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Financial Dictionary - Property transfer tax

Property transfer tax

Stamp Duty and Asset Transfer Tax, better known as the ITP, is a tax on asset transfers for consideration, corporate transactions and documented legal acts.

It is applied to purchases and rentals of homes and second-hand vehicles, and to capital increases and decreases for companies. Stamp duty is applied directly to the public property sale or mortgage deed.

Asset transfer tax for housing

Asset Transfer Tax for housing applies when a home is sold or rented. The person who acquires the use of the asset - i.e. the taxpayer - is obliged to pay the tax.

Where and when do you pay Asset Transfer Tax (ITP)?

ITP is a national tax that is applied in the autonomous communities. It must be paid at the tax office of the autonomous community. The period for payment is 30 days from the time that the property is bought or the right is signed.

How is Asset Transfer Tax (ITP) calculated?

ITP is calculated as follows:

The value of the asset transferred or the right conferred provides the tax base for the tax to be paid. Tax rates, deductions, credits and administration and settlement of the tax vary depending on the autonomous community.

What type of transactions does the Property Transfer Tax (ITP) apply to?

  • Asset transfers for consideration
    When buying a house, ITP is paid on sales of existing properties between individuals. Such sales are taxed at between 4% and 10%, depending on the autonomous community and the deductions that apply.
  • Corporate transactions
    It applies to the constitution, capital increases and decreases, mergers, spin-offs and dissolution of companies. In such transactions, the tax is approximately 1.
  • Stamp duty
    This relates to notary, commercial and administrative documents that are formalised in Spain, and those formalised abroad that take effect in Spain. This tax varies depending on the autonomous community, but is usually between 0.5% and 1.5%.

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