Both new construction and second-hand homes carry expenses associated with the purchase. In the case of off-plan houses, the VAT– Value Added Tax–is different from the one paid when buying second-hand houses. This article will deal with the casuistry related to the VAT on newly constructed homes or first delivery.
As can be read on the website of Tax Agency (Agencia Tributaria), by ‘first delivery’ of housing it is understood to mean those acquired from the developer when the construction or rehabilitation of the building is completed — that is, when the architect and rigger issue a certificate of purpose working.
From the Treasury, they also report an exception that must be taken into account when paying VAT: there will be no VAT to pay if the developer rented these new homes for at least two years and then sold it to a third person. In this circumstance, the owner will pay a tax on Onerous Transmissions of Patrimony because it is considered a second transmission. On other occasions, the buyer of the first delivery house must pay the VAT to the seller, who is obliged to enter the amount corresponding to the Public Treasury.
How much VAT is paid for the purchase of new construction?
The Tax Agency determines that the VAT that the buyer supports «is the result of multiplying the price of the house by the tax rate in effect at the time of purchase» – currently 10%. This means, in order to calculate the VAT that must be paid for acquiring a newly constructed home, it is sufficient to calculate 10% of the total deed amount – except in the case of public housing or official protection under the special regime, in whose case taxation is 4%.
For example: imagine we bought a flat that is not under official protection under the special regime or a public protection home. Since its not included in any of the two exceptions which qualify for the 4% tax, we should apply the general VAT rate of 10%. If the deed for this house amounts to 225,000 euros, what would be the total amount of VAT we would have to support? To find the figure, we must calculate:
225,000 euros x 0.10 = 22,500 euros of VAT
Therefore, in order to purchase their new home, the buyer must have liquidity or financing to support a total expenditure of 247,500 euros (225,000 euros of the deed amount + 22,500 euros of VAT). This doesn’t include other expenses derived from the acquisition of a first-class home, such as agency, notary or appraisal.
Source: Aedas Home
Both new construction and second-hand homes carry expenses associated with the purchase. In the case of off-plan houses, the VAT-- Value Added Tax--is different from the one paid when buying second-hand houses. This article will deal with the casuistry related to the VAT on newly constructed homes or first delivery. As can be read on the website of Tax Agency (Agencia Tributaria), by 'first delivery' of housing it is understood to mean those acquired from the developer when the construction or
The International Association of Golf Tour Operators, which pulls the strings of this sector worldwide, has awarded Costa del Sol recognition at the IGTM fair. One of the most powerful associations in the worldwide golf tourism industry, the International Association of Golf Tour Operators (IAGTO), and the main fair in this sector, the International Golf Travel Market (IGTM), has recognized Costa del Sol as the Best European Destination for the practice and enjoyment of this sport. The president of Tourism Costa
Who They Are and Where They Invest? Purchases by foreign buyers increased by 5.4% in the first half of the year. The number of foreign buyers who are purchasing and selling homes in Spain have set a new record – even higher than the peak achieved during the real estate bubble. According to a notarial statistic released on Tuesday, 53,359 transactions were registered in the first half of this year. It is the highest absolute figure of the historical series, which starts
A study of the UMA commissioned by the City Council puts the city behind only New York, London and Barcelona The city of Marbella has the largest number of tourist homes in the province of Malaga, with prices located among the four highest markets on the planet, but its irruption in the tourism industry has not yet helped to reduce seasonality. These are some of the conclusions reached by a report prepared by the University of Malaga (UMA) on behalf of
With more than 6,100 million invested through June, Spain consolidates its position as investors’ favorite destination behind the United Kingdom, Germany, France and the Netherlands. The Spanish housing market continues to monopolize capital interest. With 6,161 million euros invested in the first half of the year, Spain represents 5% of the total volume invested in the European market and consolidated its position as the fifth most-desireable destination with the highest volume transacted until June; with only the United Kingdom, Germany,
With investment of 643,000 million, the highest since 2007. Real estate purchases will increase by 0.5% at the end of the year. But analysts predict a fall of 5% in 2019, forecasting investments will drop next year to around 700,000 million dollars (616,000 million euros). Real estate is on the rise throughout the world. The real estate market will close 2018 with a direct investment in property purchases of 730,000 million dollars (642,651 million euros), according to JLL consultancy. This is the highest
They generate 11% and beat bonds, deposits and the stock market. Housing rentals in Spain have become the most profitable asset for any investor who wishes to get the largest return out of their capital. With interest rates currently flat, and the stock market hemorrhaging red ink due to uncertainty about an economic slowdown, the ROI offered by other financial assets remains negative or flat, compared to real estate which continues to multiply profitability several times over, according to data published
Houses purchases reach a record high in October despite conflict over the mortgage tax. Despite the judicial controversy over the mortgage tax, 43,536 property sales were recorded at the registers in October--the highest figure for the tenth month since 2007--an annual increase of 15.8% Housing sales in Spain advanced at an unstoppable rate last October. Not even controversy following the Supreme Court’s ruling on October 16th regarding payment of the mortgage tax dampened the strong market. According to data released by the