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Everything you need to know about stamp duty in Spain
Stamp duty, or AJD (Impuesto de Actos Jurídicos Documentados) in Spanish, is a compulsory tax when purchasing a property
When buying a property in Spain, purchasers must factor in a number of other costs and expenses, such additional mortage fees.
One of the taxes associated with the purchase and sale of a property in Spain is stamp duty, also known as AJD (Impuesto de Actos Jurídicos Documentados) in Spanish, that must be paid at the Treasury office of the Autonomous Region in which the property is located within 30 working days of the transaction being processed.
What exactly is stamp duty in Spain?
This tax is levied on the formalisation of certain transactions through public deeds (notarial documents), although it can also be levied on commercial and administrative documents.
With property sales, stamp duty is levied on both the deed of sale and the mortgage deed and usually equates to 1-1.5% of the purchase price, but may differ depending on the region.
Who must pay stamp duty in Spain?
"The taxpayer shall be the purchaser of the property or right and, failing that, the persons who request or apply for the notarial documents, or those in whose interest they are issued," according to Article 29 of the Law on Stamp Duty.
Prior to 2018, in the case of mortgage deeds, the purchaser was responsible for paying the tax. However, the Supreme Court amended the criteria five years ago, and now, the mortgage lender is responsible.
As of November 2018, Article 29 states: "In the case of deeds of loan with mortgage guarantee, the lender shall be considered the taxable person."
However, when it comes to the deed of sale, the taxable person is still the purchaser.
Stamp duty must be paid on new builds and pre-owned properties, although in the latter case, the purchase is subject to Transfer Tax (Impuesto de Transmisiones Patrimoniales, ITP), which is regulated by the same law. The fixed part of the AJD must also be paid.
How much stamp duty must be paid by Autonomous Community?
The amount of tax to be paid differs between different regions in Spain, with the highest percentage paid in Aragón, Valencia, Cantabria, Castilla y León, Castilla-La Mancha, Murcia, Galicia, Extremadura and Catalonia. The lowest AJD is find in Basque Country (0%), Navarre, Ceuta and Melilla.
The good news is that each autonomous community offers reductions and exemptions for people with disabilities, young people, taxpayers on low incomes, victims of gender violence or terrorism and those purchasing subsidised housing.
Here are the AJD rates by region as of April 2023:
- Andalusia: 1.2%
- Aragón: 1.5%
- Asturias: 1.2%
- Balearic Islands: 1.2%
- Community of Valenciana: 1.5%
- Canary Islands: 0.75%
- Cantabria: 1.5%
- Castile-LaMancha: 1.5%
- Castile-León: 1.5%
- Catalonia: 1.5%
- Ceuta: 0.5%
- Extremadura: 1.5%
- Galicia: 1.5%
- Community of Madrid: 0.75%
- Melilla: 0.5%
- Murcia: 1.5%
- Navarra: 0.5%
- Basque Country: 0%
Legal acts subject to stamp duty in Spain
Marriage, divorce, a rental agreement, contract of sale or the signing of a mortgage are examples of acts subject to stamp duty. A legal act is generally guided by a person entering into a specific legal relationship with another person or persons, which will create, modify or extinguish certain rights. The main types of acts that incur the tax are:
Notarial deeds
Notaries are basically the equivalent of a solicitor in the UK, and process wills, inheritances, donations, weddings, separations, divorces, marital contracts, deeds, powers of attorney, sales and purchases, declarations of new construction, mortgage loans, personal loans, incorporation of commercial companies, etc.
Commercial documents
These include bills of exchange or documents that perform a draft function or replace bills of exchange. Also subject to stamp duty are promissory notes, bonds, debentures and other similar securities issued in series, for a term not exceeding 18 months.
Administrative documents
In this case, the rehabilitation and transfer of greatness and titles of nobility are subject to this tax, along with preventive annotations made in public registers, when they have a valuable right. An example is a preventive annotation of seizure that is subject to tax when they are not ordered ex officio by the judicial authority.
Calculating stamp duty in Spain
The tax is split into two types of fee:
- Fixed fee: The fixed fee is paid for the matrices and copies of the deeds and notarial acts, as well as the testimonials. These documents are issued on stamped paper for around 0.30 euros per sheet or 0.15 per page, depending on notary and region.
- Variable fee: The variable fee is established for the first copies of deeds and notarial deeds when they have an amount or evaluable thing as their object, contain acts or contracts that can be registered in the Property Registries, Mercantile Registry and the Spanish Patent and Trademark Office and are not subject to Tax of Inheritance and Donations or to the concepts of Onerous Patrimonial Transfers or Corporate Operations of the Patrimonial Transfer Tax and Documented Legal Acts. In the case, for example, of property transfers that are taxed by VAT or registrable operations such as segregation, they are subject to the variable rate.
An example of calculating the rate applicable in the Community of Madrid (0.75%) for example, multiply this percentage by the percentage of the mortgage liability (0.0075 x 200,000 euros = 1,500 euros). The final amount must be paid as a variable quota.
Paying stamp duty in Spain
Form 600 from the Spanish Tax Office is required along with a certified copy of the notarial document that is the source of the tax, as well as a photocopy of the same document. These must be presented at the Tax Office of the autonomous community where the property is located and paid within 30 working days from the execution of the public deed.
As mentioned, regulations may differ between autonomous communities, so always check in advance.
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