If you are considering purchasing a second-hand home in Spain, the Transfer Tax (ITP) will be a key factor to consider. This tax varies depending on the autonomous community where the property is located, so it’s essential to know the applicable rate in each region. Here, we explain everything you need to know about the ITP in 2024 so you can accurately calculate the additional costs associated with buying your new property.
What is the Transfer Tax (ITP)?
The Transfer Tax (Impuesto de Transmisiones Patrimoniales) is levied on the transfer of goods and rights between individuals, such as the purchase of second-hand homes. This means that if you buy a used home, you will have to pay this tax. It also applies to the creation of real rights, loans, guarantees, leases, and other property transfers.
It is important to note that this tax does not apply if the sale is conducted by a business or professional in the course of their activity, as is the case with new-build purchases, which are subject to VAT instead of ITP.
How to Settle the ITP
After signing the purchase contract, you have 30 business days to settle the ITP. Depending on the autonomous community, this process can be done in person or online. We recommend checking the specific procedure in the region where you are buying the property to avoid any issues. Make sure you have all the necessary documentation and meet the established deadlines.
How Much ITP is Paid in 2024?
The ITP rate varies by autonomous community, which means that the location of the property is crucial in calculating the amount to be paid. Although there is a national framework that sets a general rate of 6%, most autonomous communities apply their own tax rates, which can range from 6% to 13%. The ITP is calculated by applying a percentage to the value of the property, which, in most cases, corresponds to the cadastral reference value.
Additionally, some regions offer reduced rates for specific cases, such as the purchase of a primary residence by young people, large families, or people with disabilities, among others.
ITP Rates by Autonomous Communities in 2024
Below is a breakdown of the general rates applicable in each autonomous community in 2024:
- Andalusia: 7%
- Aragón: 8-10% (depending on the value of the property)
- Asturias: 8-10%
- Balearic Islands: 8-13%
- Canary Islands: 6.5%
- Cantabria: 9%
- Castilla-La Mancha: 9%
- Castilla y León: 8-10%
- Catalonia: 10-11%
- Ceuta and Melilla: 6%
- Community of Madrid: 6%
- Valencian Community: 10-11%
- Extremadura: 8-11%
- Galicia: 8%
- La Rioja: 7%
- Murcia: 8%
- Navarra: 6%
- Basque Country: 7%
Reduced Rates and Tax Breaks
Some regions offer reduced rates and tax breaks on the ITP if you meet certain requirements, such as purchasing a primary residence, being under a certain age, or buying subsidized housing. For example, in Andalusia, the rate drops to 6% if the property is valued under €150,000 and to 3.5% for homes intended for social policies. In Aragón, large families can benefit from a 50% or even 60% reduction in rural areas.
In Asturias, if you buy a home in rural areas or those at risk of depopulation, you can get a reduction of up to 4% if the property is valued below €150,000. In Catalonia, people under 32 years old, large families, and those with disabilities can also benefit from reductions ranging from 5% to 7%.
How to Qualify for a Reduced ITP Rate
To qualify for a reduced ITP rate, you must meet the specific requirements of each autonomous community. Some of the most common criteria include being under a certain age, purchasing officially protected housing, or having a recognized disability. If you meet the conditions, you can significantly reduce the cost of this tax when buying your home.
The Transfer Tax is an important factor when purchasing a second-hand home in Spain. Tax rates vary significantly between autonomous communities, so it’s crucial to know the applicable rate based on the property’s location. Additionally, don’t forget that you might be eligible for reductions or tax breaks depending on your personal situation and the type of property you are buying.
If you are looking to purchase a property in Sitges, at Dust and Sand Luxury Homes, we help you not only find the perfect home but also understand all the tax aspects related to your purchase so that the experience is as smooth as possible.
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