What taxes do you have to pay if you are going to buy a house in Extremadura?

As we all know (because we have suffered or we have been told), the purchase of a house entails in any case the payment of several taxes. And not only for the buyer, but also for the seller.

In this post we will deal with those regarding the buyer.

The transmission itself may be subject to Value Added Tax (VAT) or a Property Transfer Tax (TPO), depending on if it is a purchase of new housing (that which is acquired from the developer once the construction or rehabilitation of the dwelling has been completed) or second hand, respectively.

In both cases the tax is calculated based on the selling price. It is important to bear that this value should not be lower than the tax value, since Tax Authorities could check values ​​and request the difference, with fines and interest.

A.- The tax rate in case VAT is 10% and 4% for homes subject to some protection regime. In general, purchases subject to VAT must also be taxed by the Stamp Duty Tax (AJD), which in Extremadura is of 1.50%.

B.- The tax rate due to Property Transfer Tax ( (for second-hand houses) varies regarding the autonomous community where the purchase takes place. In Extremadura two rate types apply: the general and the reduced rate type.

The general rate varies according to the purchase  price. For up to 360,000 € a 8% applies, for prices between 360,000,01 and 600,000 € a 10% and for prices over 600,000 € the rate is of 11%.

The reduced rates apply under certain circumstance like the using of the dwelling as habitual residence, the Personal Income Tax, disabilities, age of the purchaser, or if the adquired dwelling is clasified as of Official Protection

If you are up to buy a house or an apartment in Extremadura, you should take these criteria into account when you calculate costs, in order to avoid getting out of your budget.