Today we are going to talk about a crucial issue for those who want to purchase property in this paradisiacal region: taxes.

 

Buying property on the Costa Blanca is a dream for many foreigners, but it is important to understand the tax implications before taking the step.

Here is a basic guide to help you better understand this aspect:

• Property Transfer Tax (ITP): When you buy a second-hand property in Spain, you must pay the Property Transfer Tax (ITP). The tax rate varies depending on the Autonomous Community, but in the Valencian Community, where the Costa Blanca is located, the current tax rate is 10% of the purchase price.
• Value Added Tax (VAT): If you buy a new property directly from the developer, you will likely have to pay Value Added Tax (VAT) instead of the ITP. In this case, VAT is 10% of the purchase price.

• Council Tax (IBI): The Council Tax (IBI) is a local tax that must be paid annually and is based on the cadastral value of the property. Foreign owners are also subject to this tax and it is important to take this into account when calculating ownership costs.

• Non-Resident Income Tax (IRNR): If you are a non-resident in Spain but you own property in the country, you will likely need to declare Non-Resident Income Tax (IRNR). This tax is calculated on the property’s assessed value and varies depending on individual circumstances.

 

It is essential to have the right advice when purchasing a property on the Costa Blanca to ensure compliance with all tax obligations and avoid unpleasant surprises in the future. At A&G Lawyers, we are here to help you every step of the process.

If you are considering buying a property in Spain or need legal assistance regarding taxes and real estate law, do not hesitate to contact us. Our team of experts is ready to offer you the best advice tailored to your specific needs.

Make your dream of owning a property in Spain come true with the peace of mind of having A&G Lawyers by your side!