Which transactions are subject to the property transfer and stamp duty tax?
Payment schedule
Which transactions are subject to the property transfer and stamp duty tax?
Property transfers, corporate transactions and stamp duties are subject to the property transfer and stamp duty tax (Impuesto de Transmisiones Patrimoniales y Actos Jurídicos Documentados – ITP / AJD).
- Property transfers: this tax must be paid upon purchase of estate to a private individual, establishing rights in rem (e.g. an usufruct), acquisition of a registered interest in property, etc.The transferee shall pay the tax at a rate of 6% of the purchasing price; in case of purchase of Estate; or 4%, in case of purchase of movable or personal property, or 1% of the real value of the right set up.If you buy a second hand property and declare its value much lower than the approximate market value, the Spanish Tax inspectors could feel that the purchasing price is too low and you may be applied heavy penalties. Your Lawyer can help you in this matter by asking the tax office what is the market value of the property that you intend to buy.
- Corporate transactions: Such as setting up a business, business merger, share capital increase or decrease etc…The corporate shall pay this tax, except when increasing or decreasing share capital, in which case the shareholders must pay this tax.The rate tax will be 0.5 % of the capital increased, share capital of the newly society…
- Stamp duty: The tax shall be paid upon signature of a public deed, of notarial documents, registry office documents…The rate applicable differs from one case to another.
Tax schedule
This tax shall be paid at the Treasury office (Delegación de Hacienda) of the corresponding Community within 30 working days after signature of the deed or the contract.
It is suggested that all technical and legal matters pertaining to taxes be referred to a Spanish Lawyer for advice, guidance and execution
