# Property purchase tax in Spain? Or ITP



## jmhalton (Apr 4, 2008)

I understand that this was increased to 8% in July 2010 at time when the whole Property market remains quite depressed and banks will not issue mortgages.

However, since I paid 7% ITP to purchase my prime home property in 2004, now being well over 65 yrs of age. What's the situation should I wish to sell up and purchase another Spanish prime home property. Do I have to pay another ITP, this time 8% or do I get a concession as with Capital Gains tax?

Nb ...ITP is Ipuesto de Transmisiones, a bit like VAT. John


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## gus-lopez (Jan 4, 2010)

jmhalton said:


> I understand that this was increased to 8% in July 2010 at time when the whole Property market remains quite depressed and banks will not issue mortgages.
> 
> However, since I paid 7% ITP to purchase my prime home property in 2004, now being well over 65 yrs of age. What's the situation should I wish to sell up and purchase another Spanish prime home property. Do I have to pay another ITP, this time 8% or do I get a concession as with Capital Gains tax?
> 
> Nb ...ITP is Ipuesto de Transmisiones, a bit like VAT. John


Unfortunately it's a simple answer, no you don't . If you sell & being over 65 + owning the property for more than 3 years ( I believe ) & it's your main residence,then there's no Cgt but if you buy again it's another 8% Itp.


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## Beachcomber (May 10, 2009)

http://www.juntadeandalucia.es/haci...cios/normativa/leyes/2010/2010_01-9_marzo.pdfTransfer tax is 7% up to €400.000 and 8% on the balance above €400.000. 

If you are a fiscal resident under 35 years of age or disabled it is 3,5%


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## Stravinsky (Aug 12, 2007)

Beachcomber said:


> http://www.juntadeandalucia.es/haci...cios/normativa/leyes/2010/2010_01-9_marzo.pdfTransfer tax is 7% up to €400.000 and 8% on the balance above €400.000.
> 
> If you are a fiscal resident under 35 years of age or disabled it is 3,5%


Fiscal resident .... he heh, that should catch a few people out


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## 90199 (Mar 21, 2010)

Stravinsky said:


> Fiscal resident .... he heh, that should catch a few people out



Go on then, tell us ignorant sods what it is

Hepa


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## Beachcomber (May 10, 2009)

Fiscal residency is something you need to prove if you wish to carry out any kind of fiscal transaction as a resident as in the case of not having to have a retention of 3% of the purchase price withheld and paid to AEAT on account of your capital gains tax liability when selling a property, claiming exemption from the payment of CGT when you are over 65 years of age or claiming certain generous allowances in inheritance taxes on the death of a co-owner of a property.

One of the prime requirements of being able to obtain the certificate is the fact that you have been making resident tax declarations. Without this certificate you will be treated as a non-resident for tax purposes. The green piece of paper you get from the police is something different and doesn't count.


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## Stravinsky (Aug 12, 2007)

Its like I keep telling people, make a tax return in Spain every year ..... even if it is a nil declaration.


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## jmhalton (Apr 4, 2008)

That's all useful info thank you. I have heard also that even if you are classed as a Fiscal Resident, and have sold your spanish main residence, you must then retain your Spanish Tax residency for at least 6 months after selling otherwise you could be classed as a non-resident and charged 18 percent tax on the sale. For example, having purchased a property in the UK and already changed your tax status to the UK.


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## Beachcomber (May 10, 2009)

Who did you hear this from? It is incorrect. You do not cancel fiscal residency. The certificate of fiscal residency expires of its own accord.

The capital gains tax on the sale is 19% regardless of whether you are a resident or a non-resident. The difference is that as a non-resident there is a retention of 3% on the escritura value of the transfer on account of your capital gains tax liability. You then make a capital gains tax declaration and either claim back some or all of the retention or pay the balance if the actual gain is more than 3%. However, AEAT will not make any refund if you have not been paying your annual non-resident income tax declared on form 210.

If you are a fiscal resident at the time of the sale you must, even if you then return to the UK, submit a tax declaration for the fiscal year in which you sold the property. Remember that AEAT now have a reciprocal arrangement with HMRC to pursue tax debtors in the United Kingdom. However, as Gus Lopez said, if you are over 65 years of age, are a fiscal resident and have owned the property as a primary residence for at least three years you are exempt from CGT.


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## Beachcomber (May 10, 2009)

That should say 19% but it seems to have become garbled . It went up from 18% earlier in the year.


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## Beachcomber (May 10, 2009)

One other point about this (I am sure there are many more) is that lawyers will often tell a client that it is not worth claiming the retention back as it is never paid. This is not true. AEAT is obliged to make the refund within six months otherwise they have to pay interest on the amount claimed. This applies unless there is a flaw in the application which has to be corrected.

The only circumstance in which they will not repay a properly presented claim is if the claimant has not been paying his non-resident income tax. 

Lawyers will tell the client that it is not worth it either because they cannot be bothered or they have no idea how to do it.

I reiterate what I said in a previous post that it is imperative that the seller of a property pays any difference in the case that the 3% retention does not cover the actual amount of the capital gains tax otherwise they will pursue him for the payment in his home country if it is one with which Spain has a reciprocal agreement.


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## jmhalton (Apr 4, 2008)

Thanks for the info...it's a complicated subject and little is written about liability when selling. The advice given to me was from a qualified Spanish solicitor but whilst trying to be helpful is clearly not familiar with this process especially since age and term of occupation matters in my case.


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## jmhalton (Apr 4, 2008)

Thanks for your information Beachcomer. It seems to me that my local (english speaking) spanish qualified solicitor was only trying to be helpful. Probably not her specialism dealing in property matters. However, what you say seems to make good sense and I shall make a point of returning the information to her with a few more questions...


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