Taxes in Spain

Income tax rates are higher in Spain than in the UK, but there are usually a number of legal ways to minimise liabilities.

The standard VAT rate is currently 16% and levied on more items than in the UK. However the VAT rate on building work is lower at 7%. As in the UK, there is a flourishing black economy.

Capital gains tax is levied on any profit made on selling your house, and the rate can be as high as 35%. This is however a complicated area that also need specialist advice.

Annual property taxes paid to the town (ayuntamiento) in which you live are however very modest by British standards, and yet local services generally seem to be of a higher standard. It is notable that towns take a pride in the appearance of what they build. Roundabouts have olive trees and lavender planted. A new square will have a sculpture that you may or may not like, but there is no denying that the Catalans care about how their environment looks.