\r\n\r\nFor this resignation to take effect and be valid, and therefore VAT payable, a number of requirements and formalities must to be met, which basically are:\r\n\r\n1.-The buyer and vendor must be VAT payers, acting in the exercise of their activities. In your case, you must be a businessman buying the property (restaurant) for your business. You could not hold the operation to VAT if you were buying a house to live in it, since in that case it would not be as a part of your business activity.\r\n2.-Also you as the buyer should be entitled to the full deduction of the VAT. This does not occur when for example a person has a VAT exempt activity, in this case would not be entitled to deduct the VAT.\r\n3.-The renunciation to the VAT exemption and therefore the subjection to it, must be communicated prior to or simultaneous to the handing over of the property.\r\n\r\nWe recommend that this waiver and compliance with the above requirements are expressly stated in the Purchase Title Deed itself to avoid problems and comply with the formalities required.\r\n\r\nAlso be aware that Landlords who let out their properties in a habitual and professional way, may be considered VAT payers, and therefore could take advantage of the possibility to pay VAT rather than TPO in a resale of a property.\r\n
Conclusion.<\/h4>\r\nFor all the above, before buying a property for your business (commercial property) or a property only to the purpose to be let out in a professional way, you should consult your lawyer about the most convenient way to do it, as subject the purchase to a one tax or another, can potentially save you many thousands of euros.\r\n\r\n6. TAXES RELATED TO THE SALE AND PURCHASE OF HOUSES.<\/strong><\/h3>\r\nThe purchase of a property generates a number of taxes, some of them are:\r\n\r\n1.-In the event of second and subsequent transfers are generally paid by the buyer the Transfer Tax of 7% (in the Valencian community).\r\n2.-In the event of first transmissions, in general, purchases made directly from the developers of a new property, buyers must pay now 10% VAT, plus Stamp Duty at 1.50% in the Community of Valencia ( Alicante, Valencia and Castell\u00f3n provinces). * All of them without taking into account reductions for residence, etc. The purchaser of plots pays 21% VAT.\r\n3.-Must be paid by the seller\/vendor the PLUSVALIA also known as the municipal capital gains tax this is the Tax of the Increase in Value of Urban Land, that is to be paid to the Town Hall where the property sold is located.\r\n4.-The seller must pay CAPITAL GAIN TAX (CGT) which tax the gains produced for a sale, this means when we are selling that the cost of acquisition value (price, taxes, notary fees, Registration fees for the property, and other expenses such as legal fees paid when you acquired the property) is less than the cost \/ value transmission (sales price, less PLUSVALIA TAX, less agents fees if applies, etc). Keep in mind that the cost \/ value of the acquisition should be updated according to the coefficients established annually by Law and that special rules also apply for the properties acquired before 31\/12\/1996.\r\n