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Taxes when Buying and Owning Property

Taxes relating to property fall into two main categories.

Taxes and expenses when you buy a property

When you buy a new property in a country - basically, in many countries defined as a property that has not previously changed hands, you will be liable to pay VAT (sales tax) on the price of the property.

The tax rates vary. They are, typically, in the range of 5% - 23%.

This tax element may or may not be included in the price of the property as described to you. Obviously, if you are buying a new property, you need to ask whether the price includes the tax as this is a lot of money.

When you are buying a resale property, you will usually have to pay some form of property transfer tax. Rates vary but are, typically, between 3% and 10% of the price of property. This tax is, in most countries, usually paid by the buyer of the property, although you can make other arrangements in your contract with the seller.

In addition to the taxes payable when you buy a property, there are likely to be other expenses of which you need to be aware.

These include:

  • Notary's fees. These vary with the country and the value and type of property.
  • Legal fees. These will vary with the nature and value of the property you are buying. They will typically be about 1% of the price of the property but are subject to a minimum. See our guide 'Buying Property' for more details.
  • Search and enquiry fees.
  • Land Registry fees. These will vary with the type and value of the property.

Taxes and expenses during your ownership of a property

The main tax for which you will have ongoing responsibility is local property tax.

This tax varies depending upon the area where you live and the type and value of your property.

The tax is generally fairly low.

You may also face additional local charges in relation to the collection of rubbish or other municipal services.

Next steps

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© The International Law Partnership Ltd. Page last revised 8th February 2010

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