Buying a home in Spain is one of the best investments you can make and a great lifestyle choice too. However you should also consider the other costs of buying a home in Spain. Understanding these costs can help you plan ahead and avoid any nasty surprises. Contact Diana Zuuring Lawyers and find out how we can help you spend more of your time enjoying your second home and less on red tape.
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Hidden costs of buying a home in Spain
This is one of those costs that potential buyers overlook when evaluating the costs of buying a home in Spain. Community fees range depending on facilities and maintenance. Therefore, beautifully manicured gardens and great facilities come at a price. So bear this in mind as these costs can become a burden over time. Each owner is responsible for the payment of community fees and a share of expenses incurred in the maintenance and upkeep of a complex.
Rental income tax in Spain for non-residents
Non-residents are subject to taxes on rental income. The calculation is based as a percentage of the net income received or potential income from the rental of a property. This can be at best a bureaucratic process where one must fill tax returns with the Spanish tax authorities and at worst you can be liable to hefty penalties.
Diana Zuuring Lawyers can act as your fiscal representatives here in Spain. So please contact us and speak directly to one of our lawyers so that you can have peace of mind when it comes to your taxes in Spain. This ensures that this hidden cost of buying a home in Spain is kept to a minimum.
Local real estate tax (IBI):
The local Spanish real estate tax “Impuesto sobre Bienes Inmuebles” is the equivalent of a UK Council Tax. It is otherwise known in its abbreviated form as IBI. This property tax is based on the value of the property and will vary from town to town. Again, this adds to the costs of buying a home in Spain and something one should consider before making a purchase.
Below is another cost of buying a home in Spain…
Your wealth may increase the costs of buying a home in Spain.
Spain reintroduced the Wealth Tax after having abolished it in 2009. Thankfully, this time around it has a more generous level of exemption. So now, the first €700,000 of an individual´s assets are now exempt from tax. Nevertheless this may become an additional cost to buying a home in Spain.
How do calculate the Wealth Tax?
Calculation of the Wealth Tax is based on a progressive scale. Therefore, sharing the ownership of assets with a spouse results in a lower tax bill. So, for example, a couple that owns a property valued at €1,400,000 and with no mortgage does not need to pay the Wealth Tax. Your mortgages or any other outstanding debt on the property will also be deductible from the tax base.
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To find out more, please contact us and speak directly to a lawyer or tax adviser. We can help you understand all the red tape and added costs of buying a home in Spain.