What is ITP?
ITP stands for Impuesto sobre transmisiones patrimoniales. It’s essentially a type of transfer tax that you pay when you buy a second-hand property or a car for example. It can also be levied on corporate transactions.
The majority of the time, you will hear about it if you are buying a home in Spain. It’s referred to as a transfer tax because it’s a fee you pay when wealth is transferred from one person to another.
Who pays the ITP?
In all situations it’s the buyer who is responsible for paying this transfer tax, not the seller.
How much is ITP?
Since ITP is a regional tax, each Autonomous Community is responsible for setting its own rates. Therefore, the amount will differ depending on where you buy the property or vehicle.
The State sets the minimum ITP rate at six percent and then reach region can choose how much more it wants to charge.
The current ITP rates are:
Andalusia – 7%
Aragón – 8-10%
Asturias – 8-10%
Balearic Islands – 8-13%
Basque Country – 7%
Canary Islands – 6.5%
Cantabria – 9%
Castilla-La Mancha – 9%
Castilla y León – 8-10%
Catalonia – 10-11%
Extremadura – 8-11%
Galicia – 8%
La Rioja – 7%
Madrid – 6%
Murcia – 8%
Navarra – 6%
Valencia 10-11%
How is ITP calculated?
ITP is levied on one of two figures – the price in the property deeds or the cadastral value found in the Cadastral Registry. Whichever figure is the highest, will be whichever the calculation is based on.
How do I pay ITP?
Generally, this tax must be paid when you purchase the property and sign the deed before a notary. But you have a total of 30 days in which to pay it after signing the contract too. If you don’t do it through the notary when you sign the deeds, you must go to the Delegation of the State Tax Administration Agency and fill out forms 600, 620 or 630 to pay it.
Are there any discounts?
Yes, if you fall under a certain category and live in a particular region, you may be eligible to pay less.
The PP has committed to reducing the ITP charged in the 11 autonomous communities in which it governs to 4 percent in Andalusia, Aragón, the Balearic Islands, Cantabria, Castilla y León, Extremadura, Galicia, La Rioja, Madrid, Murcia and Valencia.
This is specifically to help young people access a property, so is only available to first-time buyers under 40 years old.
There are also reduced rates for those with disabilities and sometimes large families.
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