Purchasing a property in Marbella is a dream for many, but understanding the financial obligations that come with it is crucial. From annual taxes to hidden costs, being well-informed can save you from unexpected surprises. This guide will walk you through the essential aspects of annual taxes and hidden costs in Marbella’s property market.
Understanding Marbella’s Property Tax System
Marbella, like the rest of Spain, has a structured property tax system that every buyer should be aware of. The primary tax is the Real Estate Tax (Impuesto sobre Bienes Inmuebles or IBI), which is levied by the local town hall. This tax is based on the cadastral value of the property, which is a value assigned by the local government for tax purposes. The rates can vary between 0.3% and 1.3% of the cadastral value, depending on the municipality.
Another significant tax is the Wealth Tax, which, as of 2022, is 100% subsidised in Andalusia. However, the Temporary Solidarity Tax on Great Fortunes, applicable to individuals with a net wealth exceeding 3 million euros, ranges from 1.7% to 3.5%. This tax is currently under appeal but remains in effect.
For non-residents, there is also a Non-Resident Income Tax. This tax is based on the estimated rental income of the property, even if it is not rented out. The rate is 24% for non-EU residents and 19% for EU residents, Iceland, and Norway.
Annual Taxes Every Buyer Should Know
When buying property in Marbella, several annual taxes need to be considered. The Real Estate Tax (IBI) is a mandatory annual payment. The exact amount can be checked by obtaining the last IBI receipt from the seller before finalising the purchase.
Another annual tax is the Garbage Tax, which is paid to the local authorities. The amount varies depending on the municipality and the type of property. Additionally, if the property is part of an urbanisation or condominium, Community Charges will apply. These fees cover the maintenance of common areas and services.
For residents, the Resident Income Tax is applicable, which takes into account various factors such as employment income and real estate. Non-residents, on the other hand, must pay the Non-Resident Income Tax, calculated based on the cadastral value of the property.
Hidden Costs in Marbella’s Property Transactions
Beyond the annual taxes, there are several hidden costs associated with buying property in Marbella. One of the most significant is the Transfer Tax, which is 7% of the reference value of the property for second-hand homes. For new properties purchased directly from a developer, a VAT of 10% plus a 1.2% stamp duty is applicable.
Legal fees are another hidden cost. It is advisable to engage a local lawyer to assist with the purchase process. The lawyer’s fee is typically around 1% of the purchase price. Notary fees and the registration of the title in the Land Registry also add to the costs, amounting to approximately 1.5% of the purchase price.
Additionally, if the property is owned by a non-resident company located in a tax haven, an annual tax of 3% of the cadastral value is payable. These costs can add up, making it essential to budget accordingly.
How to Plan for a Property Purchase in Marbella
Planning for a property purchase in Marbella involves more than just finding the perfect home. It requires a thorough understanding of the financial obligations and legal requirements. Engage a professional advisor to help navigate the complexities of the tax system and ensure compliance with local regulations. This includes understanding the implications of the Wealth Tax, Solidarity Tax, and Non-Resident Income Tax.
Budgeting for hidden costs is also crucial. Factor in legal fees, notary fees, and registration costs. Additionally, consider the ongoing expenses such as community charges and maintenance fees. By planning ahead, you can avoid unexpected financial burdens and enjoy a smooth property purchase process.
How MPM Buyers Consultants Can Guide You
At MPM Real Estate Buyer Consultants, we specialise in guiding buyers through the complexities of the Marbella property market. Our team of experts is dedicated to providing comprehensive support, from the initial search to the final purchase.
We offer personalised services to help you understand the various taxes and hidden costs associated with buying property in Marbella. Our consultants will assist you in navigating the legal and financial aspects, ensuring that you are well-prepared for your investment.
With our deep local knowledge and extensive network, we can locate exclusive properties that meet your unique preferences and needs. Our goal is to make your property purchase in Marbella a seamless and enjoyable experience.
At MPM, we are committed to making your dream of owning a beautiful home in the Marbella area a reality. Our dedicated buyer agents are here to guide you every step of the way, ensuring that you find the perfect property that meets your unique preferences and needs. Ready to discover the key to your dream home? Contact our expert team today and let us help you unlock the doors to your future.
