Tax related to the purchase of a property in Spain

When purchasing a second-hand property in Spain, the buyer is required to pay the ITP or Property Transfer Tax at the time of the transaction at the notary. The ITP is a tax that varies depending on the Autonomous Community where the property is located, as it is assigned to them to decide the applicable rate.

For instance, in Catalonia, the ITP rate is 10% on the total value of the property if it is under 1,000,000 euros. However, if the value exceeds that amount, 10% will be applied on the first 1,000,000 euros, and 11% on the remaining value. For example, if the property value is 1,500,000€, the ITP would be calculated as follows: 1,000,000€ x 10% + 500,000€ x 11% = 155,000€.

It's important to note that to calculate the ITP, the cadastral reference value is considered instead of the effective price paid for the property. This value can be obtained through the cadastre website by providing the necessary information such as the property's cadastral reference and the buyer's ID. However, if the acquisition price is higher than the reference value, then that price will prevail for the ITP calculation.

Different rates may apply in specific cases such as the transfer of an officially protected home, where a 7% rate is applicable. Moreover, if the transfer involves a habitual residence of a person with a disability, a large or single-parent family, or a young person under 32 years old, the applicable rate will be 5%.