Property Transfer Tax (ITP) in Spain

The Property Transfer Tax (ITP) is one of the key taxes when purchasing a second-hand property in Spain. Unlike VAT, which applies to new-build homes, the ITP is levied on the transfer of ownership between private individuals.

Understanding how it works is essential to plan your total purchase cost and avoid tax issues. This guide explains the legal framework, regional rates, reductions and how to calculate and pay it correctly.

The ITP is a regional tax applied when purchasing a second-hand property in Spain. It is charged on the real value of the property and collected by each autonomous region.

The buyer is responsible for filing and paying the tax within the legal deadline. Rates vary between 6 % and 10 %, depending on the region.

The ITP is regulated by Royal Legislative Decree 1/1993, which approved the Consolidated Law on the Property Transfer and Stamp Duty Tax (ITP-AJD), together with its Implementing Regulation (Royal Decree 828/1995).

Each autonomous community has competence to set its own tax rates and exemptions, so the final amount can vary significantly depending on where the property is located.

The general ITP rate ranges from 6 % to 10 % of the declared price. Some regions apply lower rates for first residences or specific groups:

• Andalusia: 7 % flat rate.
• Valencian Community: 10 % general rate; 8 % for main home purchases meeting requirements.
• Madrid: 6 % flat rate.
• Catalonia: 10 % general; reductions for young buyers and large families.
• Baleares (Islands): progressive scale 8 % – 11 %.
• Galicia: 9 % with reductions for main residences.

Each autonomous community may grant reductions or special rates depending on the buyer’s situation or the intended use of the property. The most common cases include:

• Main residence: reduced rate if the property will be used as the buyer’s permanent home.
• Young buyers and large families: reductions based on age, household income or number of children.
• Disability: tax benefits recognised by several regions for buyers with certified disabilities.
• Subsidised or renovated housing: specific incentives for officially protected or fully refurbished homes.

To claim these benefits, the buyer must prove eligibility and attach the required documents when submitting the self-assessment form.

The taxable base is the real market value of the property, normally the price stated in the deed. However, many regions apply a cadastral reference value or official tables to prevent undervaluation.

The tax is declared using a regional form (commonly form 600) and must be filed with the local tax office within 30 working days after signing the public deed before the notary.

Payment can be made online or through authorised banks. Once paid, the buyer must present the stamped form together with the deed at the Land Registry to register ownership.

Although both taxes apply to property transactions, their scope and taxpayers differ:

• ITP: applies to resale properties purchased from private individuals.
• VAT: applies to new-build properties sold directly by the developer or builder.
• VAT rate: 10 % general / 4 % for officially protected housing.
• ITP rate: 6 % to 10 %, depending on the region.

• Check the reference cadastral value before filing; declaring less may trigger a complementary assessment.
• Keep the payment receipt and stamped form; both are required for registration.
• When there are several buyers, specify each one’s ownership percentage (50/50, 60/40, etc.).
• Do not confuse the ITP with the municipal capital gains tax, which is paid by the seller.
• Consult a specialised tax adviser before signing to confirm the applicable rate and possible reductions.