What is ITP?
The Property Transfer Tax is an indirect tax levied on all transfers of movable or immovable property between individuals. For example, the purchase of a car, a plot of land, a building site or a home.
It is important to take this expense into account when assessing your budget when buying a home. However, as it varies from one autonomous community to another and there are discounts in some cases, it is best to consult an expert.
The ITP is applied to the reference value of the property , which is a value that the General Directorate of Cadastre assigns to the property. However, if the purchase price is higher than the reference value, the ITP is applied to the purchase price.
How much is paid in ITP when buying a flat?
The ITP varies depending on the Autonomous Community , so there is no general one throughout Spain. You can check it on the official website of the communities, but below we break down the general ITP for each Autonomous Community:
- Andalusia : 7%
- Aragon : 8%
- Asturias: 8%
- Balearic Islands : 8%
- Canary Islands : 6.5%
- Cantabria : 10%
- Castile and Leon : 8%
- Castile-La Mancha : 9%
- Catalonia : 10%
- Valencian Community : 10%
- Extremadura : 8%
- Galicia : 8%
- Madrid: 6%
- Murcia : 8%
- Navarre : 6%
- Basque Country : 4%
- La Rioja : 7%
- Ceuta : 6%
- Melilla : 6%
Who pays for it?
The ITP may raise doubts as to whether the person obliged to pay it is the buyer or the seller. However, the Law on Property Transfer Tax and Documented Legal Acts makes it clear that the taxpayer (the person who must face the tax obligation) is the natural person or legal entity that acquires the asset .
To be clear, the person responsible for paying the Property Transfer Tax (ITP) is always the purchasing party because they are the ones who experience the increase in assets.
The amount to be paid for the ITP is calculated taking into account two aspects: the taxable base and the rate. The taxable base corresponds to the real value of the property and the rate is the percentage of the taxable base to be paid. The rate varies depending on the taxable base and the autonomous community in which the sale is made.
