I want to buy a house or another property: What do I have to pay?
Table of Contents (13)
- What taxes and expenses are paid in a sale?
- The price.
- How can I find out the reference value of the property I want to acquire?
- In addition to the purchase price, what taxes are applied in the sale of a house or other property?
- a) Taxes that the buyer must pay.
- First transmission. VAT taxation
- Second transmission or subsequent. Taxation by ITP
- b) Taxes that the seller must pay.
- Municipal capital gains tax on urban properties.
- IRPF and IS.
- Non-resident tax.
- FAQs about Taxes on Home Purchase
- JLA Notaries, Real Estate Notary in Barcelona
One of the most important elements of any sale and, in general, of any legal transaction, is the real cost of the operation. To know how much you have to pay when buying a house or other property, we must not only consider the price, which is relevant, but also the taxation. The payment of taxes is a matter that frequently arises in notarial offices. Therefore, we find it necessary to write a few lines about the payments that must be made when acquiring a property.
What taxes and expenses are paid in a sale?
One of the most important elements of any sale and, in general, of any legal transaction, is the real cost of the operation. To know how much you have to pay when buying a house or other property, we must not only consider the price, which is relevant, but also the taxation. The payment of taxes is an issue that constantly arises in notarial offices. Therefore, we find it necessary to write a few lines about the payments that must be made when acquiring a property.
The price.
The first amount to be paid in a sale is logically the purchase price. There is no doubt about that. However, the price set in the contract may raise a series of tax issues, as it serves as the taxable base for subsequent taxation.
In principle, for the taxation generated by the sale, the sale price will be taken as the base. Nevertheless, the tax authorities take into account the minimum valuation they consider a property has, called the reference value. Regarding the price and taxation, three scenarios may occur:
- That the sale price is higher than the reference value, in which case the former will be taken as the base.
- That the sale price is lower than the reference value, in this case, and following the reform introduced by Law 11/2021, which came into effect on this matter on 1 January 2022, the process has changed, as can be read in a previously published post:
After the reform, there is the possibility of challenging the reference value, either by requesting the correction of the self-assessment, when the taxpayer submits a self-assessment applying the reference value and requests its correction for not being in accordance with reality, or by appealing the assessment issued by the Tax Administration, either due to lack of self-assessment or for having declared a value lower than the official one. These appeals shall be filed with the Tax Administration that applies the reference value, which must request a report and forward the documentation provided to the Cadastre Management. This will issue a binding report for the Tax Administration, which will decide based on it whether or not the correction of the value is appropriate.
But first, payment should be made based on the reference value, the value and, consequently, the taxation should be challenged, and finally the refund requested.
How can I find out the reference value of the property I want to acquire?
It can be obtained through the cadastre website, by issuing the corresponding certificate. This certificate can be easily obtained by the notary, but also by the interested party with their credentials or by the real estate agency.
There is a possibility that the property currently lacks a reference value, in which case the taxable base for the tax on property transfers and documented legal acts (ITPAJD) is the highest of the following amounts: declared value, agreed price or consideration, or market value.
In addition to the purchase price, what taxes are applied in the sale of a house or other property?
The sale generates a series of taxes that must be paid by the parties. These taxes can be viewed from the perspective of who has to pay the tax, buyer or seller.
a) Taxes that the buyer must pay.
The buyer must pay the tax that directly affects the sale, whether it is VAT or TPO. The difference between the two lies in whether it is a first transfer or a second or subsequent one. Let us examine both.
First transmission. VAT taxation
The first transfer of a property, whether a dwelling, parking space or commercial premises, is subject to VAT. The first transfer is understood as the one carried out by the builder or developer directly to the buyer, once the construction or rehabilitation is completed. In these cases, it is always subject to VAT but with a different rate, according to the following cases:
- Taxation at 21%: This is the general rate. Any sale of a property, except for the following exceptions, will be subject to 21% VAT. For example, for the sale of a commercial premises for a price of €100,000, 21% must be added, or in other words, €21,000. Therefore, the buyer must pay the total amount of €121,000.
- Taxation at 10%: Contrary to the general rule, there is the exception of sales of dwellings and their annexes or other properties linked to the dwelling, such as parking spaces. According to the Dirección General de Tributos, a dwelling is understood as "a building or part of it intended for the habitation or residence of a natural person or family, constituting their home or the seat of their domestic life". But this reduction not only affects the dwelling, but also the elements linked to it and sold jointly, such as storage rooms or parking spaces, with the limit of two of them (art.91.1.7 LIVA). The term dwelling, in this case, does not differentiate between main residence or second home, but the general use of the property.
Following the previous example, if instead of selling a commercial premises it was a dwelling, the VAT amount would be €10,000, and the total payment €110,000. - Taxation at 4%: When, in addition to dwellings, these have the qualification of official protection, the taxation is reduced to 4%. Thus, article 91.2.6 of the VAT Law states that they are taxed at the super-reduced rate "Dwellings administratively qualified as officially protected under special regime or public promotion, when deliveries are made by their promoters, including garages and annexes located in the same building that are transferred jointly. For these purposes, the number of parking spaces may not exceed two units."
However, despite what is stated in the previous paragraphs, there are first transfers that are subject to Transfer Tax (TPO) and not VAT. For example, first transfers made by individuals when the dwelling is built with the initial intention of using it for their own use, but the decision is eventually made to sell it, since, as the Dirección General de Tributos states, they should not be considered as entrepreneurs or professionals for VAT purposes as there is no intention to engage in the production or distribution of goods and services, and must be taxed under Transfer Tax.
Likewise, transfers made by the developer after uninterrupted use of the property for a period equal to or greater than two years by its owner are subject to Transfer Tax, since for VAT purposes it will not be considered a first delivery, according to article 20.22-2 of the VAT Law.
Finally, it should be noted that the VAT amount, as well as the sale price, are paid to the seller, who will settle it quarterly through form 303. The seller must withhold the VAT and pay it to the Tax Administration when due, acting as a tax collector.
Second transmission or subsequent. Taxation by ITP
When it comes to the sale of second-hand properties, the applicable tax is the Transfer Tax on Onerous Property Transfers (TPO). The general tax rate, that is, the percentage the buyer must pay, ranges between 6% and 13%, depending on the Autonomous Community where the property is located. As a summary, the general rates would be as follows (updated to April 2025):
Andalusia: regulated in the Law 5/2021, of 20 October.
Acquisition of real estate: 7%
Acquisition of movable property: the general rate is 4%, although certain vehicles with environmental category «0 emissions» are taxed at 1%. There are other movable goods taxed at 8%, such as vehicles or boats with certain characteristics.
Aragon: regulated in the Legislative Decree 1/2005, of 26 September.
Acquisition of real estate:
- Between €0 and €400,000 taxed at 8%
- Between €400,000 and €450,000 taxed at 8.5%
- Between €450,000 and €500,000 taxed at 9%
- Between €500,000 and €750,000 taxed at 9.5%
- More than €750,000 taxed at 10%
Acquisition of movable property: 4%
Asturias: regulated in the Legislative Decree 2/2014, of 22 October.
Acquisition of real estate:
- Between €0 and €300,000 taxed at 8%
- Between €300,000.01 and €500,000 taxed at 9%
- More than €500,000 taxed at 10%
Acquisition of movable property: 4% is the general rate, although certain goods may reach 8%, according to article 32 of Legislative Decree 2/2014, of 22 October.
Balearic Islands: regulated in the Legislative Decree 1/2014, of 6 June.
Acquisition of real estate:
- Between €0 and €400,000 taxed at 8%
- Between €400,000.01 and €600,000 taxed at 9%
- Between €600,000.01 and €1,000,000 taxed at 10%
- Between €1,000,000.01 and €2,000,000 taxed at 12%
- More than €2,000,000.01 taxed at 13%
Acquisition of movable property: 4%
Canary Islands: Legislative Decree 1/2009, of 21 April
Acquisition of real estate: 6.5%
Acquisition of movable property: 5.5%
Cantabria: regulated in the Legislative Decree 62/2008, of 19 June.
Acquisition of real estate: 9%
Acquisition of movable property: 6%
Castilla-La Mancha: regulated in the Law 8/2013, of 21 November.
Acquisition of real estate: 9%
Acquisition of movable property: 6%
Castile and León: regulated in the Legislative Decree 1/2013, of 12 September.
Acquisition of real estate:
- Between €0 and €250,000 taxed at 8%
- On the excess over €250,000 taxed at 10%
Acquisition of movable property: 5%, although certain vehicle acquisitions are taxed at 8%.
Catalonia: regulated in the Legislative Decree 1/2024, of 12 March, approving the sixth book of the Catalonia Tax Code.
Acquisition of real estate:
- Between €0 and €600,000 taxed at 10%.
- Between €600,001 and €900,000 taxed at 11%.
- Between €900,001 and €1,500,000 taxed at 12%
- Amounts exceeding €1,500,000 taxed at 13%
- Large holder acquirer: taxed at 20%.
Acquisition of movable property: 5%
Extremadura: regulated in Legislative Decree 1/2018, of 10 April BOE-A-1999-2521 and BOE-A-2018-8159
Acquisition of real estate:
- Between €0 and €360,000 taxed at 8%
- Between €360,000.01 and €600,000 taxed at 10%
- More than €600,000 taxed at 11%
Acquisition of movable property: 6%
Galicia: regulated in the Legislative Decree 1/2011, of 28 July.
Acquisition of real estate: 8%
Acquisition of movable property: 8%
Madrid: regulated in the Legislative Decree 1/2010, of 21 October.
Acquisition of real estate: 6%
Acquisition of movable property: 4%
Murcia: regulated in the Legislative Decree 1/2010, of 5 November.
Acquisition of real estate: 8%
Navarra: regulated in the Foral Legislative Decree 129/1999, of 26 April.
Acquisition of real estate: 6%
Acquisition of movable property: 4%
La Rioja: regulated in the Law 10/2017, of 27 October.
Acquisition of real estate: 7%
Acquisition of movable property: 4%
Valencia: regulated in the Law 13/1997, of 23 December.
Acquisition of real estate:
- Between €0 and €1,000,000 taxed at 10%
- More than €1,000,000 taxed at 11%
Acquisition of movable property: 6%
Basque Country: regulated in Foral Norm of Biscay 1/2011, of 24 March ; in the Foral Norm of Guipúzcoa 18/1987, of 30 December ; and in the Foral Norm of Álava 11/2003, of 31 March.
Acquisition of real estate: 7%
- Transfer of housing: 4%
- Transfer of main residence: 2.5% when legal requirements are met.
Acquisition of movable property: 4%
This tax must be settled and paid by the buyer through form 600 within the deadline set by the respective Autonomous Community. This deadline may be 30 days or one month.
If the 30-day deadline is indicated, it refers to working days counted from the day after the purchase deed was signed, excluding Saturdays, Sundays, and public holidays. If, on the other hand, the deadline is one month, it is counted from date to date starting from the day after the signing.
Likewise, depending on the Autonomous Communities, a series of reductions in the tax rate and exemptions are applied, which can be read in the regulatory provisions of each Autonomous Community mentioned above. Focusing on the study of this tax in Catalonia, the taxation would be as follows (updated to December 2022):
Acquisition of movable property: In Catalonia it is taxed at 5%
Acquisition of ownership and real rights over second-hand properties (houses, premises, parking spaces, etc.) is taxed according to the following table:
| PURCHASE AMOUNT | RATE |
|---|---|
| Up to €600,000.00 | 10% |
| From €600,001.00 up to €900,000.00 | 11% |
| From €900,001.00 up to €1,500,000.00 | 12% |
| More than €1,500,000.00 | 13% |
| Large holder buyer | 20% |
Acquisition of official protection housing: If the acquired property is classified as VPO, the tax is reduced to 7%.
Acquisition of main residence by young people: If a young person acquires what will be their main residence, the taxable rate is reduced to 5%. To do so, several requirements must be met:
- The purchaser must be 35 years old or younger.
- Their total taxable base, minus the personal and family minimum in their latest income tax return, cannot exceed €36,000;
- The purchaser must allocate the property as their main residence. In this case, it is advisable that the interested party registers their residence at that address to prove it constitutes their main residence.
- The concept of main residence includes the dwelling itself, a storage room, and up to two parking spaces, in accordance with the article 41bis of Royal Decree 439/2007, of 30 March.
Acquisition of main residence by large families: In this case, the acquisition is taxed at 5%, with the following requirements:
- That it is a large family. This is understood as one consisting of one or two ascendants with three or more children, whether or not they are common, according to the article 2 of Law 40/2003, of 18 November, on Protection of Large Families.
- That the acquisition is intended as the main residence, similarly to what is specified in the previous point.
- That in the latest income tax return the sum of the total taxable bases of the family unit, minus the personal and family minimum in their latest income tax return, cannot exceed €36,000, an amount that can be increased by €14,000 for each child exceeding the minimum established by law.
Acquisition of property to be used as the main residence of a person with physical, mental or sensory disability: Likewise, these cases are taxed at 5%. The requirements in this case are:
- The degree of disability must be equal to or greater than 65%. The disability may affect the taxpayer/purchaser or any member of their family unit.
- That in the latest income tax return the sum of the total taxable bases of the family unit, minus the personal and family minimum in their latest income tax return, cannot exceed €36,000.
- The disability and degree must be certified by an ICASS certificate.
- That it is intended to be the family’s main residence.
Acquisition of main residence by single-parent families: Taxed at 5%. A single-parent family is understood as one whose minors depend economically on a single person, according to the article 2 of Law 18/2003, of 4 July, on Support for Families. Additionally, the following requirements must be met:
- That in the latest income tax return the sum of the total taxable bases of the family unit, minus the personal and family minimum in their latest income tax return, cannot exceed €36,000, an amount that can be increased by €14,000 for each child exceeding the number of children that current legislation requires as a minimum for a family to have the legal status of a special category single-parent family.
- That the taxpayer is part of that single-parent family.
- That it is intended to be the family’s main residence.
Acquisition of property to be used as the main residence of a victim of gender-based violence: Likewise, these cases are taxed at 5%. The requirements in this case are:
Income limit: that the sum of the general and savings taxable bases, minus the personal and family minimum in the latest income tax return, does not exceed €36,000;
Status as a victim of gender-based violence: This is certified by any of the means established in Law 5/2008, of 24 April, on the right of women to eradicate gender-based violence.
Change of residence: The acquisition of the property must be a consequence of the need to change the residence of the victim of gender-based violence.
Main residence: Both the dwelling and a storage room and up to two parking spaces acquired simultaneously in a single transaction or located in the same building or urban complex are considered main residence. In both cases, they must be at the disposal of the transferor at the time of acquisition, without having been transferred to third parties.
Property: Includes the land intended for the subsequent construction of the main residence.
Main residence: To be considered main residence, it must have been effectively and permanently inhabited for 12 months from the date of acquisition or completion of the works. The works must be completed within a maximum period of three years from acquisition.
Period of continuous residence: The property is considered main residence if the taxpayer resides in it for a continuous period of three years. It is also considered main residence if, although this period has not elapsed, there are circumstances requiring a change of residence, such as marriage, separation, formation of a stable couple, job transfer, obtaining first employment, among others.
Three-year period: If the property has been effectively inhabited during the first 12 months, the three-year period is counted from the date of acquisition or completion of the works.
100% discount for Non-Profit Housing Cooperatives
A 100% discount is established on the tax on onerous property transfers for housing cooperatives that meet the requirements established by the Cooperatives Law to be considered non-profit entities. This discount aims to encourage the participation of non-profit housing cooperatives, favouring more equitable access to housing.
50% discount on the Transfer of Office Buildings or Unfinished Structures for their Transformation into Official Protection Housing
A 50% discount is established on the tax on onerous property transfers for the transfer of office buildings intended for their transformation into official protection housing. This same discount also applies to unfinished structures of buildings intended to be transformed into official protection housing. To recognise this discount, it is sufficient that the contract indicates the intention to build official protection housing. However, if the provisional qualification is not obtained within three years, the discount will be void. In case of non-compliance, the taxpayer must submit a supplementary self-assessment to regularise the situation, deducting the amount already paid and applying the corresponding late payment interest.
50% discount for the Transfer of Properties that Constitute the Registered Office or Workplace of Companies or Professional Businesses
A 50% discount is applied on the tax on onerous property transfers for the transfer of properties intended to constitute the registered office or workplace of companies or professional businesses. To benefit from this discount, the following requirements must be met:
- The company or professional business must have its tax and registered office in Catalonia or this must be established with the acquisition of the property.
- The property must be used for the development of an economic activity other than the management of movable or immovable assets, within a maximum period of six months from acquisition.
- The company or professional business must remain operational for at least five years from the date of the public deed documenting the acquisition of the property.
- There must be an increase in the workforce of the company or business in the year of acquisition of the property compared to the previous year, and this increase must be maintained for at least three years.
b) Taxes that the seller must pay.
The seller, once the sale is made, must pay two taxes at two different times.
Municipal capital gains tax on urban properties.
The tax on the increase in the value of urban real estate, recently amended and known as municipal capital gains tax, is paid to the town hall for the increase in value that the property has had thanks to the renovation and maintenance work carried out by the municipal entity itself. This increase is limited to the period during which the seller has owned the property, that is, the period between its purchase and the sale now being made, with a maximum limit of 20 years.
Once the deed is signed, the seller will receive a simple copy, with which they can settle the tax at the town hall within 30 working days, without prejudice to the fact that this procedure may be managed by the notary or a management office chosen by the interested party.
IRPF and IS.
The sale of a property made by an individual is taxed in the IRPF as a capital gain. This gain, in the sale, is calculated by the difference between the acquisition price and the sale price (art. 35 LIRPF).
If it is the sale of the seller's main residence, the aforementioned capital gain will be exempt provided that the entire amount is reinvested in the acquisition of a new main residence within a maximum period of two years. If only part of the amount is reinvested, the exemption will apply only to the reinvested amount, with the remainder being taxed in the ordinary manner (art. 38.1 LIRPF and 41 of the Regulation).
The sale of the main residence by a person over 65 years of age is also exempt, whether the main residence is transferred in exchange for a capital sum or in exchange for an annuity, temporary or lifelong (art. 33.4.b LIRPF).
In the case of a legal entity, the amount obtained will be accounted for and, where applicable, will be subject to the corresponding corporate tax.
Non-resident tax.
If the seller, Spanish or not, resides outside the national territory, they are obliged to pay the IRPNR. In this case, the buyer of the property, whether resident or not, is obliged to withhold and pay to the Public Treasury 3% of the sale price (art.25.2 LIRNR and 14 of the regulation). That is, the one who must pay is the seller, but the one obliged to make the payment is the buyer. This is done by deducting 3% from the sale price, which the buyer withholds to pay it, through form 211.
If the withholding is not paid, the property will be subject to the payment of the lesser amount between the withholding or relevant advance payment, and the corresponding tax.
Regarding residence, it is necessary to point out that Spanish individuals or legal entities are presumed to reside within Spanish territory. However, foreigners, whether individuals or not, must prove that they reside in Spanish territory to avoid withholding of this tax. This residence is accredited by the certificate from the tax agency, which can be requested electronically at www.agenciatributaria.gob.es. Without the certificate, it is presumed that the foreigner does not reside in Spanish territory, in which case the corresponding withholding must be made.
FAQs about Taxes on Home Purchase
Taxes on home purchases depend on whether the house is new build or second hand. If it is new build, VAT and AJD must be paid, whereas if it is second hand, the tax on home purchase that must be paid is the ITP (Transfer Tax).
If the property is new (purchased from a developer), a 10% VAT must be paid on the purchase price and a Stamp Duty that can range between 0.5% and 1.5%, depending on the autonomous community. In Catalonia, in particular, the Stamp Duty is 1.5%.
In new build official protection housing, the VAT to be paid on the purchase price corresponds to 4%.
If the property is second-hand (purchased from a private individual), VAT is not paid; instead, the tax payable on the purchase of the property is the Transfer Tax (Impuesto de Transmisiones Patrimoniales Onerosas, TPO). Its rate will depend on the autonomous community and usually ranges between 6% and 13% of the registered price. In Catalonia, the general ITP rate is 10%, although it increases in the case of high-value properties.
It is possible to pay 21% VAT in certain cases related to real estate, but not when it is a dwelling intended to be inhabited. The cases in which VAT is 21% are commercial premises, offices and industrial warehouses for businesses, garages and storage rooms purchased separately, rural or non-developable land, buildings purchased by companies for office or coworking uses, or dwellings sold between companies without having been used.
In this case, it depends on the moment you carry out the purchase and sale of a garage or storage room, since if you acquire it with the property, (maximum two parking spaces), it is taxed at 10%. If it is separately, at 21%.
Depending on the autonomous community and whether the house is the main residence, there are tax deductions that can represent significant savings.
Some people try to reduce taxes by declaring a price lower than the real one, but this can have legal and tax consequences in the future. Furthermore, as of today there is a reference value, which is the minimum value at which the transfer of a property must be declared, and many limitations on cash payments.
The deposit contract protects the buyer and the seller before the public deed, but there are different types (confirmatory, penitential, penal) and each involves different risks.
You can read more here: Understanding the deposit contract: a preliminary agreement
Since 2022, this value affects the calculation of the Property Transfer Tax (ITP) and the Stamp Duty (AJD), which can increase the cost of the purchase.
You can read more here: The catastrazo: the new reference value of the cadastre
For this, we recommend reading this article where we explain it to you in detail: I want to buy a house or another property: What are the necessary documents?
JLA Notaries, Real Estate Notary in Barcelona
I hope that the article, although dense and a little arduous, can be helpful to anyone wishing to buy a property and feeling a bit lost. That it can serve to clarify something as important as taxation and, ultimately, the expense one makes of their savings. It is a brief general explanation, but your case may have some speciality or you may have some questions. In this case, do not hesitate to contact JLA Notarios, as we are at your full disposal from our Notary Office in Barcelona.
As a property notary specialised in deeds of sale in Barcelona, rest assured that we will be able to help you.
