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Kasare, Solicitor
Category: Law
Satisfied Customers: 1301
Experience:  Solicitor, 10 yrs plus experience in civil litigation, employment and family law
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I'm buying a property in Malaga Spain ,000 euros

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Hello I'm buying a property in Malaga Spain for 80,000 euros not for rental, can you tell me what taxes i must pay to the spanish government as a none resident.
Hi thank you for your question. Although I am an English lawyer not a Spanish lawyer, I do deal with matter having experience in Spanish legal matters.
Can you please advise if you are referring to the taxes when you purchase or the taxes to be paid annually?
Customer: replied 2 years ago.

Taxes to be paid annually for being a non resident it may be called a wealth tax so basically this will be a holiday home only.

If you could also tell me the purchase tax on 80000 euros this will also

be invaluable.


Hi Haig
Apologies for not replying sooner. I did wait for you to respond, but unfortunately was off this weekend. Do you still require this information?
Customer: replied 2 years ago.


Thanks - Can you confirm for me, is the Valor Cadastral of the property €80,000 the same as the purchase price? Or do you not know?
I will provide the answers you require now, as I am due to go to court this morning.
In Spain, the buyer must pay sales tax on the property. This is known as Impuesto de Transmisiones Patrimoniales (ITP). It is paid as a percentage of the value of the house, which is currently set in Malaga at 8% for properties valued at up to €400,000. So on €80,000 you would be looking at €6,400.
You are responsible for the payment of ITP and the payment is due on completion and before registering the purchase deeds at the land registry.
The problem is, and the reason I asked if the property purchase price was the same as the valor cadestral (which is the assigned fiscal value), is that due to the property crash in Spain, the Spanish tax authorities are now looking closely at property purchase prices, and if they value the property higher than what you have paid for it, you will have to pay tax on their valuation. This can be sought from the Spanish tax office up to 6 years after the purchase of a property!
I find this process very distasteful, as if for example a property has been on the market for several years at a price and not sold, then the seller accepts a reduced figure, how can the Spanish government then declare you owe taxes on a value that you would have never paid for a property? The problem is, that you simply have to.
The other issue is, if you don't pay it and appeal, they will charge you interest whilst they review the decision, which is still likely to come out in their favour. If you do pay it and then appeal, as I said, the likely result in any event is that they are correct and they will not pay anything back to you!
In addition, you will have various legal, land registry, gestor and notary fees, but your abogado should confirm these to you in advance.
Following the purchase you will have the following type of taxes to consider:
1. The Wealth Tax in Spain was supposed be be re-established only for the financial year 2011 as a temporary measure but due to the crisis it has been in place up to and including 2014. However, this is subject to a minimum exemption of €700.000. As your property price is well below this you will not have to pay this.
2. IBIU (Impuesto Bienes Inmuebles Urbana) - all properties in Spain must pay annual rates (IBI) - this is like the UK council tax. It is paid by the person who occupies the property on the 1st January in any year. This tax is collected by the local Town Hall and is based on the rateable value (valor catastral) of the property.
3. Refuse tax (Basura) - Some local councils charge separately for rubbish collection charges in addition to IBI. These are normally levied by the local Town Hall.
4. Imputed income tax (Impuesto sobre la Renta de no Residentes) - this is the property owners' imputed income tax is based on a deemed rental income. This must be paid irrespective of whether you rent the property out or not. The Spanish government has set this tax for all non-residents. The tax is calculated based on the rateable value (valor catastral) of the property. The rental income is deemed to be 2% (or 1.1% if the valor catastral has been revised since 1994) of the rateable value and then you are taxed on that amount at a rate of 24.75%.
I hope this assists you.
If you have any questions, please ask. Thanks
Hi Haig, did you get my answer? Was there anything else I could help you with?
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