If you are considering buying a property on the Costa Blanca, it is important to be aware of the different costs involved in the process. Below, we detail the most common expenses:
Second-Hand Property
Property Transfer Tax (ITP): This tax varies depending on the autonomous community. In the Valencian Community, the standard rate is 10% of the property value.
Notary Costs: Notary fees for the purchase of a property and signing a mortgage are regulated by the state. These costs generally range from 0.2% to 0.5% of the property value. The notary may then apply a 10% discount.
Property Registration: Includes the cost of registering the property in your name at the corresponding registry.
Processing Fees (Gestoría): Expenses related to the administrative management of the purchase process.
Newly Built Property
VAT (Value Added Tax): The VAT for purchasing a new property is 10%. This tax is paid to the seller along with the purchase price and is then paid directly to the Tax Agency.
Notary, Registration, and Processing Fees: Notary fees for purchasing a new property are similar to those for a second-hand property.
AJD (Stamp Duty): This tax is 1.5% of the purchase price and must be paid within the month following the signing of the public deed.
In the Valencian Community, a reduced rate of 0.1% applies for the purchase of a primary residence, provided the corresponding requirements are met, which can be verified by the Tax Agency.
Property Transfer Tax
In general, the property transfer tax is 10%. It is calculated based on the sale price indicated in the property deed, unless the Tax Agency estimates a higher value for the property. In this case, the tax will be calculated based on the adjusted cadastral value. From January 1, 2023, a special rate of 11% applies for properties with a value exceeding one million euros.
Tax Benefits
There are exemptions and tax benefits for residents and Spanish citizens in certain circumstances:
Young People Under 35: Those buying their first primary home and meeting certain income criteria may benefit from a reduced rate of 8%.
Official Protection Housing (VPO): The tax rate is 8%.
Large Families and Single-Parent Families: For the primary residence of these groups, with income limits, the rate is 4%.
People with Disabilities: Those with a physical or sensory disability of 65% or more, or a mental disability of 33% or more, may receive a 4% reduction in the tax, applicable only to the part of the property acquired.
We are here to help you understand all these costs and navigate the process of buying your property on the Costa Blanca. Please feel free to contact us if you have any questions or need further assistance.