COSTS AND TAXES WITH THE SALE-PURCHASE OF PROPERTYS IN MALLORCA

The Public deeds .Escritura. is purchasing contract signed at a notary which is necessary for the entry into the spanish property register. It is connected reside the parchase price of the property with some costs and taxes. These are the fee for the notary, the fee for the porperty register as well as unique and requrring taxes. Here is recomendable to order a lawyer or a .Gestoria. for the necessary declarations.

1. VAT (IMPUESTO SOBRE EL VALOR AÑADIDO . IVA)

If the property is sold the first time. For building land, buisnesses or plots 16%, newly built propertys 7%. For all other property parchases the land taxi is applicable.

2. CAPITAL/LAND PURCHASE TAX (IMPUESTO SOBRE TRANSMISIONES PATRIMONIALES)

This one-off tax specifically cobres any remunerated transfer of land when there is no sales tax. As of 01.01.2000 in the Balearic Islands there is a 7% taxo f the notarially declared parchase price on property parchase, which the buyer has to pay. The taxi s payable within one month from signing the notarised deed.

3. INCOME TAX: PROPERTY SALE

In respecto f the vendor.s tax liability, the buyer is liable to the Spanish tax authorities for up to 3 % of the declared sale price. For this reason, the buyer usually keeps this sum back and pays it himself to the tax office. This rule allows the Spanish tax authorities to ensure that foreigners do not purchase their property in Spain and then leave the country without paying due taxes.

4. CAPITAL GAIN TAX (PLUSVALIA)

Also known as Plusvalía, this tax is collected by the local district and taxes the increase in value of land and property since the last change of ownership of the property, which is set on the basis of the local authority.s own valuation tables. Legally , the vendor is liable for the tax.