Impuesto de transmisiones patrimoniales en Barcelona o ITP

Are you looking for information about transfer tax in Barcelona or ITP?

You know the rule of thumb: when buying property in Barcelona, factor in between 11-15% on top of the sale price for taxes, costs and fees. But where does most of the money go? Most likely, you’ll be setting aside a sizable amount on top of your dream property’s purchase price to liquidate the property transfer tax.

You’ll be paying the transfer tax whether you pay for the property with or without a mortgage.

Which brings us to the next question: what is the transfer tax of a property in Barcelona?

Whether you are looking to sell your flat in Barcelona or buy a property, read on to find out everything you need to know.

What is the transfer tax?

Spain’s property transfer tax is known as the Impuesto de Transmisiones Patrimoniales (ITP for short).

Since the tax only applies to a used property, it’s better translated as the ‘transfer tax on retail property’. First-time buyers of new build properties will need to pay VAT on top of the sale price, and not the ITP.

However, ‘transfer tax on retail property’ does not capture the full scope of the ITP. You might pay ITP in a range of scenarios:

– Buying a car

– Renting a property

– When increasing or reducing a registered company’s capital

Since we’re concerned with the purchase of used property here, we will call it the ‘transfer tax’.

In Spain, the buyer pays the property transfer tax.

Spain’s national government sets the standard tax rate at 7% – but each of the 17 autonomous communities are free to raise this rate by passing their own tax laws.

This is the case with the Barcelona transfer tax.

How much is the transfer tax on resale properties in Barcelona?

Barcelona is the capital city and most populated of the four provinces in the autonomous community of Cataluña.

When buying property in Barcelona, you pay the same transfer tax as you would in any other part of Cataluña.

How much is the transfer tax on resale properties in Cataluña?

In 2013, the Cataluña transfer tax rate rose from 8% to 10%.

This is the highest transfer tax rate in all of Spain, and shared with Cantabria, the Valencian Community and Galicia.

According to the website of the Generalitat de Cataluña, the transfer tax is 10% for any property with a value up to €1 million. Any property purchase price over €1 million will require the buyer to pay 11% transfer tax to the Catalan government.

Are there exemptions from paying the transfer tax?

There are no exemptions to paying the transfer tax on resale properties in Barcelona.

However, there are possible reductions in the tax rate:

– If the property is under official protection, the tax rate falls to 7%.

– If the buyer is 32 years old or less, and their most recent tax return declared an annual gross income below €30,000, the tax rate falls to 5%.

– If the buyer has a family of three or more children, and they plan to make the property their primary residence, the tax rate falls to 5%.

– If the buyer has a disability above a degree of 65%, and they plan to make the property their primary residence, the tax rate falls to 5%.

Where do you pay the property transfer tax in Barcelona?

An official guide to the transfer tax in Cataluña explains that the transfer tax can be paid online or in person via the Modelo 600 form.

– If you wish to pay online, you can find the forms, instructions and means of submitting documents on the website of the Agencia Tributaria de Cataluña (Cataluña Tax Agency).

– If you wish to pay in person, you can visit any one of the offices of the Agencia Tributaria de Cataluña (Cataluña Tax Agency).

Bear in mind you have just 30 days after signing the contract of sale (escritura de compraventa) to pay the transfer tax.

Since you voluntarily present a form to pay the tax, many ask the question ‘what happens if I don’t pay the transfer tax?’

According to the Catalan Government, you will be charged an additional 1% on top of the tax you owe if you pay up to a month late. If you pay over 12 months late, the interest rate rises to as high as 15%.

You can also split the payment of the transfer tax in up to three annual payments. To do this, you will need to fulfill requirements such as the property being your primary residence, no more than 120m2 in size, and with collateral guarantee if the amount payable exceeds €30,000.

How to calculate the transfer tax on a Barcelona property

The transfer tax when buying a property in Barcelona is 10% for any property sold for under €1 million.

For example, if you buy a property for €500,000 you will pay a transfer tax of €50,000.

The transfer tax for a property bought anywhere in Cataluña rises to 11% for any property sold for over €1 million.

For example, if you buy a property for €2.5 million you will pay a transfer tax of €275,000.

What documents do I need to pay the transfer tax?

An official guide to the transfer tax in Cataluña explains you need to submit the following documents alongside the Modelo 600 form:

– Photocopy of the DNI, TIE card or NIE of the buyer.

– The contract of sale, signed by a notary when you bought the property (or a judicial or administrative resolution or private document which legally grants you the ownership of the property). If you are presenting the Model 600 in person, take the original document and it will be returned immediately.

– A copia simple of the contract of sale.

– Justification and evidence that you fulfill the requirements for a reduction in the transfer tax .

Contact BCN Advisors for any questions you may have on Property Transfer Tax.

Transfer tax on resale property in Barcelona