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Increase of Transfer Tax in Valencia and Catalonia Region – 10 %

MODIFICATION IN TAX REGULATIONS – AUGUST 2013-08-26

On the 2nd of August 2013, Valencian and Catalonian Government have modified determinate regulation in relation to:

– INHERITANCE TAX

– PURCHASE/SALE OF PROPERTIES

WE ARE COMENTING IN THIS ARTICLE THE MAIN ASPECTS AFFECTING PURCHASE/SALES

As explained in previous articles, at the beginning of this year 2013, the Spanish government did increase the VAT on NEW PROPERTIES (properties acquired directly from builders), from 8% up to 10 %. And this is for ANY PROPERTY SITUATED IN THE SPANISH TERRITORY (Valencia, Murcia, Andalucía, Catalonia, Balearics, etc.).

This modification, initially,  was not affecting RESALES (properties acquired from a particular), which are not subjected to VAT. Resales are taxed with another tax called “Transfer Tax” (Impuesto sobre Transmisiones Patrimoniales)  . So, resales, in Valencia region was at 8 %, also in other regions as in Murcia.

But, this time, on the 2nd of August 2013,  the “Valencian” and “Catalonian” government, have increased the Transfer Tax up to the 10 %. So, now, buyers will pay the 10 % on properties based in Valencia Region (Alicante, Valencia, Castellon), and in Catalonia (Barcelona, Lérida, Tarragona, Gerona).

Please, note that this increase has been only for properties based in Catalonia and in Valencia region. Other regions, like Murcia, keep the 8 % (by the moment).

Also, Stamp Duty,  has been increased up to 1,5 %. This  is the tax paid:

– In New Properties, together with 10 % VAT

– When there is a mortgage

– When there is an update of the deeds declaring a new construction, or extension, etc.

CONCLUSION:

– ACQUISITION OF NEW PROPERTIES in Spain (Valencia, Catalonia, Murcia, Andalusia), pays 10 % VAT + 1,5 % Stamp duty.

– ACQUISITION OF RESALES:

– In Catalonia+Valencia Region: Pays 10 % Transfer Tax

– In other regions, like Murcia: Pays 8 % Transfer Tax

– UPDATE OF DEEDS in Murcia, Valencia, and Catalonia: 1,5 % Stamp Duty

 

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