A. Conveyance of a New House
A.1.- Value Added Tax (VAT) .-
It is paid by the purchaser exclusively in the first transmission of a new house, that is to say, in the first delivery of the dwelling made by the developer to the buyer. It has a tax rate of 10% on the price.
A.2.- Tax on Documented Legal Acts (IAJD).-
It imposes tax on the formalization of public documents (notarial, mercantile and administrative) in transmissions of real estate which are not exempt from VAT.
The buyer must pay the property and the tax rate ranges from 0.75% to 2%, depending on the autonomous community. Its calculation basis in mortgages is the mortgage liability and, in the first transmission of purchase of a house, the price that appears in the public deed.
A.3.- Tax on the Increase of Value of Urban Land (Plusvalía Municipal).
It’s a municipal tax that levys the increase of the value experienced in the lands of urban kind since its purchase until the moment of the sale. This must be paid by the seller. The new housing developer can NOT charge this tax on the buyer.
B. Conveyance of a Second-Hand Housing
B.1.- Tax on Patrimonial Transmissions (ITP).
Taxes the purchase of second hand houses (not new housing, which are taxed by VAT, as said before). It must be paid by the buyer of the house and has a tax rate of 10% in the Valencian Region. being the calculation basis the purchase price that appears in the public deed.
B.2.- Tax on the Increase of Value of Urban Land (so-called Plusvalia).
This is a municipal tax that levy the increase of the value experienced in the lands of urban kind. The plusvalia is paid by the seller.
The tax base results from multiplying the cadastral value of the land at the time of transmission, per the years that the seller has been the owner (with a maximum of 20 years) and multiplied with a percentage determined by each municipality, but with the following limits: 3.7% for a period of 1 to 5 years; From 3.5% up to 10 years; Of 3.2% for a period of up to 15 years and 3% for a period of up to 20 years.
The result will be applied a tax rate decided by municipalities, not exceeding 30%. This taxis not applicable when the period of ownership has been less than one year. Likewise, when the period of ownership exceeds 20 years, 3% will be maximum applied.
The municipality must be paid within 30 working days from the date of completion.