Interview to Yolanda Lobao, Partner at Auren, published by the Lucas Fox blog on the 17th of December 2015.
Property lawyer Yolanda Lobao explains the local rules and regulation, as well as the tax situation for Buy-to-let properties in Spain.
The transfer of properties when they are second-hand will normally attract Transfer Tax (ITP) at the applicable rate depending on the region in Spain where the property is located (currently the 10% in Catalunya). The tax applicable could be VAT (4%, 10% or 21% as applicable) and AJD (Stamp Duty on Legal Documents at the rate of 1,5%) in case of newly built properties and land. The tax has to be paid by the Purchaser.
The tax rates need to be checked at the moment of conducting the transaction due to the tax laws permanent changes.
Once the property is purchased, there would be taxes associated to the ownership of the property; Non-Residents Income Tax or Residents Income Tax and Wealth Tax payable by Tax Residents and Non-Residents in Spain, with an exemption which varies from 500.000.-€ to 800.000.-€. Both taxes are due to be paid once a year.
To read the full interview, click HERE