One-time tax payments
Purchase of real-estate in Spain is subject to either sales tax or real estate taxes (ITP).
Real-estate purchases are only subject to sales tax, if the buying party is an organization. Sales tax is 21% on sales of construction land and company premises. If you’re a first time seller, sales tax is 10% I.V.A.
Later transfers are not subject to sales tax, but real-estate tax.
Real-estate tax (ITP)
All sales that are not subject to sales tax are subject to real-estate tax (ITP). It’s a regional tax, so it can vary by region. The current real-estate tax rates in the Balearic Islands are:
– For the first 400.000€ of the buying price 8%
– Between 400.000.01€ and 600.000€ 9%
– From 600.000.01€ to 1.000.000€ 10%
– From 1.000.000€ onwards 11%
Running costs for the buying party are land and income tax.