American - Property near Tarragona, Catalonia

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04 Jul 2017 06:51 by Sam10 Star rating. 3 posts Send private message

Hi I am an American and want to buy property near Tarragona. I thought being near to beach, internaitonal schools, theme parks, airport and a train ride away from Barcelona makes it an interesting buy. I intend to use this property about 2 months a year and rent it out for the rest of the year. 

What sort of considerations should I be aware?  In US there is no real estate agent commissions when you buy property is that the case in Spain? How about taxes on the purchase?  How about taxed post-purchase. 

Sorry for these basic questions as it is a new subject for me. 



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04 Jul 2017 12:13 by mariedav Star rating in Ciudad Quesada. 1094 posts Send private message

The seller pays the estate agent fees. 

Plenty of threads on here regarding taxes but you should allow 14% on top of the price to cover taxes and fees. The main one being 10% IVA or transfer tax then the solicitors, notaries etc. Depending on the price of the property as the higher the price then the fees could only be 12 or 13%. 

Ongoing taxes would be the council tax (IBI) based on the rateable value and can vary greatly as it is raised by the individual town hall. Ours for a 3 bed, 2 bath semi is only €242 a year but just 10km up the road (different council) it is over €500 for the same type property. Rateable value seems to increase the closer to the beach you get. Then there is the imputed rental tax for non-residents which will be payable on the benefit you acquire by owning a property if you don't rent it out. If you do rent it then you have to pay tax on the rental income. You will also need a turistic licence to rent the property out (only required if you rent the property on short term basis).

Also don't forget utility bills. Electricity and water are charged for the provision of those services and the electric bill will probably be around €28 to €30 a month even if no electricity is used and the water (again if not used) around €50 a quarter. 

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05 Jul 2017 04:20 by Sam10 Star rating. 3 posts Send private message

Thank you for the information MarieDav. I know it varies by region but the real estate taxes in Spain seem reasonable by American standards. You mention a tax on rental income - I suppose you meant rental gains (income - expenses). Do you have an idea how much this tax is in Catalonia?  Also do the realors give data like how much the price has appreciated (or depreciated) after the housing crisis. In US there a host of sites like Zillow with extensive historical information so you are not dependent on realtor to give you this information. 

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05 Jul 2017 15:55 by mariedav Star rating in Ciudad Quesada. 1094 posts Send private message

I believe that, as a non-EU resident, you would pay 24% tax on all the rental income but you would not be eligible for tax relieve or expenses accrued. You need to check with a solicitor first but the laws were changed in 2015 because Spain discriminated against EU residents and non-residents. They are now taxed at 19% but can claim expenses for mortgages and ongoing costs. AFAIK this does not apply to non-EU citizens.

One lawyer website states There are allowances made for some expenses, but, only for tax residents in a country within the  European Union, Norway and Iceland and these reduce the amount on which tax is payable. This includes a proportional part of the house insurance, IBI, the community fee, water and electricity if paid by the house owner.

A property site states:

I) Landlords resident in E.U. or E.E.A.

  • Tax relief: Yes, physical persons may deduct, for example, home insurance, mortgage loan interest payments, property maintenance expenses etc. Legal persons may also deduct rental related expenses.
  • Dates: collected annually or quarterly.
  • Tax form: 210.
  • Tax rate: 19% on rental income for 2016.

II) Landlords resident outside the E.U. or E.E.A.

  • Tax relief: no.
  • Dates: collected annually or quarterly.
  • Tax form: 210.
  • Tax rate: 24% on rental income for 2016.

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09 Jul 2017 00:30 by Sam10 Star rating. 3 posts Send private message

Thank you MarieDav. Very helpful indeed. Lastly, any sites that can helpful in understanding market trends and more importantly historical prices of the properties. In the US zillow is one such resource (it gives the historical prices of properties). 

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