Whether you are a resident or a non-resident, the taxes raised below apply to both and fall into various categories.
Impuesto Sobre Bienes Inmuebles (IBI)
The IBI is an annual charge raised and spent by the local Town Hall when you own a residential property. This is payable by the owner.
The amount is calculated on the basis of the ‘valor catastral’ (lowest local tax valuation) of your property.
The full name of this tax is ‘Impuesto Sobre el Incremento de Valor de los Terrenos de Naturaleza Urbana’.
Plusvalía means ‘gain’ and is a tax levied by Spanish Town Halls on the increase in the value of urban land at the time of the sale. This excludes the value of any buildings.
The Plusvalía is calculated on the ‘valor catastral’ (lowest local tax valuation) of the land at the time of accrual, being allocated a revaluation according to the years lapsed since the previous transfer.
Over the past two decades, the land values have increased, despite the allowance for inflation, and because of this the amount of tax payable is usually higher the longer the property is owned.
Property Transfer Tax
The ‘Impuesto sobre el Valor Añadido’ (IVA), also known as the Spanish VAT, is payable at 10% on new build properties, resold, or unregistered properties.
Additionally, there is a document fee: ‘Impuesto sobre Actos Jurídicos Documentados’ (AJD). This is similar to the stamp duty tax and it is 1,5% in the Comunidad Valenciana (unless you purchase the property as main residence and you are able to prove residency; it this case, it will be 0,15% of the declared value).
The Spanish Property Transfer Tax payable for all other residential property acquisitions is the ‘Impuesto sobre Transmisiones Patrimoniales’ (ITP). This is around 10% in the Comunidad Valenciana, although in some Spanish Regions it can be slightly increased or reduced.
The general VAT rate is 21%, and reduced rates can be at 18%, 10%, 8% or 4%, depending on the type of goods or services.
Waste Tax (Tasa Residuos Sólidos)
These are rubbish collection charges. In the Comunidad Valenciana, the Tax Collector is called ‘Suma Gestión Tributaria’ and they will collect this tax on the Town Hall behalf.
Other local taxes
Town Halls can raise taxes for other affairs and to cover a shortage.
If you would like more information on Spanish taxes, we recommend that you get in touch with tax advisors who can assist you.