Taxes on luxury property in Spain: what you need to know before buying

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The acquisition of real estate abroad is always a complex and exciting process, especially when it is the issue of luxurious properties in countries where tax laws may be very different from usual norms.

One such state is Spain, where fees for luxury apartments and homes can be a big expense for new owners. In this article, we would like to describe the taxes you will have to pay when buying expensive villas and what you need to know to avoid unpleasant surprises.

Luxury property tax

In Spain, commission when buying residential or commercial facilities may vary depending on the area in which the property is located. This principle is pretty simple. The more prestigious the region, the higher the financial obligations you have to fulfill.

However, if we are talking about expensive houses and apartments, in most cases, the buyer will have to pay an additional fee. It is called «luxury property tax» (Impuesto sobre Bienes Inmuebles de Características Especiales).

This fee is charged only for those facilities whose price exceeds a certain threshold. In Spain, this bar may vary depending on the region, but usually, it is around 700,000 euros. In this case, the tax is charged only on that part of the cost that exceeds the current minimum. This is important to consider if a person is interested in luxury golf apartments for sale at Alcaidesa.

luxury golf apartments for sale Alcaidesa

The interest rate on luxury Spanish real estate may vary from region to region and is calculated on the base of the interest rate. It ranges from 1.3% to 2.5%. The average rate varies from 1.5% to 1.7%.

Avoiding overpayment

If you want to avoid wasting money in the process of acquiring luxury apartments in Spain, you should get acquainted with the tax legislation of this country in advance. Also, you can contact professional lawyers or accountants who will help you reduce your financial burden and save money. They will do it qualitatively and professionally.

In addition to the tax on luxury real estate, this purchase is related to other commissions, too. For example, the buyer is obliged to pay an Impuesto sobre Transmisiones Patrimoniales, which can be up to 10% of the purchase price. Also, you will probably have to pay value-added tax (Impuesto sobre el Valor Añadido). This is an important factor if the seller is a taxpayer VAT.

Key principles

In addition, the purchase of real estate in Spain is associated with a number of regulatory requirements that you should comply with. For example, owners are required to perform repairs if necessary and pay annual taxes. Moreover, citizens of particular states should have a residence permit or stay permit. This will help them in the issue of buying apartments.

Also, you should take into account that the tax laws of Spain may change over time. So we advise you to get advice from experts and analyze all possible fees and obligations before buying. All this will help you to represent the final value of your future property in detail. Despite the existence of commissions, the purchase of elite real estate can be a profitable investment.

Spain is one of the most famous places to buy luxury mansions in Europe, thanks to its beautiful beaches, beautiful climate, rich history, and cultural heritage. In addition, the relatively low prices for luxury mansions make the Spanish state an optimal and profitable place for investors.