The tricks drivers use to pay less in car taxes in Spain
Registration taxes, road taxes and fuel taxes, the costs mount up for car owners in Spain. But there are several tricks people use to get around them.
First of all, some context. While some of these tricks are completely legal, others may be slightly questionable. Nevertheless, seeing as Spain is the country of roguish picaresca behaviour, we think it's still worth highlighting how drivers in Spain manage to pay less vehicle-related fees and taxes.
The Ex-Factory Price is the cost of manufacturing the car, straight out of the factory without any taxes added.
For example, a basic Seat Arona 1.0 TSI 95, has an ex-factory price of €17,161. But several fees and taxes are added to this including transport (€215), 21 percent VAT (a total of €3,649) and, since it emits 123 g/km of CO2, 4.75 percent registration tax - €825 more.
If you add all of this up, you will get your sales price of €21,850. Once you’ve paid for the car and all the taxes involved, there are yet more taxes to be able to legally drive it on the roads.
READ ALSO: What are the extra costs of owning a car in Spain?
One of these is the road tax, which is required by the town hall of the town where the car is registered. The amount will depend on where you live in Spain and is calculated based on fiscal power, which is reflected in documentation when you buy the car.
To get around some of these extra taxes, people in Spain have come up with various ways to reduce them.
READ ALSO - UK driving licence deal: How to exchange yours for a Spanish one
Discount for a large family
Not so much a trick as a perk to be aware of. Those who are part of a large family in Spain, called a familia numerosa, can qualify for a discount on the registration tax.
A family is considered large if it consists of two parents with three or more children or families with two children if one of them is disabled, or one of the parents has a legally recognised disability greater than 65 percent. Single-parent families who three or more children also fall under this group, as do widows or widowers with two or more children.
This group benefits from a 50 percent reduction in the amount of registration tax, on the condition that the vehicle they have purchased has between five and nine seats. They are also not allowed to sell it for the first four years.
Those who don't fall into any of the above categories have found a little-known trick that is somewhat questionable but can help them pay less in these registration taxes. Basically, they get someone from a large family to put their name down as the owner, giving them permission to drive the car for a certain amount of time. Once the four years are up, they are then able to put the car into their own name and pay the corresponding taxes.
Become friends with someone who works for a car manufacturer
Employees of automobile manufacturers often have special discounts on the purchase of one of their models, so many in Spain try to make friends with employees, either of a factory or dealer and get them to buy the car instead. It would then be a similar situation as above – they would have to authorise the person they are buying it for to be able to drive it.
Buy an electric car
Buying an electric vehicle is one of the best ways that everyone can save on taxes. You don't pay registration tax on it and in some areas, you are exempt from all or the majority of fees for regulated parking areas.
You can also benefit from up to a €7,000 discount with the Moves III Plan, which gives aid to those who trade in their old cars for an electric one. Of course, keep in mind that you must return part of this benefit when you do your tax return.
READ ALSO: How to get up to €7,000 to buy a hybrid or electric car in Spain in 2023
Register in another town
In small towns, the road tax rate is much lower than in large cities (up to 300 percent less, according to Associated European Motorists or AEA). For this reason, many drivers register themselves on the padrón in towns and villages where they own a holiday home or where their families live and pay the road tax there instead.
For example, the tiny municipality of Sarratella in the Valencia region has 95 inhabitants but more than 10,000 vehicles registered there.
Keep in mind that you are a resident of the place you register at, and you will not be able to benefit from aid in your true city of residence if you do this. You will also have to vote where you are registered, not where you actually live. Being registered in two or more places at the same time is illegal.
READ ALSO - Padrón: 16 things you should know about Spain's town hall registration
Register your car as an adaptable mixed vehicle
Certain vehicles can be registered as passenger cars or as adaptable mixed vehicles. This means they can be used to transport goods and people, simultaneously and have capacity for up to nine occupants, including the driver.
Some people who are autónomos or self-employed choose this option in order to pay less registration tax.
Be aware, an adaptable mixed vehicle has to pass the ITV every two years instead of every four, and on the highway or dual carriageway it cannot travel at more than 100 km/h.
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First of all, some context. While some of these tricks are completely legal, others may be slightly questionable. Nevertheless, seeing as Spain is the country of roguish picaresca behaviour, we think it's still worth highlighting how drivers in Spain manage to pay less vehicle-related fees and taxes.
The Ex-Factory Price is the cost of manufacturing the car, straight out of the factory without any taxes added.
For example, a basic Seat Arona 1.0 TSI 95, has an ex-factory price of €17,161. But several fees and taxes are added to this including transport (€215), 21 percent VAT (a total of €3,649) and, since it emits 123 g/km of CO2, 4.75 percent registration tax - €825 more.
If you add all of this up, you will get your sales price of €21,850. Once you’ve paid for the car and all the taxes involved, there are yet more taxes to be able to legally drive it on the roads.
READ ALSO: What are the extra costs of owning a car in Spain?
One of these is the road tax, which is required by the town hall of the town where the car is registered. The amount will depend on where you live in Spain and is calculated based on fiscal power, which is reflected in documentation when you buy the car.
To get around some of these extra taxes, people in Spain have come up with various ways to reduce them.
READ ALSO - UK driving licence deal: How to exchange yours for a Spanish one
Discount for a large family
Not so much a trick as a perk to be aware of. Those who are part of a large family in Spain, called a familia numerosa, can qualify for a discount on the registration tax.
A family is considered large if it consists of two parents with three or more children or families with two children if one of them is disabled, or one of the parents has a legally recognised disability greater than 65 percent. Single-parent families who three or more children also fall under this group, as do widows or widowers with two or more children.
This group benefits from a 50 percent reduction in the amount of registration tax, on the condition that the vehicle they have purchased has between five and nine seats. They are also not allowed to sell it for the first four years.
Those who don't fall into any of the above categories have found a little-known trick that is somewhat questionable but can help them pay less in these registration taxes. Basically, they get someone from a large family to put their name down as the owner, giving them permission to drive the car for a certain amount of time. Once the four years are up, they are then able to put the car into their own name and pay the corresponding taxes.
Become friends with someone who works for a car manufacturer
Employees of automobile manufacturers often have special discounts on the purchase of one of their models, so many in Spain try to make friends with employees, either of a factory or dealer and get them to buy the car instead. It would then be a similar situation as above – they would have to authorise the person they are buying it for to be able to drive it.
Buy an electric car
Buying an electric vehicle is one of the best ways that everyone can save on taxes. You don't pay registration tax on it and in some areas, you are exempt from all or the majority of fees for regulated parking areas.
You can also benefit from up to a €7,000 discount with the Moves III Plan, which gives aid to those who trade in their old cars for an electric one. Of course, keep in mind that you must return part of this benefit when you do your tax return.
READ ALSO: How to get up to €7,000 to buy a hybrid or electric car in Spain in 2023
Register in another town
In small towns, the road tax rate is much lower than in large cities (up to 300 percent less, according to Associated European Motorists or AEA). For this reason, many drivers register themselves on the padrón in towns and villages where they own a holiday home or where their families live and pay the road tax there instead.
For example, the tiny municipality of Sarratella in the Valencia region has 95 inhabitants but more than 10,000 vehicles registered there.
Keep in mind that you are a resident of the place you register at, and you will not be able to benefit from aid in your true city of residence if you do this. You will also have to vote where you are registered, not where you actually live. Being registered in two or more places at the same time is illegal.
READ ALSO - Padrón: 16 things you should know about Spain's town hall registration
Register your car as an adaptable mixed vehicle
Certain vehicles can be registered as passenger cars or as adaptable mixed vehicles. This means they can be used to transport goods and people, simultaneously and have capacity for up to nine occupants, including the driver.
Some people who are autónomos or self-employed choose this option in order to pay less registration tax.
Be aware, an adaptable mixed vehicle has to pass the ITV every two years instead of every four, and on the highway or dual carriageway it cannot travel at more than 100 km/h.
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