ITP Tax on Buying Second-Hand Property: How Much Do You Pay?

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Buying a second-hand property in Spain is a major financial and personal milestone, but the excitement of the purchase is often dampened by the complexity of the associated taxes. Unlike new-build properties, which are subject to Impuesto sobre el Valor Añadido (IVA - Value Added Tax), transactions involving pre-owned properties are taxed under the Impuesto sobre Transmisiones Patrimoniales (ITP - Property Transfer Tax). This is a tax devolved to the Comunidades Autónomas (Autonomous Communities/regions) and can vary drastically depending on the location of the property. Understanding how this tax works, its tax rates, available relief, and the tax authority's new valuation criteria is essential to avoid financial surprises and administrative penalties that could compromise your investment.

What is the ITP and why does it apply to second-hand homes?

The Impuesto sobre Transmisiones Patrimoniales y Actos Jurídicos Documentados (ITPAJD - Property Transfer and Documented Legal Acts Tax), specifically under its category of Transmisiones Patrimoniales Onerosas (TPO - Onerous Property Transfers), is the tax levied on transfers of assets that are already part of an individual's private estate. Its national regulatory framework is governed by Real Decreto Legislativo 1/1993, de 24 de septiembre, por el que se aprueba el Texto Refundido de la Ley del Impuesto sobre Transmisiones Patrimoniales y Actos Jurídicos Documentados (Royal Legislative Decree 1/1993, of September 24).

Unlike what happens when buying a new home — where the buyer pays 10% IVA (or 4% if it is a vivienda de protección oficial [VPO - officially protected social housing] under a special regime) to the developer —, transactions between private individuals are not subject to IVA. Instead, the buyer must pay the ITP to the tax authority of the Autonomous Community where the property is located, regardless of where the buyer resides or where the public deed is signed before a notario (notary). The sujeto pasivo (taxpayer) liable by law for the payment is always the acquirer (the buyer), as established by Article 8 of the aforementioned regulatory law.

The Catastro Reference Value: The new taxable base

Since January 1, 2022, the rules of the game for calculating ITP changed substantially with the entry into force of Ley 11/2021, de medidas de prevención y lucha contra el fraude fiscal (Law 11/2021 on measures to prevent and combat tax fraud). Previously, the tax was calculated on the real value of the sale (the price agreed between the parties), unless the tax authority proved that the market value was higher through a value verification process.

Today, the taxable base for ITP is determined by the Valor de Referencia del Catastro (Catastro Reference Value), except in very specific cases:

• If the purchase price is higher than the Reference Value: Tax will be paid on the purchase price (the taxable base will always be the higher of the two figures).
• If the Reference Value is higher than the purchase price: Tax must obligatorily be paid on the Catastro Reference Value, unless the buyer challenges this value by proving that the property has defects or a poor state of conservation that justifies a lower value.
• If the property does not have an assigned Reference Value: The taxable base will be the market value or the deed price, whichever is higher.

This Reference Value is determined annually by the Dirección General del Catastro (Directorate General of the Cadastre) by analyzing the prices of all property sales carried out before a notary in each area. Therefore, it does not take into account the interior renovation state of the specific property, but rather macroeconomic and location parameters.

How much ITP do you pay? Tax rates by Autonomous Community

Since the ITP is a tax devolved to the Autonomous Communities, each region has the authority to set its own general tax rate, as well as to establish reduced rates for certain groups. The general rate in Spain currently ranges between 4% and 11%.

Below are the general rates applicable in the different Autonomous Communities for the current year:

• *Basque Country (País Vasco): 4% (the lowest rate in Spain, with 2.5%* for a primary residence under certain size limits).
• *Community of Madrid (Comunidad de Madrid): 6%* (flat general rate).
• *Navarre (Navarra): 6%* (general rate, with reductions for large families).
• *Canary Islands (Canarias): 6.5%* (with a progressive scale on some islands).
• La Rioja: 7% (general rate).
• *Aragon (Aragón): 8%* (with increased rates for luxury homes).
• Asturias: Progressive scale from 8% to 10% depending on the property value.
• *Castile and León (Castilla y León): 8%* (general rate).
• Castilla-La Mancha: 9% (general rate).
• *Andalusia (Andalucía): 7%* (recently simplified flat general rate).
• Galicia: 8% (general rate).
• *Murcia Region (Región de Murcia): 8%* (general rate).
• *Balearic Islands (Islas Baleares): Progressive scale from 8% to 13% (the latter for properties worth over 2,000,000 €*).
• *Catalonia (Cataluña): 10% (general rate for properties up to 1,000,000 €, and 11%* on the amount exceeding that figure).
• *Valencian Community (Comunidad Valenciana): 10% (general rate, with an 11%* scale for high-value properties).
• Extremadura: Progressive scale from 8% to 11%.
• Cantabria: Progressive scale from 8% to 10%.
• Ceuta and Melilla: 6% (with a 50% state tax credit on the liability if you reside there, resulting in an effective rate of 3%).

Reduced rates for vulnerable or specific groups

Most Autonomous Communities provide reduced ITP rates (which usually range between 1.2% and 5%) to encourage access to housing for certain sectors of the population. The groups that can usually benefit from these reductions are:

1. Young buyers under 30, 32, or 35 years old (depending on the region) who acquire their primary residence, often conditional on their annual income not exceeding a set limit.
2. *Large families (familias numerosas) or single-parent families*, provided the acquired property is their primary residence.
3. People with disabilities (usually with a certified degree of disability equal to or greater than 33% or 65%).
4. *Buyers of officially protected housing (Viviendas de Protección Oficial - VPO)*.
5. Properties located in municipalities at risk of depopulation (rural areas or "empty Spain").

Practical examples of calculating ITP

To understand the real impact of this tax on your purchase budget, we will analyze two scenarios with different geographical locations and buyer conditions.

Example 1: General property purchase in Catalonia

Carlos buys a second-hand apartment in Barcelona for a price of 250,000 €. After checking the Catastro Electronic Office, he finds that the Reference Value of the property is 210,000 €.

• Taxable base: Since the purchase price (250,000 €) is higher than the Reference Value (210,000 €), the law requires tax to be paid on the sale price.
• Applicable tax rate: In Catalonia, the general ITP rate is 10%.
• Calculation: 250,000 € x 10% = 25,000 €.
• Result: Carlos must pay 25,000 € in ITP.

Example 2: Purchase with a reduced rate for young buyers in Andalusia

Sofía, aged 32, buys her first primary residence in Seville for 130,000 €. The Catastro Reference Value matches the purchase price. Her annual income is below 25,000 €.

• Taxable base: 130,000 €.
• Applicable tax rate: Andalusia offers a reduced rate of 3.5% for buyers under 35 years old who acquire their primary residence for a value under 150,000 € (and meet income limits).
• Calculation: 130,000 € x 3.5% = 4,550 €.
• Result: Sofía will pay 4,550 € instead of the 9,100 € she would have to pay under the general rate of 7%, saving 4,550 €.

Step-by-step practical steps to pay the ITP

The self-assessment and payment of the ITP is the direct responsibility of the buyer. The process must be carried out following these strict steps:

1. Obtain the necessary documentation: You will need the simple copy (copia simple) of the Public Purchase Deed issued by the notary, the Documento Nacional de Identidad (DNI - National Identity Document) or NIE (foreigner tax identification number) of the buyer and seller, and the proof of the Catastro Reference Value.
2. *Complete Form 600 (Modelo 600):* This is the official form for the self-assessment of the Property Transfer Tax. It can be filled out online through the Electronic Office of the Tax Agency of the corresponding Autonomous Community or purchased physically at their local offices.
3. Calculate the tax liability: Enter the taxable base (the higher value between the deed price and the reference value) and apply the tax rate (general or reduced if you meet the documented requirements).
4. Make the payment: Payment can be made via an online payment gateway using a digital certificate, or by printing the payment document and going to a collaborating bank.
5. Submit the self-assessment: Once paid, you must submit Modelo 600 along with the copia simple of the deed to the office of the corresponding regional Tax Agency (in person or online). This step is essential to obtain the submission stamp, without which the Registro de la Propiedad (Property Registry) will not register the property in your name.

Submission deadline

The deadline to self-assess and submit the ITP is 30 business days (in some Autonomous Communities, such as Catalonia or the Canary Islands, the deadline is one calendar month) starting from the day after the signing of the public purchase deed.

Errors you must avoid when paying ITP

• Ignoring the Catastro Reference Value: Declaring only the purchase price if it is lower than the Catastro Reference Value will almost automatically trigger a provisional assessment proposal from the regional tax authority, demanding the difference plus late-payment interest and potential penalties.
• Missing the submission deadline: Submitting Modelo 600 outside the 30 business day deadline leads to late-filing surcharges ranging from 1% to 15% (plus interest if the delay exceeds 12 months), even if you make the submission voluntarily without a prior notification from the Administration.
• Applying reduced rates without strictly meeting the requirements: Self-assessing the tax with a reduced rate (for example, for a large family or disability) without having the official certificate in force on the tax accrual date will result in a tax adjustment and penalties of up to 50% of the unpaid tax amount.
• Not keeping supporting documentation: You must keep the stamped Modelo 600 and the bank payment receipt for at least 4 years (the statute of limitations for the tax), as the administration can request a review of the self-assessment at any time within this period.

Frequently Asked Questions (FAQ)

What happens if the actual sale price of the house is lower than the Catastro Reference Value?

By law, you are obliged to pay tax on the Catastro Reference Value even if you paid less for the property. However, you can pay the tax based on the Reference Value and, immediately afterwards, submit a request for rectification of the self-assessment to the regional tax authority, providing expert evidence (photographs, renovation quotes, technical reports) proving that the real value of the property is lower due to its physical state of conservation or structural defects.

Do resident and non-resident foreigners pay the same ITP?

Yes. The ITP does not discriminate based on the nationality or tax residence of the buyer. The only thing that determines the tax and the applicable rate is the physical location of the property within Spanish territory. A foreign buyer will pay exactly the same percentage of ITP as a Spanish citizen in the same Autonomous Community.

Can the ITP be financed with a mortgage?

Generally, banks grant mortgage financing for a maximum of 80% of the appraisal value or the purchase price of the property. This means that the purchase costs, including the ITP (which usually represents between 6% and 11% of the price), must be provided by the buyer from their own savings (the so-called "20% down payment + 10% closing costs").

Who pays the ITP if there are multiple buyers?

If a property is acquired by several people (for example, a couple at 50% each), the tax is accrued on a joint-ownership (proindiviso) basis. A single Modelo 600 must be submitted identifying all acquirers as taxpayers, or an individual Modelo 600 must be submitted for each buyer, with each paying the proportional share of the tax corresponding to their acquisition percentage.

In summary

• The ITP is the tax levied on the purchase of second-hand homes and must always be paid by the buyer.
• The taxable base is calculated on the higher value between the deeded purchase price and the Catastro Reference Value.
• General tax rates vary by Autonomous Community, ranging between 4% and 11%.
• There are significant reduced rates for young people, large families, people with disabilities, and buyers of low-cost primary residences.
• The strict deadline to pay and submit Modelo 600 is 30 business days (or one month, depending on the region) from the signing of the deed.
• Failing to pay on time or applying deductions without meeting the legal requirements leads to surcharges and penalties from the tax authority.

General legal information, not personalised legal advice. For your specific situation, ask your question for free at AbogadoAI — answers grounded in Spanish law (BOE), in English.

This is general information, not legal advice. Verify on the BOE or consult a lawyer for your specific case.