Spanish Holiday Home Tax

Spanish Holiday Home TaxSpanish Holiday Home Tax

2013 saw Spain increase its tax levies on property purchases.

From the outside, this seems odd given that Spain needs to stimulate its property market to alleviate pressure on its banks that hold a huge amount of toxic property debt.
  • New Build Property - 10% IVA (VAT) is charged on new purchases.
  • Existing Property - Tax Increased from 4% to 10% in the autonomous regions of Catalonia and Valencia.
Given that many local areas in Spain are virtually bankrupt, we see more regions adopting the policy.

Spanish property purchase can be expensive anyway, allowing for:
  • Local Taxes as above
  • Estate agent fees up to 10%
  • Taking on any debts registered to the property
  • Legal fees of around 3%
  • Currency exchange with a weak pound when converting to Euro
  • Local authorities increasing communidad (council tax) fees across the boardLeaving the UK Tips have You Missed Any
  • Water Boards increasing their fees
  • Spain having its credit rating downgraded yet again
The Hacienda (Spanish Tax Office) requesting that all people supply details of assets held in a particular sector (whether onshore or offshore) if the collective value is above €50,000 when filing tax returns (we expect wealth taxes to increase).

Comment


As mentioned above, with the risk to Spanish property prices given the economy is on a knife edge is clear.

Prices may appear cheap and there is demand from buyers from Eastern Europe, so finding the right property at the right price is of course appealing.

There is also the incoming "Golden Visa" where no EU nationals will be allowed to buy property which will offer then the facility of citizenship and then the ability to travel through the "Schengen Agreement" area of Europe (does not include UK and Ireland) without hindrance.

Holiday home taxation in Spain, we fear will get worse. Buy property at your own financial risk or take tax advice from us before doing so.