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ITP: the transfer tax on resale homes

ITP (Impuesto sobre Transmisiones Patrimoniales) is the state tax, ceded to the autonomous communities, that the buyer of a resale home in Spain pays on the price in the deed or, if higher, on the Catastro reference value.

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What ITP is, who pays it and how it is calculated

ITP taxes transfers of property for consideration, including the purchase of a second-hand home (art. 7.1.A of the consolidated tax law, RDLeg 1/1993). It is a state tax ceded to the autonomous communities: each one sets its own rate, and rates vary from one to another (3% – 13%). Where there is no regional rate, in Ceuta and Melilla, the state rate applies with half of the tax relieved. In the Basque Country and Navarre the tax is governed by their own foral rules. Many regions have reduced rates for a main home, young buyers, large families or people with disabilities, always with conditions.

The buyer pays it, whatever the contract says (art. 8). The taxable base is the higher of two amounts: the price in the deed or the Catastro reference value (valor de referencia) on the date of purchase (art. 10.2, as worded by Law 11/2021).

It is self-assessed, usually with modelo 600 or your region's own form. Each region sets the deadline: one month in the Valencian Community, two months in Andalusia and, where there is no regional rule, 30 working days from signing (art. 102 of the Regulation, RD 828/1995). Without proof of payment, the deed cannot be entered in the Land Registry (art. 254 of the Mortgage Law). Work out the amount in the purchase costs calculator.

How to pay ITP step by step as a non-resident

  1. Get your NIE before completion: both the deed and the tax return require it.
  2. Look up the property's reference value on the Catastro e-office (Sede Electrónica del Catastro) and compare it with the price: ITP is charged on the higher one.
  3. Check the rate of the region where the home is located and whether you meet the conditions for any reduced rate.
  4. Sign the deed before the notary: the deadline runs from that date.
  5. File the return and pay, yourself or through a gestoría.
  6. Take the deed with the proof of payment to the Land Registry.

Common mistakes with ITP

  • Declaring a price below the reference value to pay less: the base never drops below that value, the tax office can issue a supplementary assessment and the Registry notes that the home is answerable for it for five years.
  • Counting the deadline from registration or key handover: it runs from signing the deed, and late filing brings surcharges and, after twelve months, interest too (LGT art. 27).
  • Assuming a reduced rate on a second home: almost all of them require it to be your main home or other personal conditions a non-resident buyer rarely meets.

ITP on new builds and on resale homes

A new home bought from the developer does not pay ITP: it is a first delivery subject to VAT (IVA) at 10%, and the deed also pays AJD (arts. 7.5 and 31.2 of the consolidated law). In the Canary Islands, IGIC at 7% replaces VAT. A resale home is exempt from VAT and therefore pays ITP (art. 20.Uno.22 of Law 37/1992).

If the developer used the home or let it without a purchase option for two years or more, the sale is no longer a first delivery and pays ITP, unless the tenant is the one buying. The developer can waive the exemption and charge VAT only when the buyer is a business entitled to deduct it (art. 20.Dos); a private buyer pays ITP. Compare developments in the new-build catalogue and the total cost of each option in the buying guide.

ITP: frequently asked questions

Can you challenge the reference value? Not on its own: only by asking for your self-assessment to be corrected once filed, or by appealing an assessment issued by the tax office (art. 10.3). The tax office decides on the basis of a binding report from the Catastro (art. 10.4).

What else does the buyer pay if the seller is a non-resident? ITP stays the same, but you must withhold part of the price on account of the seller's tax (IRNR) and, if the seller is an individual, pay the municipal capital gains tax on their behalf.

Sources and legal basis

Glossary of buying property in Spain

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