As you all may know, home buyers in Spain have to pay a transfer tax when buying a resale property. This is known in Spain as “Impuesto de Transmisiones Patrimoniales” and the rate varies depending on the region. So property transfer tax Spain is a little bit complex. But we are going to explain now what you should expect.
Property Transfer Tax Spain
The ITP is a very complex tax, because it depends on different taxable events. But for now let’s talk about Property Transfer. The national rule of this tax is the 7%, although the given competences to autonomous regions can raise this number to a higher local rate. For example, in Asturias this tax can vary from 8% (for properties with a value from 0 to 300,000€) to 10% ( +500,000€). An expertly legal advice is recommended to calculate the property transfer tax Spain.
The region that have lower taxes is the Basque country, with a 4% that can be even lower depending on:
- Floor Area lower than 120 m²
- The buyer holds large family
- Houses with a floor area lower than 120 m² and plot lower than 300 m² (including the building)
On the opposite side is Valencia, with a tax rate of 10%, only reduced to 8% if many requirements are met, such as being younger than 35, with low incomes and is your first home.
Where to pay?
The ITP (Property Transfer Tax Spain) is paid at the Local Tax Office where the property is, no matter what the place has been given the deed of sale. It is paid by the self-assessment system which means that the buyer has to calculate the value and also has to fill the corresponding form and submitting it at a Bank, aimed to the tax office. When paid, the form is submitted along with a copy of the deed at any branch of the Treasury to be sealed.
This has to be done within 30 days since the execution of the deed of sale.
Sounds hard? Contact us for advice and we will help you with the process. Property transfer tax Spain is a complex system, but it is what we do.