IVA is charged at 18% on most goods and services in Spain, but not everything gets hit with the full 18%, and the situation is different for property.

Reduced rate ( 8% )

Passenger transport

Toll road

Hotels accomodation

Restaurants

Tickets for cultural performances and entertainment

Sporting events of an amateur nature

Exhibitions and fairs

Animal medicine

Health products and equipment

Flowers, plants, seeds, bulbs and cuttings

Non basic food products and water

Rubbish collection and treatment

Pest control

Wastewater treatment

Super-reduced rate (4%)

Books, newspapers and magazines (Electronic equivalents taxed at full rate).

Scores, maps, sketch pads and other items that may only be used as teaching materials, except electronics.

Human medicine

Basic foodstuffs (bread, milk, cheese, eggs, fruits, vegetables, cereals and potatoes)

Exempt from IVA altogether:

Education, as long as it is provided by the state or licensed bodies

Tutoring on subjects that are included in the curricula at all educational levels

Sporting services provided by public bodies or associations

Cultural services such as museums, libraries, seminars and conferences

Artists, writers, composers and translators of artistic and scientific work

Insurance

Postal services

IVA / VAT on property sales

New property sales are charged to IVA at the reduced rate i.e. 7% soon to rise to 8%

Sales of land for property development are charged at the full rate i.e. 16% soon to rise to 18%

Secondhand property sales also attract a tax of 7% currently but that is not actually IVA but a transfer tax called Impuestos sobre Transmisiones Patrimoniales (“ITP”). ITP is not set at national level but rather autonomous community level. Some communities may wish to raise their ITP rate to 8% when IVA rises and one, Cantabria, has already said in intends to. Another though, Galicia, has said that intends to maintain ITP at 8%. Most have not indicated what will happen either way.

Neither of these taxes is “stamp duty” like we have in the UK. There is a form of stamp duty in Spain called AJD (Actos Juridicos Documentados) on all notarisation of documents. AJD though is only payable on land and new property sales. The rate is a minimum of 0,5% of the sale price but can be up to 1% if the autonomous region so decrees, and most do.

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