Transfer tax on resale homes – Impuesto de Transmisiones Patrimoniales (ITP)

LoadingFavourite

Home buyers in Spain have to pay a transfer tax, known as ITP (Impuesto de Transmisiones Patrimoniales) when they buy a resale property. The rate varies from region to region.

ITP applies if the property is deemed to be a second or posterior transfer (i.e. not the first time a newly built home is bought), and is paid by the buyer. If any deposit is paid before completion of the sale it is not subject to ITP pro rata. However the full amount of ITP still has to be paid upon completion. In this scenario there is no VAT to pay, and stamp duty is already included in this tax.

The Transfer Tax rate is ceded to the autonomous regions, who can choose to apply the general rate, or their own rate.

The general (national) rule of ITP is 7%, but many of the autonomous regions have applied higher local rates. The rate you pay depends upon the autonomous region where you buy.

This table summarises ITP rates by autonomous region over the period 01/01/2013 – 01/08/2013 (after which ITP was raised to 10pc in both Catalonia and the Valencian Community, and lowered to 6pc on 01/01/2014 in Madrid) ref:

Spanish transfer tax itp impuesto de transmisiones patrimoniales table for autonomous regions 2013

Exceptions to the 7% general rule as follows:

  • Andalucia: As of 01/01/2012, up to €400,000 @8%, next €300,000 @9%, everything after that @10%. So a property of €1 million would attract (€400,000 x 8% = €32,000)+(€300,000 x 9% = €27,000)+(€300,000 x 10% = €30,000) = total of €89,000 in ITP tax.
  • Cantabria: (7% below 300k; as from said amount onwards its taxed at 8%)
  • Asturias: From 8 to 10%
  • Catalonia: 10% (with exceptions for first time buyers / young buyers, disabled, and large families. Raised from 8% as of 01/08/2013)
  • Extremadura: From 7 to 10%
  • The Canaries: 6,5% (no change)
  • Valencian Community: Raised from 8% to 10% in August 2013 with lower rates for certain resident groups like young buyers, disabled buyers, or buyers with large families
  • The Balearics: As of the beginning of 2013, ITP has gone up to between 8% and 10% depending on the property value (the first €400,000 attracts 8%, the next €200,000 attracts 9%, and everything after that pays 10%) ref
  • Madrid: Lowered from 7pc to 6pc on 01/01/2014

More information (in Spanish):
+ Summary article in Spanish paper ABC