Expenses and taxes
Buying and selling
Buying a home can be an exciting experience, but it can also be a complex and costly process. In addition to the purchase price of the property, there are a number of costs and taxes that affect home purchases and that buyers need to take into account. We will now break down some of the costs and taxes that may arise in the process of buying a property in the Canary Islands.
The Transfer Tax and Stamp Duty (ITP y AJD) is a tax that applies to the purchase of property in the Canary Islands. The general ITP tax rate is 6.5%, but it can vary according to the circumstances of the buyer (single-parent families, large families, disability,…) or according to the characteristics of the property.
Furthermore, it should be noted that the tax is calculated on the declared value of the property in the purchase contract. The AJD is charged for the public deed of sale and the general rate in the Canary Islands is 0.75%.
In the case of the acquisition of new or recently constructed properties the applicable tax will be the I.G.I.C. (Impuesto General Indirecto Canario) which is calculated on the sale price of the property. The IGIC rate in the Canary Islands is 7%.
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Notary and registration fees
Notary and registry fees are another expense that buyers must take into account when purchasing a property in the Canary Islands. Notary fees vary according to the value of the property and the complexity of the contract, while registration fees are calculated according to the declared value of the property. It is generally recommended to budget around 1% of the value of the property to cover these expenses.
Administration costs
The costs of agency fees are another expense that can arise when buying a property in the Canary Islands. Buyers can hire the services of an agency to help them with the administrative procedures necessary to complete the purchase, as well as in the event that a mortgage loan is taken out to finance the purchase of the property.
The cost of the services of a gestoria can vary depending on the complexity of the process, but it is generally recommended to budget between 0.1% and 0.5% of the value of the property to cover these expenses.
In conclusion, the costs and taxes that affect the purchase of property in the Canary Islands can add up to a significant amount of money to the purchase price of a property. For this reason, it is important that potential buyers take these expenses into account when planning their budget and making a decision on the purchase of their new home.
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