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    • When purchasing a home, the associated expenses must be considered.The main expenses are detailed below.

    1. Taxes:

    – Value Added Tax (VAT).
    This is due on new construction and the first transfer. It is generally taxed at 10% and 4% on social housing.

    – Property Transfer Tax (ITP).
    This is due on second or subsequent transfers.It varies by Autonomous Community. In Catalonia a progressive rate is applied based on the value of the property: 10% up to the first €600,000 €, 11% on the excess up to the next €300,000 €, 12% on the excess up to the next €600,000 € and 13% on the remaining excess.
    The rate is reduced to 7% for social housing and to 5% when the buyer meets certain requirements.

    – Stamp Duty (IAJD).
    There are two fees: one fixed and one variable.
    The fixed fee refers to the stamped paper on which notarial documents must be issued and amounts to €0.30 per sheet and €0.15 per page.
    The variable fee depends on the Autonomous Community.In Catalonia it is 1.5% of the property’s value.
    For new-build properties sales both the fixed and variable fees must be paid, while for second-hand properties sales only the fixed fee must be paid.

    – Municipal capital gains tax (Tax on the increase in the value of urban land).
    According to regulations, this tax must be paid by the seller, although it is possible to agree otherwise.

    2. Notary Fees:

    The purchase and sale must be formalized by public deed before a notary. Notary fees are regulated by law and vary depending on the price of the property. They typically range between 0.2% and 0.5% of the purchase price.

    3. Property Registry Fees:

    Once the deed is executed, it must be registered in the Property Registry, whose main function is to guarantee legal security and provide greater protection to the owner. Fees are also regulated by law and vary depending on the price of the property. They amount to between 0.10% and 0.25% of the purchase price.

    4. Mortgage costs (if financing is available):

    – Property appraisal:
    This will be carried out by a company approved by the Bank of Spain and usually costs between €300 and €500.

    – Mortgage arrangement fee:
    This is a charge that banks apply at the outset to cover administrative, assessment and management costs. It usually ranges between 0.5% and 1% of the loan value.

    – Home and/or life insurance:
    By law it is only compulsory to take out home insurance with coverage for damage caused by fire, flooding or natural disasters. However, banks recommend taking out other types of insurance, such as life insurance.

    Below we’ll share some practical ideas and tips you can follow to boost the value of a home you’re planning to sell.

    1. Neutral colors in paint.

    An easy and inexpensive way to create more spaciousness and light in the rooms of a home is to use neutral colors with low saturation tones and without a dominant primary color, such as white, light gray, or beige. They are characterized by their warmth and elegance, allowing them to create a serene and welcoming atmosphere and are ideal for achieving a minimalist look.

    2. Order and cleanliness.

    A tidy home optimizes the use of space, making it a more pleasant and functional place and contributing to the well-being of those who live there. Likewise cleanliness in a home is essential to convey peace and tranquility and create a healthy and positive environment that helps visitors imagine themselves living there.

    3. Lighting.

    You can improve the value of a property by following some simple lighting tips, such as maximizing natural light to make rooms feel more spacious using mirrors and light curtains that reflect and transmit light, using warm and neutral light bulbs that encourage relaxation and rest, installing auxiliary lamps that help illuminate areas of the home that the main light fixture doesn’t reach and also decorate the home, etc.

    4. Plants.

    Introducing plants adds a touch of color and vitality to the home.They’re also beneficial for your physical and mental health as they help purify the air, increase humidity, absorb noise and reduce stress.
    On the other hand they’re an additional decoration and adornment for the home.
    So there are only advantages, although it is advisable to select the most suitable plants according to the characteristics of each space where they will be placed.

    5. Clear spaces.

    Keeping rooms clear and organizing the space helps create a sense of greater spaciousness. It’s essential to find a balance when arranging furniture. It is advisable to remove or hide unnecessary objects and items that do not contribute anything, avoid overloading the rooms and use furniture with clean lines, prioritizing simplicity, functionality and harmony. The goal is to create a calm, tidy and welcoming environment.

    In short, you don’t need to make large investments to improve the value of your home. Just follow these tips.

    Taking out a mortgage is a very important financial decision and multiple factors must be considered before making a decision. Here is a list of the main issues you should consider:

    1. Mortgage type.

    2. Interest rate.

    3. Monthly installment and capacity payment.

    4. Repayment term.

    5. Fees and associated expenses. 

    6. Linked products.

    Increases in value resulting from the following are exempt from paying capital gains tax:

    a) The creation and transfer of any easement rights.

    b) Transfers made by persons as a result of the transfer in lieu of the habitual residence of the mortgage’s debtor or its guarantor, for the cancellation of debts secured by a mortgage on that property.

    c) Transfers of the habitual residence made in notarial or judicial foreclosure proceedings in which the requirements indicated in the previous section are met.

    d) Transfers of properties located within the perimeter defined as a historic-artistic site or that have been individually declared to be of cultural interest, when their owners or holders of real rights can prove that they have carried out conservation, improvement or rehabilitation work on the aforementioned properties at their own expense.

    On the other hand, the Law Regulating Local Taxes allows local councils to grant discretionary discounts in certain cases. In the case of Sant Cugat del Vallés, the following discounts are established:

    a) In transfers by inheritance when the acquirer is a first-degree ascendant or descendant by blood or adoption:

    – 95% discount if the primary residence is acquired.
    – 50% discount if the acquired property is not the primary residence.

    b) In transfers by inheritance where the acquirer is the deceased’s spouse or other de facto or de jure unions with identical rights recognized in the tax system:

    – 95% tax relief if the primary residence is acquired.
    – 60% tax relief if the acquired asset is not the primary residence.

    c) In inheritance transfers from parents to children or from children to parents of premises used for economic activity, if the activity is maintained, will benefit from a 75% reduction.

    The definitive enjoyment of the reductions is conditional upon the purchaser maintaining the property in their estate and continuing to carry out the same economic activity in the case of section c), for four years following the death of the deceased.
    In the event of non-compliance with the maintenance rule a supplementary self-assessment of the subsidized portion must be submitted.

    For the purposes of applying the subsidies the habitual residence is defined as the address of the deceased in the Municipal Residents’ Register. However, the residence will not be considered to have lost its habitual character if the removal from the register was due to sufficiently proven health reasons.
    Up to two parking spaces and a storage room may be included with the primary residence, provided they are located in the same building or urban complex as the transferred residence.

    When renting a property a common concern for landlords is how to guarantee rent collection.

    Below are some guidelines you can follow and different options available to you to ensure, as far as possible, rent collection.

    1. Solvency assessment of the potential tenant

    This involves analyzing and evaluating the potential tenant’s economic and financial situation to determine whether they will be able to comfortably cover the rent and other expenses.

    The usual approach is to gather information about the potential candidate that includes their profession, whether they are employed or self-employed, job stability, monthly income, any debts they are currently paying, references from the landlord of the property where they currently reside, etc.

    2. Consult a register of defaulters

    Another way to verify a person’s solvency is to check if they are listed in any register of defaulters.

    These registries are files containing data on individuals and legal entities that have defaulted on the payment of a debt. They are a very useful tool for assessing the risk of non-payment by a person or entity before granting credit, renting a property, signing supply or insurance contracts, granting a subsidy or financial aid, etc.

    The most well-known registers of defaulters in Spain are: ASNEF, RAI and BADEXCUG.

    3. Provision of a legal deposit and other additional deposits

    The Urban Leasing Law (LAU) establishes, on the one hand, the obligation to require and provide a deposit equivalent to one month’s rent for residential leases and two months’ rent for leases for non-residential use. This deposit is known as the legal deposit.

    The LAU also allows any type of additional guarantee to be agreed upon, such as an additional or supplementary deposit. However, there is a limitation on this additional deposit in the case of residential leases, specifically for contracts of up to five years’ duration, or up to seven years if the landlord is a legal entity. In such cases the value of this additional guarantee may not exceed two months’ rent.

    In the case of leases for non-residential use no limitation is stipulated.

    4. Taking out insurance against possible non-payments

    Another option that allows us to guarantee the collection of rent is taking out non-payment insurance.

    The usual coverage for this type of insurance is as follows:

    Prior to taking out the insurance, the insurer will conduct a creditworthiness assessment of the tenant to assess the risk of non-payment.

    The cost of this type of insurance usually ranges between 3 and 5% of the annual rent.

    5. Joint and several guarantors

    A joint and several guarantor is a person who agrees to respond to the debt of another person or entity assuming the same responsability as the principal debtor.

    The main characteristics of a joint and several guarantor are as follows:

    Municipal capital gains tax (officially known as the Tax on the Increase in Value of Urban Land) is a tax levied by the City Council when an urban property is transferred (whether through sale, inheritance or donation).

    With the latest regulatory reform implemented following the 2021 Constitutional Court ruling, two methods were established to determine the taxable base for the aforementioned tax, allowing the taxpayer to choose the most beneficial one.

    The methods are as follows:

    – Objective method (based on coefficients).

    Applied by the Administration by default.

    The tax base is the result of multiplying the cadastral value of the land in the year of the property transfer by the coefficient assigned according to the number of years elapsed since acquisition until transfer.

    Formula:

    Taxable base = Cadastral value of land × Coefficient assigned to the period of      generation of the value increase.

    Taxable amount = Taxable base × Tax rate

    – Real method (direct estimate).

    It is applied when the taxpayer expressly requests it because it is favorable.

    The real profit obtained is taken as the taxable base. To do this the difference between the transfer value and the acquisition value is calculated and the percentage representing the land’s cadastral value in relation to the total cadastral value of the property in the year of transfer is applied to this amount.

    Formula:

    Total gain = Transfer value – Acquisition value

    Land value ratio = Cadastral value of land / Total cadastral value

    Taxable base = Total gain × Land value ratio

    Taxable amount = Taxable base × Tax rate

    The deadline for paying the capital gains tax is thirty business days from the date of transfer, except in the case of inheritances where the deadline is six months from the date of death, extendable to one year if requested in writing during the first six months.

    For property transfers in Catalonia the taxable base for Property Transfer Tax purposes shall be the highest of the following values: reference value, declared value or agreed price/consideration.

    If in accordance with the above, a taxpayer must value a property at the reference value but declares a lower value, the Tax Agency of Catalonia (ATC) will initiate the corresponding procedure to regularize the taxpayer’s tax situation.

    The taxpayer will receive a proposed supplementary assessment, against which, if he consider the reference value applied to be detrimental to his interests, he may present any objections and evidence he deem appropriate. The objections submitted will be forwarded to the General Directorate of Cadastre so that it may issue a report ratifying or correcting the reference value. Consequently, the arguments will be accepted in whole or in part, or they will be rejected and, where appropriate, a settlement will be issued.

    If a settlement is issued, the taxpayer may challenge the reference value by filing an appeal against the settlement. The ATC will resolve the appeal with a mandatory, prior and binding report from the General Directorate of Cadastre, which will ratify or correct the reference value after considering the allegations and evidence provided.

     

    When a property has no reference value or cannot be certified by the General Directorate of Cadastre the highest of the following magnitudes will be taken as the taxable base for the purposes of Property Transfer Tax: declared value, agreed price/consideration or market value.

    The filing of an appeal against the liquidation only suspends the execution of the contested act at the request of the interested party if it guarantees the amount of that act, the interest on late payment resulting from the suspension and the surcharges that would be due in case of enforcement of the guarantee.

    Market value is understood to be the most probable price for which an asset could be sold free of encumbrances between independent parties.

    If the property does not have a reference value assigned to it on the date of the taxable event, the Tax Agency of Catalonia may verify its value. The property’s value will be verified when the taxpayer declares a value below the criteria contained in the Instructions for verifying real estate values, published annually on the ATC website. Conversely, the declared value will not be verified when all the conditions established in these instructions are met (cadastral value multiplied by the corresponding coefficient).

    If the verified value obtained is higher than the declared value, the taxpayer will receive a proposed supplementary assessment, against which he may submit any allegations and evidence he deem relevant. If the ATC confirms the supplementary assessment, the taxpayer may also choose, within period for lodging the appeal, to file a contradictory expert appraisal. The filing of a contradictory expert appraisal suspends the execution of the assessment.

    In accordance with the provisions of “Law 12/2023, of May 24, on the right to housing” a new reference index has been implemented for updating the rental price in housing lease contracts, which will be applicable from 2025.

    The purpose of this new index is to prevent disproportionate increases in rental prices.

    This index is known as the Residential Rental Reference Index (IRAV) and will apply only to contracts signed after the Housing Law came into force, that is since May 26, 2023.

    The IRAV is defined as the minimum value among three indicators:
    – The annual rate of change of the Consumer Price Index.
    – The annual rate of change of the core Consumer Price Index (CPI excluding fresh food and energy).
    – The adjusted average annual rates of change of the CPI and the core CPI, measured as the difference between the annual growth rates of both the Consumer Price Index and the core Consumer Price Index for each month and a benchmark representing expected medium-term inflation, adjusted with a moderating coefficient.

    The IRAV is published monthly on the INE website. It is normally updated mid-month, reflecting the previous month’s data.

    Lease contracts signed before May 26, 2023, will continue to be updated according to the CPI or the reference index established in the contract.

    It should be noted that the landlord must notify the tenant in writing the rent increase during the month prior to its application.

    A delay in applying the revision shall not imply its waiver or expiry, although under no circumstances may it be applied retroactively.

    Buying a new-build home or a second-hand home involves important differences.Below, we compare the main pros and cons in each case to help you decide.


    New-build homes     

    ✅ Pros:

    1. Modernity: With more open and functional spaces, designs adapted to market trends and current technologies.
    2. Greater energy efficiency: They usually incorporate better insulation, more efficient air-conditioning systems and sustainable materials, which means significant savings in energy consumption.
    3. Less need for renovations: Everything is new and in perfect condition, so there’s no need for immediate renovations or repairs.
    4. Easier customization: Buying off-plan often offers the option of customizing the finishes, allowing the home to be tailored to the buyer’s needs and tastes.
    5. Developer guarantees: With legal protection through guarantees that cover structural defects (ten-year guarantee), which affect the habitability of the property or the finishes of the construction.

    ❌ Cons:

    1. Higher price: They tend to be more expensive than a second-hand home.
    2. Peripheral location: They are usually in new or expanding neighbourhoods, further from the center, not always well-connected and with fewer services.
    3. Delivery times: If you buy off-plan, there may be delays of several months or even years.
    4. Less flexibility to negotiate price: Developers usually have fixed prices.
    5. Additional costs: These include VAT (10%), notary fees and other costs that are not always applied in the same way to second-hand properties.


    Second-hand homes

    ✅ Pros:

    1. More accesible price: They tend to be cheaper, and there’s more opportunity to bargain, especially if the seller is in a hurry to sell.
    2. Central or consolidated location: They are usually in well-connected areas, with all the services and social life.
    3. Immediate availability: In many cases, you can move in within a few weeks.
    4. Possibility of custom renovations: The home can be adapted acoording the buyer’s preferences and budget.
    5. More variety in the market and unique character: There is usually more choice depending on the area, size and price. Also, sometimes you can find old houses with charm or with special and unique architectural elements.

    ❌ Cons:

    1. Need for renovations: They often require renovation, with which can be costly. This implies an additional cost and extra time to make repairs or renovations.
    2. Poor energy efficiency: They tend to have poorer insulation and less efficient air-conditioning systems.
    3. Greater hidden risk: There is a greater likelihood of structural problems, dampness or poor installations that are not always visible to the naked eye.
    4. Higher maintenance costs: Older buildings require more frequent community fees.
    5. Fewer legal guarantees: There is not the same legal protection as in new construction.

    In short, the choice between one option or another will depend on the priorities and needs of each buyer. If you prefer a modern, efficient and ready-to-live-in property, a new build may be the best option. On the other hand, if you are looking for a property with a certain charm, located in an established neighbourhood with services and at a more affordable price, a second-hand property may be the ideal choice.