![Taxes when buying a home in Catalonia [Save Thousands of Euros]](https://www.buscomasia.com/objetos/temp/source/buscomasia/buscomasia-noticias_68139c540e424-source.jpg "Taxes when buying a home in Catalonia [Save Thousands of Euros]")
Purchasing a home in Catalonia can increase the final price by up to 12% due to taxes. It is common for many buyers to be surprised to discover that the total cost is considerably higher than the price initially agreed upon with the seller.
What are the applicable taxes? It all depends on the type of property. For new-build homes, a 10% VAT plus a 1.5% AJD (Stamp Duty) is applied. In contrast, for second-hand properties, the main tax is the ITP (Property Transfer Tax), which varies according to the value: 10% up to 1 million euros, 11% between 1 and 2 million, and 12% for properties exceeding 2 million. There are significant tax benefits: those under 32 years of age and large families can reduce the ITP to 5% if they meet certain requirements.
Apart from taxes, additional expenses must be considered, such as notary fees (€600-€1,200), registry fees (€300-€600), appraisal fees (€200-€600), and, if you need a mortgage, bank commissions that can reach up to 2% of the loan. In this article, we will examine all these costs in depth to help you plan your investment and potentially save thousands of euros.
When buying a new-build home in Catalonia, you will need to consider several specific taxes that will significantly impact your final budget. It is essential to be aware of these levies, which differ from those applied to used homes, to avoid unpleasant financial surprises during the process.
Value Added Tax (VAT) is the main tax on the acquisition of a new-build home. This levy represents 10% of the total price, including attached elements such as parking spaces or storage rooms when acquired in the same transaction. Unlike the ITP, which is applied to used homes, VAT maintains a constant percentage regardless of the property's value.
It is essential to know that the developer or builder directly charges this tax and subsequently transfers it to the Tax Agency, appearing as a separate item on your purchase invoice.
Along with VAT, you will have to pay the Stamp Duty (AJD), which in Catalonia amounts to 1.5% of the registered value. This tax is applied to the formalization of the public deed of sale. Catalonia maintains one of the highest rates in Spain, exceeding other regions where it can be 0.5% or 1%.
Notary fees vary between €600 and €1,200, depending on the value of the property and the complexity of the deed. Registration in the property registry usually costs between €300 and €600. If you decide to hire management services to process the documentation, you should consider approximately an additional €300.
If you require mortgage financing, the bank will require an official appraisal. This procedure has a variable cost between €200 and €600, depending on the characteristics and location of the property. The appraisal establishes the official value of the property for banking purposes and determines the maximum percentage of financing, which generally reaches up to 80% of the appraised value.
Undoubtedly, the taxes associated with buying a home in Catalonia represent a considerable investment that must be carefully planned. Adequate forecasting of these costs will allow you to approach the acquisition with greater financial peace of mind.
The acquisition of a used home in Catalonia entails a specific taxation that differs from that applied to new properties. When buying a property that has had previous owners, the main tax will be the Property Transfer Tax (ITP), which replaces VAT.
The ITP is an autonomous tax that levies transactions of second-hand properties. In Catalonia, this tax is characterized by a tiered structure that varies according to the price of the property. Unlike other regions that apply a single percentage, Catalonia implements different tax rates based on the value of the property, which can significantly impact the final outlay.
The current structure of the ITP in Catalonia is organized into the following levels:
10% for properties valued up to €1,000,000
11% for the segment between €1,000,000 and €2,000,000
12% for properties exceeding €2,000,000
This progressive scale places Catalonia among the regions with the highest tax burden on the sale of used homes. However, there are significant tax benefits for certain groups that can substantially reduce this burden.
In addition to the ITP, other mandatory expenses must be considered. Notary fees for the deed usually range between €600 and €1,200. Registry inscription costs approximately between €300 and €600. If you opt for management services for the document processing, you will need to add an additional €300 to the budget.
The main difference when acquiring a new or used home lies in taxation: new-build properties are subject to VAT (10%) plus AJD (1.5%), while second-hand properties only pay ITP but with higher rates (10-12%). When buying a used home, you do not have the developer's guarantees, although notary and registry costs are practically the same in both cases. It is essential to verify that the used home is free of charges and debts that could affect the buyer.
Catalonia offers various tax bonuses that can significantly reduce the tax impact on the purchase of a home. These deductions, aimed at specific groups, represent a considerable savings opportunity for your real estate investment.
Young people under 32 years of age can benefit from a significant reduction in the Property Transfer Tax. This group can see the tax rate reduced from 10% to 5% when acquiring a second-hand home, provided they meet these requirements:
The property must be intended as their primary residence.
They must have annual income below €30,000.
The property value must not exceed €300,000.
This tax advantage represents substantial savings, especially for first-time buyers.
Large families also enjoy tax advantages when buying a home in Catalonia. Similar to young people, they can access an ITP reduction to 5% if the home will be their habitual residence. In addition, they can apply additional deductions in the Personal Income Tax (IRPF) for investment in a habitual residence, a benefit that is maintained exclusively for this group.
Furthermore, people with a disability equal to or greater than 33% can benefit from an ITP reduction of up to 5%. This tax advantage applies regardless of the buyer's age, as long as the property is intended as their habitual residence and its value does not exceed the established limits. This group can also request specific aid to adapt the home to their particular needs.
Finally, the purchase of Officially Protected Housing (VPO) entails significant tax benefits. These properties enjoy reduced taxation, with a super-reduced VAT of 4% applied to new-builds (in contrast to the general 10%) and significant ITP reductions for second-hand homes. Additionally, VPO properties are usually exempt from paying Property Tax (IBI) for the first few years, which represents considerable savings for buyers.
Knowing these deductions and bonuses is essential to fiscally optimize the acquisition of your home in Catalonia, potentially saving up to 5% of the total property price.
In addition to the initial taxes, buying a home in Catalonia involves recurring expenses and legal considerations that you should evaluate before signing the deed. These additional costs significantly impact your long-term finances.
The Property Tax (IBI) is a mandatory annual tax that varies between 0.4% and 1.1% of the cadastral value, depending on the municipality. You will also have to pay municipal taxes such as waste collection (€100-€200 annually) and sewerage.
While not legally mandatory, home insurance is practically indispensable. If you finance the purchase with a mortgage, the bank will require at least fire insurance, with an approximate annual cost of €150-€400 depending on the property's characteristics.
If you acquire a home in a community of owners, you will have to pay a monthly fee ranging between €30 and €150 to cover the maintenance of common areas, elevator service, concierge, and other general expenses. It is also important to consider possible extraordinary assessments for structural reforms or building improvements, which may require considerable one-off payments.
It is essential to request a simple note from the Property Registry (costing between €9-€12) before making the purchase to check if there are outstanding mortgages, liens, or easements on the property. Although your notary will carry out this verification, reviewing it personally will help you avoid unpleasant surprises that could affect your property and generate unforeseen expenses.
As of January 2022, the cadastral reference value has replaced the real value as the taxable base for housing sales taxes in Catalonia. This modification has a direct impact on the calculation of ITP and AJD, as they are now calculated according to this reference value, regardless of the actual sale price. This new regulation may result in an increase in the tax burden if the cadastral value exceeds the agreed price, so it is advisable to verify it through a cadastral certificate before formalizing the transaction.
Acquiring a home in Catalonia represents a considerable investment where the tax burden can reach up to an additional 12% on the initial price. The choice between a new property (10% VAT + 1.5% AJD) or a second-hand one (10-12% ITP) will have a significant impact on your final budget.
The available tax benefits offer significant savings opportunities. Young people under 32, large families, and people with disabilities can reduce the ITP to 5% by meeting certain requirements, which represents considerable savings.
Comprehensive financial planning is crucial before signing any document to avoid unexpected setbacks. At Buscomasia, we offer comprehensive advice for the purchase of your rural house or farmhouse in Catalonia, guaranteeing the best conditions. Understanding all the tax aspects and taking advantage of the available deductions can make the difference between a successful investment and an excessive financial burden for your future.
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