Properties in Javea - Javea Property Management
Buying a Property Cost Money Anywhere
- 7% Stamp Duty I.V.A. (V.A.T.)
- 1% Notary Fee
- 1% Registry Fee
- 1% Legal work
This is 10% so, if you work on having to pay an extra 10% on top of the declared value, this should cover all necessary costs. You will also need a Spanish bank account.
Mortgage Costs
When purchasing with a mortgage, banks charge a 1% opening fee and then you have notary and registry costs. So, it will be another 3% on top of the usual purchase cost of 10%.
Selling Costs
If you are selling a property the costs vary between being a Resident or a Non-Resident. You won't have registry or notary costs, you will only have taxes to settle and if the property has been extended and the extra m²'s are not on the deeds, this will have to be arranged at the sellers cost.
On the 1st January 2007 all tax laws changed. Prior to this change the non-residents capital gain tax was 35% (of the profit) with 5% retention and for Resident sellers it was 18% of the capital gain with a 2 year time-scale for them to 'roll over' the profit into another property. After the changes it is now the following:
Costs for Non-Resident Sellers
- Agents fees 4.7% + 16% IVA (VAT)
- Ground tax (Plus Valia)
- 3% non residents retention
The 3% non-residents retention is retained from the seller on the day of completion and is paid to the Spanish treasury on account toward the capital gains tax (CGT). The CGT is calculated at 18%. The sellers appointed fiscal representative will then calculate the CGT for clients and if the 18% is a lesser amount than the money paid to the treasury the fiscal representative will apply for a tax rebate. In the event that the CGT is a higher amount than the initial 3% paid to the Spanish treasury the difference should be paid.
Costs for Resident Sellers
- Agents fees 4.7% + 16% IVA (VAT)
- Ground tax (Plus Valia)
To be classed as a resident you must prove with a certificate from the relevant tax authority that you declare your income in Spain. This includes pensioners and retired persons as well. The presentation of just a resident’s card is no longer sufficient and must be accompanied by said certificate.
Resident sellers who sell before owning the habitual property for less than 3 years has to pay 18% capital gains tax (CGT). If it has been the habitual property for more than 3 years, any profit can be 'rolled over' into the next property, to cancel the CGT. Residents of a habitual property for more than 3 years, who are 65 years of age when selling, are exempt of all CGT.
