your property.
This means that a wealth tax of €2500 must be paid to the authorities.
If we accumulate all of the costs, then for this example there will be a yearly tax of €3300 for owning a property in Barcelona, excluding utility costs.
Additional non-residents property tax must be paid. It is calculated based on three values:
- The cadastral value of the property.
- The value as assessed by the Spanish tax office.
- The purchase price.
How to pay different property purchase costs in Barcelona
Up front with cash or transfer money directly to the Casamona account.
Reservation can be made by transferring money directly to the Casamona account, and we will pay the seller.
Transfer money directly to the Casamona account or lawyer’s account, either of which will pay the seller.
Also, there is a possibility to meet in person and pay in cash or with a bank check.
By bank transfer or by bank check from a Spanish bank account.
Cash to the bank, bank check or pay with credit card directly from a Spanish bank account or your home account.
Gas, electricity, water and community fee
Transfer or pay with credit card directly from a Spanish bank account.
Transfer or pay with credit card directly from a Spanish bank account.
Energy performance certificate
All property owners must have an energy performance certificate and the results of the energy efficiency should be added to all adverts and information of the property and to all contracts.
The certificate costs around €200 and is valid for 10 years. The property must be inspected by a qualified professional who will submit the results to the regional council. The regional council will then issue the ‘Certificado de Eficiencia Energetica’ to the owner.
The energy efficiency test will look at both the energy consumption of the property, as well as the energy emission. This will then be rated on a scale from A to G (A being the most efficient and G being the least efficient).
It is important that owners obtain this certificate, as the penalty fee of breaching this will range from €300 to €6,000.
However, non-residential, industrial or agricultural buildings, insulated buildings of less than 50m2, properties used less than 4 months a year (like a holiday home) and properties that are already rented out do need to get this certificate.
To avoid complications and to ensure that all the taxes and costs will be paid to the appropriate authorities, you can set up an account with a Spanish bank. This way you will not miss any dates or transfers and avoid fines and tax penalties. Casamona offers a service that will provide you a bank account and a NIE.
Casamona is NOT reliable for the text above. If you are in any doubt please contact a lawyer.