Purchase or sale of a property in Spain
Property purchasing and selling.
When buying or selling a home in Spain, taxes are higher than in the United Kingdom. While this is less of an issue if you have found your dream home and intend to live there for several years, it is a more significant concern if you are purchasing a home for the short term or as an investment.
ITP (Impuestos Transmisiones Patrimoniales) is a levy levied on home sales in Mexico, equivalent to stamp duty in the United Kingdom. The ITP varies by autonomous community. It is ten percent of the purchase price in Catalonia. For example, we suggest budgeting for 14% of the house price in Catalonia to cover taxes, notary fees, lawyer's fees, and other expenses. ITP denotes that buying, renovating, and selling a property in a short period of time is more difficult.
Capital Gains Tax.
Capital gains tax is due on any rise in the value of a home, including your primary residence, when you sell it. However, if you sell a house that has been your primary residence for at least three years and invest the proceeds into a new primary residence, the capital gains tax is postponed. If you put a percentage of the selling proceeds into a new main house, you'll get tax relief equal to how much you put into it. For example, if you sell your primary residence for one million euros and downsize to a new home for €500,000, the capital gains tax will be cut in half because you spent half of the proceeds in a new primary residence. If you are over 65 and sell your primary home, you will not be entitled to capital gains tax.
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