Buying off-plan in Costa del Sol.
Things to keep in mind when buying Properties Off Plan
Usually 10-15 days after the deposit is paid, the private purchase contract must be signed. Upon exchange of these contracts, 30% of the price (minus the deposit) plus VAT is paid.
At this stage you must request the architect’s certificate from the developer stating that the building has been finished according to the building license and the Occupation License from the Town Hall.
We would also suggest a full property inspection and the production of a snagging list which must be agreed to be fixed prior to you moving in.
Taxes and Tax Implications
They say there’s nothing sure in life apart from death and taxes, and buying and selling properties unfortunately incur taxes, however this year there have been some important reductions which make life a little easier.
In 2015 and 2016 there has been a 2% reduction in Capital Gains Tax for non-residents (1% per year) and an exemption for people reinvesting their money into a new property in Spain as a principle residence, so it will be a lot cheaper to sell. There is also a significant reduction in non-residents’ property tax (NRIT), from 24.75% in 2014 down to 19% in 2016.
Finally, the Inheritance Tax laws for non-residents are changing to be in line with their local area, which means that in Andalucia, the surviving spouse will get a 99.9% discount on Inheritance Tax on their primary residence, great news for anyone retiring here.
Overall, taxes to be considered in a purchase/sale of a property vary depending on whether it is a new house or a private purchase property. Generally, the buyer pays all expenses, except the capital gains, the property tax and any outstanding debts.
Property Taxes Value
Added Tax (IVA): 10% is paid by the buyer upon completion. VAT s NOT applicable in a private property sale.
Stamp Duty (IAJD): This is the charge applied to the processing of public documents (notary and administrative documents) in real estate transfers where VAT is applicable. It must be paid by the buyer at the rate of 1.5% in Andalucia.
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