I’ve been looking at properties in Madrid recently, mainly resale homes, and trying to figure out the taxes involved has been a headache. Specifically, the Impuesto de Transmisiones Patrimoniales (ITP), commonly known as the property transfer tax, has rates that vary significantly from one autonomous community to another. I haven’t seen a dedicated post on the forums compiling this information, so I’m sharing my research to help others on their property-hunting journey.
What is ITP
Simply put, ITP is a tax you must pay to the regional tax agency when you purchase a resale property in Spain. Note: this tax applies only to resale properties! If you’re buying a new build, you’ll pay VAT (Value Added Tax), which is typically 10%. These are completely different concepts, so don’t get them mixed up.
Overview of ITP Rates by Autonomous Community
In Spain, ITP rates are set by each autonomous community, so the property transfer tax varies widely across the country. I’ve compiled the general tax rates for a few communities popular with the international community to make comparison easier. Keep in mind that many regions offer tax reductions for specific groups or for the purchase of lower-priced properties, which can be complex. For this guide, I am only listing the general rates for property conveyance.
| Autonomous Community | General ITP Rate |
|---|
| Madrid | 6% |
| Catalonia | 10% |
| Andalusia | 7% |
| Valencian Community | 10% |
| Canary Islands | 6.5% |
As you can see from the table, for a €500,000 property, you would pay €30,000 in ITP in Madrid, but €50,000 in Catalonia or the Valencian Community. That’s a difference of €20,000! This is a significant variation that directly impacts your total purchase budget. So when you’re considering properties in different regions, it’s crucial to factor in the Spanish property transfer rate.
This tax is typically declared and paid within 30 working days of signing the public deed of sale. Usually, your lawyer or gestoría will handle this for you, but it’s always good to be informed yourself. I hope this post helps clarify things and wish you all the best in finding your dream home! If there are any inaccuracies or if you have anything to add, please feel free to leave a comment and discuss below!
