Are you going to buy or sell a home and you don’t know who pays the ITP? The property transfer tax and documented legal acts (ITP-AJD) is a tribute that has several modalities. This is assigned to the autonomous communities, so the amount paid in each place may be different. In this post we are going to analyze
who pays the property transfer tax.
Modalities of the Property Transfer Tax and Documented Legal Acts (ITP-AJD)
As we have mentioned in the previous section, the tax on property transfers and documented legal acts has three modalities:
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Company operations. The constitution or dissolution of mercantile companies are taxed by this modality. As well as the modification of the social capital, the social contributions that do not modify the social capital and the importation of non-EU companies.
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Documented legal acts. This modality taxes notarial documents (deeds of sale, for example), commercial and administrative documents.
–
Onerous asset transfers. Certainly, this modality is incompatible with VAT. The ITP will be paid in the case of second and subsequent deliveries of buildings (purchase and sale of second-hand homes).
In the case of the latter modality, three requirements must be met:
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That a property is transferred, for example, a sale, an exchange, an auction or a compulsory purchase.
–
That the transmission takes place between living people and that there is a price or consideration. If the transmission occurs as a result of the death of a person, we will be facing an inheritance taxed by inheritance tax. If a good is delivered without consideration, we will be facing a donation, taxed by the donation tax.
–
That what is transferred are assets belonging to the patrimony of individuals or legal entities, for example, real estate: land, apartments, buildings, commercial premises, industrial warehouses or offices, among others.
Who pays the property transfer tax?
As a general rule,
the person obligated to pay is the person who receives an increase in assets with the operation, according to the regulation of article 9 of the Law on Property Transfer Tax and Documented Legal Acts. For example:
– In a sale of a home, the
buyer.
– For a sale of a vehicle, also the
buyer.
– In domain files, records of notoriety, complementary records of public documents and administrative certifications mentioned in article 206 of the Mortgage Law,
the person who promotes them , and in recognitions of domain made in favor of a specific person, the latter.
– When it comes to the constitution of sureties, the
secured creditor.
– In the constitution of leases, the
lessee.
– For the constitution of pensions, the
pensioner.
– In the administrative concession, the
concessionaire; inacts and administrative contracts similar to the concession, the
beneficiary.
– If it is the case of the constitution of real rights such as usufruct, use or habitation, for example, the payment will correspond
to whoever benefits from the constitution of said real right.
– In the case of a loan, to the
borrower.
If it is the case of a
mortgage or mortgage loan, there is an exception to the rule, since the party obligated to pay will be the
lending bank.
It is important, in the case of a sale before a notary, to speak with the notary to make sure that they will carry out all the procedures related to the payment of the ITP through an agency that you will have to contract, since, otherwise, they will have to be done the one obligated to pay.
Subsidiary responsible for the payment of the tax
Along with all of the above, we must remember that
they will be secondarily responsible for paying the tax, according to article 9 of the ITP Law:
– If it is a loan constitution: the
lender if he receives all or part of the interest or the capital or the thing lent, without having demanded justification from the borrower of having paid the ITP.
– In the case of the constitution of leases, the
landlord if he receives the first rent payment and does not require the tenant to justify having paid the ITP.
– The
official who authorizes the change of taxpayer of any state, regional or local tax, when the change involves a transmission taxed by the ITP and the official does not previously require proof of payment of the tax.
What happens in cases of renouncing the VAT exemption?
It may happen that,
even if it is a second delivery that, in principle, would be taxed by ITP, if certain requirements are met, it would be taxed by VAT. In these cases, what is called waiving the exemption from
VAT is produced and is taxed by VAT. This is favorable for employers because they can deduct it totally or partially.
In order for the VAT exemption waiver to be applied, the following
requirements must be met:
– The acquirer (buyer) must justify that he is a VAT taxpayer in the exercise of his activity. Also, that he has the right to the total or partial deduction of the VAT paid for the acquisition of real estate.
– The transferor (
seller), must notify in a reliable way to the buyer before or during the sale, the waiver of the VAT exemption. Generally, the resignation is included in the public deed of
purchase-sale.
If the purchaser is a natural person who is not a businesswoman, the waiver of the VAT exemption cannot be applied and must be paid by ITP.
How and when is the ITP paid?
The ITP payment is made through
models 621, 600, 620 and 630. Certainly these of They must be presented at the Treasury Delegation of the corresponding Autonomous Community or through the Internet. The
term to pay the tax is 30 days from the time the taxable transaction was carried out. However, it has a
prescription period of four years.
In the case of Catalonia
We must remember that the
type of ITP applied in each autonomous community is different. In the case of Catalonia, the general rate is 10%, which is applied to the total value of the property if it is less than 1,000,000 euros. If the value of the property is greater than said amount, 10% will be applied up to 1,000,000 euros and 11% on the rest of the value.
On the other hand, if there is a transfer of an officially protected home in Catalonia, the rate that is applied is 7%, and if a habitual residence of a person with a disability, a large or single-parent family or a young minor is transferred. 32 years old, the rate applied is 5%. On the
web page of the Tax Agency of Catalonia you have information on all types according to the transmission that is made.
Therefore, as a general rule, if you buy a flat in Barcelona for a price of 200,000 euros, you must pay 2,000 euros of ITP.
In any case, the parties must be informed about the taxes that are levied on the sale. If it is a second transmission and they wish to waive the VAT exemption, it is important that an expert tax advisor analyze the situation. Thus, you can verify whether or not all the requirements are met for said exemption to be made.
