Buying a house in the Valencia Region. Taxes to be paid.

Buying a house is definitely a crucial and pivotal moment in anyone’s life. And it’s important to pay extra attention to detail, so that the transaction goes smoothly. In today’s column we will focus on an essential part of any type of purchase: the taxes to be paid to the Spanish Tax Office. Specifically, the Transfer tax. And both the general and special rates that, depending on your circumstances, could affect your pocket, and save you several thousand euros.

In Spain, the purchase of a second-hand home, between private individuals (no companies) is subject to transfer tax. This tax, although it is a “national tax”, has been transferred to the different regions in our country. So, each region (Andalucia, Valencia, Madrid, Catalonia) is fee to set the rates, deductions, etc applicable to it. In the Valencia region, the general rate is set at 10%. Therefore, if buy a house for 300.000€, you will normally pay a Transfer tax of 30.000€. However, following the same example, if the property has a higher value according to Cadastre, the transfer tax must be paid based on this higher value. This value is known as “Reference Value”. You can check more information about it in our website.

In any case. Are there any special rates and discounts? Yes. The Law in the Valencian region contemplates reduced rates depending on the circumstances, that range between 3% and 8%. Below, we briefly summarize the most common cases in which a reduced rate is applicable. In many cases due to lack of awareness, these reduced types are not applied. For this reason, it is essential to have expert legal advice when purchasing a property.

The reduced rate of 8% is applicable for purchases of more than 180,000€, for first time homebuyers when they will turn the property into their habitual domicile, and they are under 35 years, or the property is categorised as social housing in the general regime.

There is also a reduced rate of 6% in the same cases as before, when the property is under 180,000€. However, if the benefit is claimed due to the buyers being under 35 years old both in the rate of 8% and 6%, the buyer must not exceed a threshold on their Income Tax set by the Valencia Authorities.

Buyers with a disability between 65% or 33% (depending on the disability in question: physical, mental, etc.) may opt to a reduced rate of 4% or 3%  if they plan to turn the property into their habitual domicile, in case of “large family” this reduced rate may also be applicable, etc. depending on the value of the property (more or less than 180,000€)

At White-Baos Lawyers we stand ready to assist you in the purchase of your property in the Valencian Region. Reach out to us without hesitation, we will study your case and offer your expert legal advice.

You may be interested in the following services and articles:

Buying from an heir. Real Estate in Spain. Key issues to consider. Inheritance tax. Deductions and allowances. Land Registry tax charges..

The importance of getting expert legal advice when signing the documents and Initial purchase and sales agreements. Conveyancing. Reservation, deposit, private contract, etc. Expert legal advice..

Advantages of contracting an independent Lawyer in the purchase or sale of a property in Spain..

Carlos Baos (Lawyer)

White & Baos.

Tel: +34 966 426 185

E-mail: info@white-baos.com

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