Taxes payable on the purchase of a property

Usually the purchase of a home or property, is carried out in public deed before a notary or public notary. The notary is responsible, in addition to writing the deed, to verify the identity of buyer and seller, as well as verifying that they are the owners of the properties to be transmitted and the state of charges on it. When buying a property, the following taxes must be paid.

 

• New properties or first transmission.- The Canary Islands Indirect General Tax (IGIC) is paid, currently 7%.

 

• Used properties or second and subsequent transmissions.- The Transfer Tax (ITP), of 6.5% is paid.

 

Subsequently, the deed of purchase and sale of the properties must be registered in the Property Registry of the locality where the property is located.

 

If the purchase is made with a mortgage from a bank, it will also have to pay the Tax on Documented Legal Acts, currently 1% (this percentage is calculated on what is called total mortgage liability of the loan).

 

From January 1, 2015, in the purchase of real estate other than the first transmission and when the buyer carries out an economic activity that allows him to deduct the IGIC shares paid, the IGIC can be settled instead of ITP.

 

If you wish to expand information with any of the issues outlined here, do not hesitate to contact us at tenerifesur@ceconsulting.es.

CE Consulting Empresarial

Tenerife Sur

C/El Sauce 9, Ed. Fayal, Locales 1-2

38670 Adeje 

 

Tel.: 922 72 41 96