What Taxes Are Paid When Buying a Property on the Costa Brava?
What Taxes Are Paid When Buying a Property on the Costa Brava?
Buying a property on the Costa Brava is one of the most important financial decisions for many families and investors. Beyond the purchase price, it is essential to understand the taxes and associated costs involved in the transaction.
Taxes on Second-Hand Properties
Most property transactions on the Costa Brava involve resale properties. In these cases, buyers must pay the Property Transfer Tax (ITP).
In Catalonia, the ITP is applied progressively according to the property's value:
- Up to €600,000: 10%
- From €600,001 to €900,000: 11%
- From €900,001 to €1,500,000: 12%
- Over €1,500,000: 13%
For example, a property purchased for €350,000 would generate approximately €35,000 in transfer tax.
Taxes on New-Build Properties
When purchasing directly from a developer, buyers pay:
VAT (IVA)
New properties are subject to 10% VAT on the purchase price.
Stamp Duty (AJD)
In addition to VAT, buyers must pay Stamp Duty (AJD), which is generally 1.5% in Catalonia.
For a new-build property priced at €400,000:
- VAT: €40,000
- AJD: €6,000
- Total taxes: €46,000
Reduced Rates and Tax Benefits
Reduced tax rates may apply to:
- Buyers under 35 years old.
- Large families.
- Single-parent families.
- People with disabilities.
- Buyers of protected housing.
Additional Purchase Costs
Besides taxes, buyers should also budget for:
- Notary fees.
- Land Registry fees.
- Mortgage valuation.
- Administrative services.
- Real estate agency fees, where applicable.
These expenses typically represent between 1% and 3% of the purchase price.
Conclusion
Understanding the taxes and costs associated with buying a property on the Costa Brava is essential for effective financial planning. At Finques Santa Cristina, we guide our clients through every stage of the purchasing process, ensuring complete transparency and peace of mind.
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