LOCAL TAX INFORMATION
This page contains general information aimed specifically for Arboleas residents but the general principles apply to all towns.
When buying a property you would usually start with a purchase contract (a compraventa).
This is taken to a Notary who will produce the title deeds (Escritura).
This Escritura is then taken to the Property Registry in Huercal Overa where it is registered.
At each stage there is a registration fee to pay, as well as any lawyer fees. However the largest and therefore most important cost is the Registration Tax (Impuesto Transmisiones Patrimoniales, ITP)
What is the Registration Tax (Impuesto Transmisiones Patrimoniales, ITP).
The ITP is calculated on either the purchase price, or the Fiscal Valuation WHICHEVER IS THE LARGER. Therefore it is important to understand that if you buy a property below normal market values, such as a bank repossession, the ITP could be calculated on the Fiscal Valuation if it is higher.
The Fiscal Valuation is the Catastral Value (which in the past in the UK would be the rateable value) multiplied by a Coefficient.
The Coefficient varies town to town and year by year. It is published around June each year and is intended to reflect the true market value.
In Arboleas the current (June 2016) Coefficient is 1.65
Every house is different, but a typical Catastral valuation (January 2015) is 70,000 euros. When multiplied by the current coefficient gives a Fiscal Value of 115,500 euros.
Remember the tax is based on the higher of the purchase price and the Fiscal Value.
For a re-sale property the ITP (Registration Tax) is 8%.
For a first registration of a new build (Escritura Obra Nueva) the tax is 1.5%, reflecting the fact the IVA (VAT) will have been paid on the purchase.
REGISTERING A NEW BUILD
In general you will have a contract either to buy the land and then for a new build, or a joint contract for both land and house. The contract may refer to IVA or not. However the presumption is that IVA is a part of the cost shown in your contract, because it is a legal requirement for the builder to have declared the cost for IVA.
It is assumed that when registering a new build (Obra Nueva) the land will be included as part of the Escritura of Obra Nueva.
Thus the ITP which should be applicable when registering the house AND land is 1.5%.
Other costs when registering a new house will be:-
Certificate of First Occupation from the Town Hall, probably around 800 euros depending on the size of the construction.
Notary registry fee, around 500 euros.
Property registry fee, around 250 euros.
Every property owner is obliged to register their property with the Catastral Office.
This is particularly important when buying a re-sale, because the property will usually be registered with the previous owner.
Registering in your name is very simple.
Take your documents to the Town Hall Catastral Office and it only takes a few minutes. The cost is 13 euros.
PROPERTY TAX (COUNCIL TAX)
Impuesto sobre Bienes Inmuebles (IBI)
The Property Tax (IBI) is a direct tax levied on the value of property. It is collected by the Town Hall and is used by the local council to provide services.
The tax is based on the Catastral Value of the property (land and buildings).
The Catastral value is determined by central government tax authorities, and the tax rate is controlled by law, and is determined by the local council.
The current tax rate in Arboleas for urban property is 0.5%
The tax period is the calendar year.
The available period for payment is from 20th July to 20th November for that calendar year. This is called the period for voluntary payment. If it is not paid by the final date then there is a charge for late payment.
If you opt to pay by Direct Debit you will get a 5% discount, and the bill will be sent to your bank on the final day of payment.
Tax on Motor Vehicles
1. The tax on a Motor Vehicle is a direct tax levied on the ownership of vehicles which are suitable for use on public roads, whatever their class and category.
2. The tax is levied on a vehicle which has been registered in public records and has not been de-registered (BAJA).
1. The tax period is the calendar year, except in the case of first acquisition of vehicles. In this case the tax period shall begin on the day that such acquisition occurs.
2. The tax is levied on the first day of the tax period.
3. The amount of the fee will be discounted by calendar months in cases of first acquisition or deregistration of the vehicle. Apportionment shall also be applied in the same terms in cases of temporary de-registration or theft of vehicle, calculated from the moment in which the temporary de-registration is registered.
The available period for payment is from 5th April to 5th June for that calendar year. This is called the period for voluntary payment. If it is not paid by the final date then there is a charge for late payment.
If you opt to pay by Direct Debit you will get a 5% discount, and the bill will be sent to your bank on the final day of payment (5th June).
Proof of tax payment
1. When applying for certification of roadworthiness of vehicles, proof of payment of the tax will be required.
2. Provincial Traffic Headquarters will not register a change of ownership unless proof is established of the payment of taxes for the tax period of the year preceding that in which the procedure is done.
The tax is based on the fiscal horse power of the vehicle.
The Vehicle Tax is paid to the local Council and the value varies from one council to another.
In Arboleas the typical value is 50 euros a year.