The discount on several taxes associated with a purchase of second-hand houses within the Community of Madrid imposed on January 1st will make the property purchase cheaper.
To be precise, the regional government has decreased the Spanish Tax on Property Transfers (ITP, applied when a pre-owned property being acquired) rate from 7% to 6%. Also, the entity has reduced the Stamp Duty (AJD, paid when obtaining a mortgage) costs from 1% to 0.75%, according to the statement of Law 6/2013 on Fiscal and Administrative Measures made public on December 30th by the Official Bulletin of the Community of Madrid.
The ITP discount will result in Madrid being the cheapest place to acquire a second-hand house in fiscal terms, as 6% is hugely distant from the 10% applied by other autonomous communities. Thus, for instance, buying a dwelling for 100.000 Euros in Madrid implies savings equal to 1.000 Euros in respect to 2013 (…).
(…) The other discount on the Stamp duty applies both to the new and pre-owned houses. While buying property is being realized through a mortgage loan (…) one would save 250 Euros in case of a flat for 100.000 Euros (…).
What is more, talking about expenses attached to a house purchase, one shall take into account the valuation, notary, registry and management costs.
Source: Cinco Días