Understanding Stamp Duty in Spain

A Quick Guide from SGM Abogados

Are you planning to purchase property in Spain? Understanding the nuances of associated taxes, such as stamp duty, is crucial. At SGM Abogados, we’re here to guide you through these complexities to ensure a seamless transaction.

What is Stamp Duty in Spain? In Spain, stamp duty, known as AJD (Impuesto de Actos Jurídicos Documentados), is a tax levied on the documentation of legal acts, such as the purchase of property. This tax is applicable to transactions involving public deeds signed before a notary and other commercial or administrative documents.

When is Stamp Duty Paid? Stamp duty is specifically paid when purchasing a new-build property. For second-hand properties, you will instead pay a Transfer Tax, known as Impuesto de Transmisiones Patrimoniales (ITP).

Who Pays Stamp Duty? According to Article 29 of the Stamp Duty Law, the purchaser of the property is responsible for paying the stamp duty when involved in acquiring a new-build property.

How Much Will You Pay? The stamp duty rate varies between 1-1.5% of the property’s purchase price, depending on the region. For instance, regions like Aragón, Valencia, and Catalonia impose a 1.5% rate, whereas Madrid and the Canary Islands have lower rates of 0.75%.

Payment Process This tax must be paid within 30 working days from the date the deed is signed, through the local tax office using Form 600, along with a copy of the notarial document.

Other Instances Requiring Stamp Duty Apart from property purchases, stamp duty is also applicable to other notarial documents including wills, marriage contracts, and personal loans, with fixed fees per page of the document.

At SGM Abogados, we specialise in providing expert legal advice and support throughout your property purchase in Spain. Our team is dedicated to ensuring that all your tax obligations are handled efficiently and correctly. If you’re considering buying property in Spain you’ll need assistance with stamp duty and many other legal matters, please don’t hesitate to contact us for a chat and to see what we can offer you.