Property Transfer Tax (ITP) is one of the most important taxes to consider when buying a second-hand home in Spain. This tax is levied on the transfer of used properties and other movable assets, and its amount depends on the autonomous community where the property is located, with rates that typically range between 6% and 13%. However, not all transactions are subject to this tax, and at Immosegur we want to explain who may be exempt and under what circumstances.
The Property Transfer Tax (ITP) is always the responsibility of the buyer and applies to most sales of resale properties. In contrast, the purchase of a new home is not subject to ITP, but rather to VAT. The applicable VAT rate is normally 10%, although for officially protected housing (VPO) or public development, it is reduced to 4%. This means that buyers of new builds or protected housing are automatically exempt from ITP, although they must meet the legal requirements to benefit from the reduced VAT rates.
Besides new or protected housing, there are other scenarios in which you can be exempt from ITP:
- Inheritances and donations: If the property is acquired through inheritance or donation, ITP does not apply. Instead, these transactions are taxed through Inheritance and Gift Tax, the cost of which depends on the degree of kinship with the donor and the regional regulations.
- Subsidized Housing (VPO): Properties classified as subsidized housing may be exempt from Property Transfer Tax (ITP), provided they meet the criteria regarding maximum surface area, price, and resale limitations established by regional regulations.
The deadline for settling the ITP, when applicable, is 30 business days from the signing of the purchase agreement. Payment must be made at the Tax Office corresponding to the autonomous community where the property is located. It is essential to meet these deadlines to avoid surcharges and penalties.
At Immosegur, we recommend that buyers carefully review each transaction and confirm whether they meet the requirements for an exemption. It is also important to be aware of any additional benefits that some autonomous communities offer to certain groups, such as young people, large families, or people with disabilities, which can further reduce the tax burden.
Knowing who is exempt from ITP not only represents considerable savings but also facilitates financial planning and streamlines the purchase process. Taking advantage of these exemptions allows you to optimize your investment in housing and ensures a safe, legal, and efficient transaction. Having expert advice is key to correctly identifying the situations in which the exemption applies and avoiding mistakes that could generate unnecessary costs.