Real estate transaction costs and taxes in Spain

Cost

Cadastre certificate: in general terms, approx. EUR 8.64 (plan) Cadastral map: it depends on the size and nature of the Property and on the format of the map approx. EUR 4.44–EUR 50.

VAT

8%

Cost

N/A

VAT

N/A

Cost

Depends on the number of entries or
inscriptions of the plot and on the type
of search (binding or not binding):

• Non-binding search: EUR 9.02 online search; EUR 3.49 standard, not an online search.
• Binding search: EUR 6 or EUR 7 per entry, except for “certificate title deed” (total cost EUR 9.015) and “encumbrance’s certificate” (total cost EUR 24.04).

According to the information provided, the cost of a complete certificate of a property is approx. EUR 15– EUR 30, depending on the number of entries.

VAT

21%

Cost

Depends on the number of entries or inscriptions of the plot and on the type of search (binding or not binding):

• Non-binding: EUR 2.98 to EUR 30
• Binding search: approx.EUR 6 per entry

VAT

21%

Cost

0.2%–0.4% of the purchase price, depending on the nature of the property

VAT

21%

Cost

In general terms, depends on the location and the use of the property.

VAT

21%

Cost

1. On first transfer of new buildings or land available for building.
2. On second and subsequent transfer of buildings.

VAT

1. 21% non-residential buildings, 10% residential buildings.
2. Exempt (in case that the transaction is exempt of VAT, Transfer Duty would be applicable. However, election for VAT may be made, subject to specific conditions).

Cost

1. The minimum general tax rate applicable for transfer duty is 6%. Notwithstanding this, each autonomous region could impose its individual tax rate which should be equal or greater than the minimum general rate above mentioned (most of the autonomous regions have established a tax rate between 6 and 11%).
2. Stamp Duty is not applicable if the transaction triggers Transfer Duty. If the transaction is subject to VAT (or election for VAT has been made), stamp Duty will be applicable (in addition to VAT). The Stamp Duty general minimum rate is 0.5%. However, each autonomous region may impose a different Stamp Duty rate, which shall be equal or higher than the minimum rate. Most of the autonomous regions have established higher Stamp Duty rates between 0.75 and 3% (usually, higher rates are applied when the transaction was initially subject to Transfer Duty but election for VAT has been made).

The transfer of shares held in a Spanish company is generally exempt from VAT and Transfer Tax, except when the following requirements are met, in which case the transfer is subject to VAT/Transfer Tax:

• At least 50% of the assets of the company (including subsidiaries) whose shares are being sold is real estate located in Spain, and
• As a result of the transfer, the acquirer obtains or increases its control of the company (i.e. meaning by control when the acquirer directly or indirectly holds more than 50% of the share capital of the company), and
• The acquisition has been structured as a transfer of securities to avoid the triggering of VAT or RETT in the transfer of the relevant real estate assets. This is deemed to be the case when:
  • Such real estate owned by the company is not assigned to business activities; and/or
  • When the securities that are transferred had been acquired less than three years ago in exchange for a contribution of Spanish real estate assets to an entity and such real estate assets are not assigned to business activities.

The aforementioned exception would not be applied in the event of secondary transfers of listed shares in an official secondary market. In case RETT were to be triggered, it would be applied to the fair market value of the real estate property owned by the company (including subsidiaries) whose shares are being transferred. The general rate applicable is 6%–11% and the taxpayer would be the entity acquiring the shares.

If the Seller is an individual, capital gains derived from the transfer of real estate, are taxed at a rate of 19% on the first EUR 6,000, 21% from EUR 6,000 to EUR 50,000, and 23% on income exceeding this amount of EUR 50,000. If the Seller is a company, income is taxed at 25% (general rate). Please note that if the requirements established by the Spanish CIT law are fulfilled the 12% deduction for reinvestment in extraordinary profits could be applicable. In Spain a tax is also applicable over the increase of the value of urban land plots in which the obliged party is the seller except when the seller is an individual non-resident in Spain

If the Seller is an individual, capital gains derived from the transfer of shares in a company owning real estate, are taxed at a rate of 19% on the first EUR 6,000, 21% from EUR 6,000 to EUR 50,000, and 23% on income exceeding this amount of EUR 50,000. If the Seller is a company, income is taxed at 25% (general rate). Please note that if the requirements established by the Spanish CIT law are fulfilled the 12% deduction for reinvestment in extraordinary profits could be applicable. In Spain a tax is also applicable over the increase of the value of urban land plots in which the obliged party is the seller except when the seller is an individual non-resident in Spain.