The Property Transfer Tax (ITP) is a tax applied in Spain to the transfer of property and rights. This tax is essential in various economic transactions, including the purchase of homes, the acquisition of vehicles, and the transfer of inheritances. In this article, we will address all the key aspects related to ITP, including how it is calculated, who is required to pay it, the deadlines and locations for payment, and the consequences of non-compliance.
The Property Transfer Tax (ITP) is an indirect tax applied to the transfer of property and rights between individuals. It is applied to the purchase and sale of homes, vehicles, or capital increases; it is generally a percentage of the actual value of the property acquired. This tax is collected by the autonomous communities, which is why the regulations and tax rates vary depending on the region in which the transaction takes place.
As mentioned above, depending on the autonomous community where the transaction takes place, there is significant variability in the tax burden.
On the other hand, when calculating the ITP, you must bear in mind that there are exceptions and reduced rates in each region that may benefit you.
The general types of ITP in each autonomous community are as follows:
Autonomous community
Ceuta / Community of Madrid / Melilla / Navarre 6%
Canary Islands 6.5%
Andalusia / La Rioja / Basque Country 7%
Galicia / Murcia 8%
Aragon / Asturias / Castile and Leon 8-10%
Extremadura 8-11%
Balearic Islands 8-13%
Cantabria / Castile-La Mancha 9%
Catalonia / Valencian Community 10-11%
8% on subsidized housing (VPO) that is the primary residence; and on the purchase of a primary residence by people under 35 with incomes of up to €25,000 or €40,000 jointly. 4% rate for special regime VPO; for large or single-parent families, as well as for women who are victims of gender violence, with a taxable base of €30,000 or €47,000 jointly, a limit that rises to €35,000 and €58,000 jointly for special large families. It is also 4% for the primary residence of persons with disabilities (at least 65%).
5% rate for primary residences of large or single-parent families, people with disabilities, or young people up to 32 years of age, all with an income of up to €36,000.
tes 4% of ITP for the primary residence of large families. If they previously owned another home, they must sell it within two years.
4% for special-regime subsidized housing. And 3% for first homes or the purchase of a larger home (10% of usable floor space) for large families with an income of less than €44,000. Also 3% for people with disabilities (of at least 65%), with an income of less than €40,000 and a taxable savings base of less than €1,800.
4% for primary residences of people under 36, large families, people with disabilities (65% or more), subsidized housing, all with conditions, such as maximum income. Rate of 0.01% for people under 36 in less populated areas.
5% for subsidized housing (VPO) and for first homes for people under 36, in both cases for incomes up to €18,030 for individuals or €30,050 for couples, and €1,800 of taxable savings. And 5% for people with disabilities (of at least 33%). For large families, 5%, which drops to 3% for incomes up to €30,600 if the property is purchased within 5 years of acquiring the status or having a child.
One of the most common confusions in the field of taxation is the distinction between Property Transfer Tax (ITP) and Value Added Tax (VAT). Both are indirect taxes, but they have different characteristics and applications.
VAT is applied to the supply of goods and services in the course of economic activities, mainly affecting commercial transactions.
The ITP, on the other hand, applies to property transfers between private individuals, such as the sale of property between individuals.
VAT has standard tax rates (21%) and reduced rates (10% and 4%), applicable to most transactions.
The ITP, on the other hand, varies depending on the autonomous community and ranges from 6% to 11%.
VAT applies to transactions carried out by entrepreneurs and professionals.
The ITP applies to transactions between individuals, although there are exceptions for transactions carried out by companies.
In summary, VAT is a tax that applies to economic and commercial activities, while ITP focuses on transfers of property and property rights between individuals.
The State establishes everything related to Property Transfer Tax in general, but the Autonomous Communities have jurisdiction over this tax. They are the ones who set the amount to be taxed; this amount will depend on the property to be taxed.
When it comes to the transfer of real estate, the minimum tax payable is 6%. If the transfer involves movable property, the minimum payable is 4%. In cases involving the creation of real rights of guarantee, the minimum tax payable is 1%. This total also applies to corporate transactions (capital increases).
The amount payable for Property Transfer Tax varies depending on the Autonomous Community, so this tax is collected by the tax office of the Community in which the property is located.
To find out how much the ITP (property transfer tax) is for a property, the taxable base on which the calculation is applied is determined by the market value of the property, specifically that determined by the General Directorate of Cadastre, without exceeding the market value. There are no deductions from the taxable base.
In general terms, the points to consider when calculating the ITP for a home are:
But remember that these percentages vary for each Autonomous Community, so you should check depending on where the transaction takes place.
Calculation example:
Let's assume that a person buys a property for €200,000 in Madrid. If the tax rate is 6%, the ITP calculation would be as follows:
ITP = 200,000 x 6% = 12,000 euros
Therefore, the buyer must pay €12,000 in transfer tax.
You may be interested in: property tax.
The obligation to pay ITP falls on the individual or legal entity that purchases a second-hand home; transactions involving new homes are subject to VAT. It is important to note that, although the seller and buyer may agree on who will pay, legally the responsibility lies with the buyer.
In the case of a purchase, the buyer pays, while in the case of renting a property, the tenant is responsible for paying the ITP.
It should be noted that in some autonomous communities there are exemptions or reductions in ITP for certain groups, such as young people, large families, or people with disabilities. For this reason, it is essential to check the specific regulations of each autonomous community to find out if you are eligible for any rebates.
The ITP is paid before signing the public deed of sale, so it is important for the buyer to bear this tax in mind and include it in their budget when planning to purchase the property. The buyer submits a declaration to the Tax Administration of the autonomous community where the property purchase transaction took place. They must use form 600 to complete the details of the transaction and submit it together with the corresponding payment.
The deadline for paying the ITP is 30 business days from the date of the deed of sale. If this deadline is not met, surcharges and interest will apply.
On the other hand, as it is a state tax, it must be paid at the competent office of the respective Autonomous Community.
The ITP is a state tax, payable at the office of the State Tax Administration Agency in the corresponding autonomous community. Each community has its own procedure and platform for managing the tax, so it is important to find out where you should submit your self-assessment.
The tax can be paid in person or online, using electronic means, thus facilitating the process for taxpayers.
Generally, ITP must be paid in a single installment, although some autonomous communities offer the possibility of splitting the payment into several installments, considering those taxpayers who may face financial difficulties when paying the tax.
Those interested in agreeing to this option must submit an application to the Tax Agency of the autonomous community and comply with the established requirements. It is essential to find out about the specific conditions and deadlines for payment in installments, as these vary according to the regulations of each community. Likewise, the granting of payment in installments entails the obligation to pay the corresponding interest on arrears .
Failure to pay ITP will have serious consequences. The competent office of the respective Autonomous Community will initiate an inspection procedure, normally associated with a penalty; failure to pay the tax is considered a tax offense, which gives rise to financial penalties.
Consequently, the competent body will demand payment of the tax liability, the corresponding late payment interest, and, in addition, a penalty on the regularized tax liability.
For all these reasons, and in order to avoid these inconveniences, it is advisable to file your tax return or self-assessment within the specified time frame and make the payment.
You may be interested in: real estate assets.
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If you are considering a transaction that involves ITP, we recommend that you find out about the specific regulations in your autonomous community and, if necessary, consult a professional who can guide you through the process. Complying with ITP is not only a legal obligation, but also a way of contributing to the development and well-being of the community in which you live.
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Funded:
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Objective:
742.418,00 €
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