What is the main tax that must be paid when buying a luxury home in Costa Brava?
When buying a luxury homes in Costa Brava, it must be borne in mind that the buyer will have to pay a tax that may be the Transfer Tax (Impuesto de Transmisiones Patrimoniales or ITP) or the Value Added Tax ( Impuesto de valor añadido or IVA):
It will be transfer tax or ITP:
- When the seller is a natural person and it is the second or later transfer of the property, the amount that the buyer must pay is 10% of the purchase value if it is less than one million euros and 11% if the amount is greater. That is, if a property is worth 1.5 million euros, the amount payable is 10% up to one million euros and 11% for the remaining amount, in this case, 500 thousand euros.
- When the seller is a legal entity and the buyer is a natural person, ITP will also be applied in the percentages mentioned in the previous point.
The tax is presented in the corresponding clearing office (Oficina Liquidadora) according to the area where the purchased home is located, even if the deed was made in another place. The buyer calculates the amount by filling in the corresponding form and presenting it to any financial institution where he will make the deposit in the account of the Clearing Office. When the ITP has been paid, the form will be presented along with the copy of the deed at any tax office to be sealed.
In the case that the property is a house in Costa Brava, the deadline to make the payment is 30 business days counted from the date of granting the deed.
It will be VAT (IVA) if:
- We are looking at a first delivery or new housing, i.e. when a home is acquired from a builder or developer once its construction (or renovation) has been completed or during the two years after the completion of the works, provided that the buyer is the same person who has used it as a dwelling during those two years. For example: at the end of a promotion, the properties are rented. Before the end of two years, the lessee proceeds to the acquisition of the house. In this case, the tax applied is VAT, and this will be 10%.
- If the buyer and the seller are businessmen, and we are looking at a second transfer, we can request the waiver of the VAT exemption and, therefore, the operation will be subject to VAT. In this case, the buyer can then deduct this VAT.
The VAT amount is delivered to the seller together with the sale price so that the seller himself may enter it into the Hacienda (Treasury).
The form that should be used by the seller to enter the VAT will be, in general, form 303 and the term of the presentation will depend on whether it is an employer who has monthly or quarterly obligations.
In summary, when the seller is a natural or legal person, and it is not a new build, ITP is paid which will be 10% up to one million euros and 11% of what remains until the purchase price is reached.
When it comes to new construction, VAT of 10% is paid.
When it comes to a purchase-sale between entrepreneurs, you must request that the operation be subject to VAT so that the buyer can deduct it.
If you have any further questions about buying a luxury homes in Costa Brava, please do not hesitate to contact Masó Inmobiliaria.
In Masó Inmobiliaria, we are Real Estate specialists since 1932. Since then, we contributed in the development and construction of the houses in s’agaró in the development of S´Agaró-Vell