Which transactions are subject to the property transfer and stamp duty tax in Spain?
Property transfers, corporate transactions and stamp duties are subject to the property transfer and stamp duty tax (Impuesto de Transmisiones Patrimoniales y Actos Jurídicos Documentados – ITP / AJD). • Property transfers: this tax must be paid upon the purchase of estate to a private individual, establishing rights in rem (e.g. an usufruct), acquisition of a registered interest in property, etc. The transferee must pay the tax at a rate of 6% of the purchasing price; in case of purchase of Estate; or 4%, in case of purchase of movable or personal property, or 1% of the real value of the right set up.If you buy a second hand property and declare its value much lower than the approximate market value, the Spanish Tax inspectors could feel that the purchasing price is too low and you may be applied heavy penalties. Your Lawyer can help you in this matter by asking the tax office what is the market value of the property that you intend to buy. • Corporate transactions: Such as setting up
