What is the ITP tax?
ITP stands for Impuesto sobre Transmisiones Patrimoniales in spanish, it is, the Transfer Tax. This, is a tax levied on the purchase and sale and transfer of real estate, as well as on certain real right of enjoyment transactions, such as mortgages. It also applies to the acquisition of shares or holdings in companies, in certain cases.
Its purpose is to raise funds for the development of public policies and the financing of public services in the Valencian Community. It is a tax that contributes to the welfare of society and the economic development of the region.
When does ITP apply?
As mentioned above, ITP applies to the transfer of real estate, such as land, buildings, business premises and dwellings, among others. It also applies to the transfer of rights of enjoyment, such as mortgages, usufruct or use and occupancy.
Payment of the ITP in the Valencian Community
Who Has to Pay the ITP?
The ITP must be paid by the acquirer of the property, that is, the buyer (although in some cases the seller may assume part or all of the tax). It is important to note that the ITP is a tax applied to the transfer value of the property, so it is necessary to determine the real value of the property to pay the corresponding tax.
When is the ITP Paid?
When it comes to buying a home, one of the key questions is When is the ITP paid when buying a home?. The Property Transfer Tax (ITP) is a crucial tax in the process of acquiring second-hand real estate in Spain, and its payment is made within a specific timeframe.
The ITP must be paid within a specific period after the formalization of the purchase. This period is 30 business days from the date the property transaction is made. It is vital to emphasize that this period includes only business days, excluding weekends and holidays. It is crucial to comply with the established deadline for the payment of the ITP to avoid penalties or surcharges. Timeliness in this process is an essential aspect in the process of purchasing a second-hand home.
For example, if the purchase of a home is made on February 1, 2024, the deadline for the payment of the Property Transfer Tax (ITP) would be 30 business days from that date. Considering that business days exclude weekends and that according to the Spanish Tax Agency the counting begins on the day of the purchase, the deadline for making this payment would be March 13, 2024.
February 2024
| Monday | Tuesday | Wednesday | Thursday | Friday | Saturday | Sunday |
|---|---|---|---|---|---|---|
| 1 | 2 | 3 | 4 | |||
| 5 | 6 | 7 | 8 | 9 | 10 | 11 |
| 12 | 13 | 14 | 15 | 16 | 17 | 18 |
| 19 | 20 | 21 | 22 | 23 | 24 | 25 |
| 26 | 27 | 28 | 29 |
March 2024
| Monday | Tuesday | Wednesday | Thursday | Friday | Saturday | Sunday |
|---|---|---|---|---|---|---|
| 1 | 2 | 3 | ||||
| 4 | 5 | 6 | 7 | 8 | 9 | 10 |
| 11 | 12 | 13 | 14 | 15 | 16 | 17 |
| 18 | 19 | 20 | 21 | 22 | 23 | 24 |
| 25 | 26 | 27 | 28 |
| Business days of the ITP payment deadline | |
| Day of the property purchase |
ITP Payment Procedure
For purchasing a property in the Valencian Community, specifically in the province of Alicante, you will need to use the Model 600 for the payment of the Property Transfer Tax and Documented Legal Acts (ITP). This model is necessary for the self-assessment of the tax on onerous property transfers.
The process of payment and submission of this model can be carried out in several ways:
- Online: You can generate, pay, and submit the self-assessment using the assistance program available on the website of the Valencian Tax Agency. A digital certificate is essential to carry out this procedure.
- In-person: It is possible to generate the self-assessment with the assistance program and then pay the tax at a collaborating entity or Post Office. Subsequently, you must request an appointment to submit the self-assessment at the competent office.
To facilitate your tax procedures in the province of Alicante, here is a list of the main offices of the Tax Agency. These offices offer services such as the submission of declarations, information requests, and other tax procedures.
- Alicante/Alacant: Plaza de la Montañeta, 8, 03001. Tel: 96 514 97 00.
- Benidorm: Avenida Beniardá, 2, 03502. Tel: 96 586 04 11.
- Alcoi/Alcoy: Calle Diego Fernando Montañés, 14, 03801. Tel: 96 554 50 11.
- Denia: Calle Germans Maristes, 10, 03700. Tel: 96 578 81 11.
- Elche: Calle Mallorca, 2, 03203. Tel: 96 666 56 55.
- Elda: Calle Médico José Ferreira Quintana, 29, 03600. Tel: 96 539 21 11.
- Orihuela: Calle Obispo Rocamora, 49, 03300. Tel: 96 530 59 40.
- Villena: Calle Ferriz, 11, 03400. Tel: 96 580 03 62.
Remember to check the opening hours before visiting, as they may vary. For more information, visit the official page.
The necessary documentation includes, among others, the original and a copy of the document encompassing the taxable event and, in some cases, the cadastral certification corresponding to the year of transmission of the real estate.
Payment Methods
Generally, the payment of the ITP is made via bank transfer or account charge, although in some cases, and depending on the legislation of the autonomous community, cash payment may be allowed, subject to certain limits and conditions.
In situations where it is not possible to pay the ITP within the established deadline, taxpayers can request a deferment or installment plan of the payment. This request requires the submission of Model 600, along with Model 05, which corresponds to the request for deferment or installment. Each case will be individually evaluated by the Tax Agency, which will decide based on the circumstances of the applicant and the amount of the tax.
ITP tax rate in the Valencian Community
General tax rate of 10 %
The Transfer Tax (ITP) in the Valencian Community is one of the highest in Spain. The ITP tax rate varies depending on the transferable property and the type of transaction. In the case of the Valencian Community, the general tax rate for the sale and purchase of properties is 10 %.
Special tax rate of 11%
As of January 1, 2023, a special tax rate of 11% is established for acquisitions or the creation of real property rights (excluding security rights) whose value exceeds one million euros. For the application of this tax, purchases linked to the same registered property that are made from the same seller within a period of three years, counted from the date of each transaction, are considered as a single transaction for the purpose of calculating the tax.
Reduced tax rate of 8%
- Young people under 35 years of age, if it is the purchase of their first main residence and they do not exceed the income threshold for the previous period stipulated. In 2024, this threshold is €25,000 in individual taxation, or €40,000 in joint taxation.
- VPO - Vivienda de Protección Oficial (Social Housing) that will be the purchaser's first main residence.
Reduced tax rate of 4 %
There is a reduced tax rate of 4% for the following cases:
- Women victims of gender violence. The income limits are €30,000 for individual taxation or €47,000 for joint taxation.
- If it is a transfer of a VPO (Social Housing) in a special regime situation.
- If the home is the habitual residence of a large family and single parent in the general category. The income limits are €30,000 in individual taxation or €47,000 in joint taxation.
- If the home is the habitual residence of a large family and single parent of special category. The income limits are €35,000 in individual taxation or €58,000 in joint taxation.
- People who have a physical or sensory disability of 65 % or more.
- Persons with a mental disability of 33 % or more, only for the part of the property purchased by the purchaser.
- Real estate located in an area declared as an advanced industrial area, when a 50% rebate of the ICIO (tax on constructions, installations and works) has been previously approved by the town council. In addition, the following circumstances must be met:
- The property is to be the tax domicile or place of business of the purchaser's company and the public document formalising the acquisition expressly states that the property is to be used for the purchaser's business activity.
- That the purchaser maintains the exercise of the business activity and its tax domicile in the Autonomous Community where the property is located for at least 3 years, unless the purchaser dies within this period.
- During this 3-year period, the purchaser must not carry out any acts of deposition or corporate operations that may result in reducing the value of the acquisition, transferring the real estate, or transferring the real estate from the business activity or using it for purposes other than as the tax domicile or place of business.
- That, during this 3-year period, the net amount of the business activity does not exceed 10 million euros, in accordance with the terms of the LIS (Corporate Income Tax Act).
- From January 1, 2023, transfers of real estate intended to be the headquarters or workplace of companies or professional businesses with tax and social domicile in municipalities at risk of depopulation will be subject to certain conditions, provided that such companies or professional businesses meet the following requirements:
- Establish and maintain the social and tax domicile in one of the municipalities at risk of depopulation during the three years following the purchase.
- Carry out an economic activity within the three years following the acquisition, excluding the administration of movable or immovable property as the main activity.
- Hire and maintain at least one full-time employee registered in the general regime of Social Security during the three years following the acquisition.
Although these are the most general cases to obtain the reduced tax rate of 4% in the ITP in the Valencian Community, they are not the only ones and there are also some other exceptional cases, of which you can obtain more information through the website of the Generalitat Valenciana or in person at the competent public body of your locality.
