Property Taxes

Is there a Property Tax office in every town?

No. …..
Sometimes, in bigger towns and cities, the office is in a different location.
In smaller towns, the “Oficina Liquidadora” is to be found in the same office as the “Registro de la Propiedad”.
In bigger towns/cities, the office is in a different building.

What is the purpose of this office?

To check and prepare the paperwork for the payment of certain taxes due on property transactions, e.g. purchase and sale, inheritance, etc.

Where and how are these taxes paid?

This office controls the paperwork, and, when necessary, issues the relevant tax forms which reflect taxes due for payment.

Nowadays, the preparation of tax forms is often controlled by a solicitor (by computer) for due presentation at a bank authorised to accept tax payments and final completion and/or registration of the documentation"

What Taxes have to be paid?

In the Valencian Community, the Tax applicable to the purchase of property in general terms is at the rate of 10%. Also in the Valencian Community, the rate of tax for Deeds to carry out the “Declaration of Building”, “Segregation”, “Dissolving of Community”, or Documented Judicial Acts “Actos Jurídicos Documentados” is 1.5%.

How much Tax do I pay when I purchase a Re-Sale Property ?

In the Valencian Community, the rate of tax (Impuestos de Transmisiones Patrimoniales) for purchasing a re-sale property is 10% of the price declared in the “Deeds of Purchase and Sale” (Escritura de Compraventa). This rate of tax applies to the purchase of a property such as a house, an apartment, a piece of land, or a commercial premises.

How much tax do I pay if I buy a new property from a private owner ?

When you buy from a private owner it is important for you to know whether the owner has previously “declared” the building. If the owner has already completed this procedure (his/her obligation!) then the tax for you to pay will be 10% of the total price of the land and house. If, however, the owner has NOT declared the house (or any extra buildings/construction that may have been added), it is important to ensure that any addition to the living area (or outside area) has been added to the description in the Deeds(Declaración o Ampliación de Obra Nueva). If not then this procedure MUST be done BEFORE you proceed with the purchase. It is very important to check all details with a Solicitor to ensure that the property you wish to purchase has the correct description relating to the accommodation i.e. two floors, 3 bedrooms, l bathroom etc., also that the plot area is correct and the total construction area includes all external constructions e.g. garage, swimming pool, etc.

How much tax do I pay if I buy a new property from a Construction Company ?

In the case where you wish to purchase a NEW DWELLING from a Construction Company, then the type of tax is V.A.T. ((I.V.A.) and the rate is 10% plus the extra amount of 1.5% known as “Actos Jurídicos Documentados” (Documented Judicial Acts). There are times when the V.A.T. is 21% should you wish to purchase an Industrial Unit, or a commercial premises or simply a plot of land from the Construction Company.

BEWARE!! and always check out what the tax is going to be, if you wish to purchase a new property from a Construction Company – make sure that YOU KNOW what the costs and/or taxes are likely to be, which will be ON TOP of the price of the property for sale.
When dealing with the purchase and building of a new house from a Construction Company it is common practice to sign a private Contract to engage the building of the house on a plot of land - BUT DO BE CAREFUL – CHECK with a SOLICITOR before entering into any written agreement as it is so important to make sure that any Purchase and Sale Contract linked to a Construction Contract contains ALL the correct and legal clauses and that all details adhere to the apartment or the house that you intend to buy or have built.

If I purchase land first and then build a house, what taxes do I have to pay?

A) If you first purchase land from a private individual you will pay 10% transmission tax (Impuesto de Transmisiones Patrimoniales) of the price in the Deeds of Purchase and Sale (Escritura de Compraventa). If you later decide to build a house, then when you declare the building (Declaración de Obra Nueva) the tax you will be 1.5% of the cost of the construction. B) However, if you first purchase land from a Construction Company, then the V.A.T. (I.V.A.) is at the rate of 21%. If you later decide to build a house, then the V.A.T. (I.V.A.) is at the rate of 10% of the cost of the construction.
BEFORE ENTERING ANY AGREEMENT - do make sure that you obtain a written estimate which should reflect details ALL the amounts due for payment including the amount of taxes due – so that you know the total cost of the property purchase and the construction.

If segregation of land is carried out, what rate of tax applies?

The rate of tax for segregation of land is 1.5% of the price in the Deeds of Segregation (Escritura de Segregación).

Should I wish to disolve the Deeds which I hold with my spouse - how much tax would I/we pay?

– If the Deed owners (maximum of two owners) wish to “dissolve” their property ownership, then the tax applicable is 1.5% of the total value of the property declared int he Deeds.

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