What is ITP?
The Property Transfer Tax Impuesto de Transmisiones Patrimoniales, ITP is applied when buying a property on the secondary market. This regional tax rate is determined by the autonomous community where the property is located. It also applies to certain transactions, such as rentals, loans, pledges, and property rights.
How to Pay the Tax?
The buyer has 30 working days from the date of signing the purchase agreement to submit a declaration and pay the tax. Depending on the region, the process can be completed through online platforms or at local tax offices. It is recommended to confirm the list of required documents in advance.
ITP Calculation in 2025
ITP is calculated as a percentage of the cadastral value of the property. While the minimum rate by state standards is 6%, most autonomous communities set their own rates, which can reach up to 13%. Note that in some cases, benefits may be available.
ITP Rates in Different Regions of Spain
- Andalusia: 7% (6% for properties worth up to €150,000).
- Catalonia: 10% (11% for properties over €1 million).
- Madrid: 6% (4% for large families).
- Balearic Islands: 8%-13% depending on the property value.
- Valencia: 10% (11% for properties over €1 million).
- Canary Islands: 6.5% (5% for the first property worth up to €150,000).
Regions with high depopulation levels (e.g., parts of Galicia, Castilla y León) may have reduced rates.
Examples of Benefits
For young buyers: In some regions, the rate is reduced to 3-4% for individuals under 36 years old.
Large families and persons with disabilities: Reduced rates of up to 3% are provided.
First-time property purchase: For certain categories of residents, ITP can be as low as 2%.
How to Reduce Tax Burden?
To take advantage of benefits, you must provide documentary evidence of eligibility, such as a certificate for large families, income statements, or documents proving disability status. Conditions and requirements differ by region, so it’s essential to clarify information before buying.
Conclusion
Understanding the taxation system and ITP rates is an essential step when purchasing property in Spain. This allows for accurate cost estimation and potential cost reduction.
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