Other Taxes Guide
Value Added Tax
This tax affects everyone. It is a 16% Goods and Services Tax similar to the VAT (in Spanish it is abbreviated to IVA). Every consumer in Spain must pay it. In almost every case it will be included in the price tag and on the odd occasion that it is not (buying a house is one example), this will be clearly stated.
Not quite what it sounds like. It´s an end-of-year tax levied on your assets and property on the 31st December of every year. It´s unavoidable, but not crippling as the first €108,182 of your property´s value is tax-free. After this the rates range from 0.02% to more than 2% for homes valued at over ten million euro.
Inheritance and Gift Tax
The Spanish law provides the inheritance and the gift tax together, to prevent elderly parents gifting their homes and other assets to their children while they are still alive to avoid the occasionally hefty inheritance tax. There are all kinds of variables with this tax, including the region you live in, the number of your dependents, whether funerals are paid for out of the estate or your pocket, numbers and closeness of remaining living relatives and so on. A tax advisor is recommended if you have to deal with this specific aspect of Spanish tax.
Property Transfer and Stamp Duty Tax
Property transfers, corporate transactions and stamp duties live in this category. Stamp duty is about 1% to 2% of the purchase price of the home. If the authorities believe the seller and new owner have undervalued the house on paper to avoid stamp duty, you will also have to come up with a couple of thousand euro to pay the fines as well. Property transfer tax runs between 6% and 7% of the house value.
Capital Gains Tax on land
The Capital Gains Tax is the Spanish municipal tax on the increase in the value of the urban land since the last recorded transfer, (but not in the building, just the land). If you buy a property, it is customary in Spain for you to pay the Capital Gains Tax on the land.