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Costs in Connection with Purchase of Property in Spain

We feel it is very important that you consider all the costs when buying a property in Spain:

• I.V.A. = VAT: 7% of declared price. Applicable on new properties.
  
• I.T.P. = Property Transmission Tax: 6% of declared price. Applicable on resales.
  
• A.J.D. = Stamp Duty: 0.5% of declared price. Applicable on new properties.
  
• Notary costs: Approx. 0.6% to 1% of declared price.
  
• Registration charges: Approx. 0.3% to 0,7% of declared price.
  
• Electricity connection charge: Approx. 26,000 ESP (approx. £97). Applicable on new properties.
  
• Water connection charge: Approx. 26,000 ESP (approx. £97). Applicable on new properties.
  
• Plusvalía = Tax on Rise in Value of Land: Approx. 0.2% to 2% of declared price.

Due to these costs, the list price of the dwelling needs to be incremented by 8% to 10%. Resales are subject to a 5% tax deduction which must be paid to the Tax Office in the name of the seller. Part of this amount (in the best of cases, all of it) is restituted in a matter of a couple of months.

Annual Running Costs

• Cuota de comunidad = Community Quota (covering the maintenance of common areas and costs such as gardens, swimming-pool, street lighting, vigilance, etc.): Typically from 25,000 to 60,000 ESP (approx. from £95 to £220).
  
• Income Tax (during the second half-year):
  1) Divide declared price by 2.
  2) On the result, calculate:
      1.1%, if your property is situated in Orihuela, or
      2%, if your property is situated in Torrevieja.
  3) Your income tax is 25% of the result of step 2.
  
• Capital Tax (during the second half-year):
  - 0.2% of declared price if this is ESP 18 million or lower.
  - 0.3% of declared price if this is higher than ESP 18 million.
  
• I.B.I. = Local Real-Estate Tax: Approx. 0.4% to 0.8% of your property's taxable value ("valor catastral").
  
• Water and rubbish collection: From approx. 10,000 ESP (approx. £37).
  
• Electricity: From approx. 10,000 ESP (approx. £37).
  
• Insurances: From approx. 18,000 ESP (approx. £67).