Blogosfera Navas & Cusí

Our law firm Navas & Cusí with offices in Madrid and Barcelona has a multidisciplinary character and with an international vocation (based in Brussels), specializes in banking, financial and commercial law.
Contact us
To guarantee quality and personalized attention, we serve by prior appointment in person or by video conference. We don't work for results.


In this section of the Blog we will discuss a topic of great interest which has meant an incentive for real estate investment in Spain, with more emphasis on some of the Regions. We are talking about the reduced ITPO (Tax on Transfer of Assets), that could benefit both natural or legal persons who carry out a real estate activity where the General Accountign Plan for the real estate sector is applied, provided that a number of requirements are met. Let’s analyse this further.

What is ITPO Tax?

ITPO is an indirect tax that arises upon the sale of second-hand goods (properties in our case) and must be satisfied by the buyer at the time of purchase, increasing the cost of real estate operations significantly since it can not be recovered as it is the case for VAT. The aforementioned tax is managed by each Spanish Region (Comunidad Autónoma) and can be up to 10% of the real value of the purchase.


How did some of the Regions incentive the real estate market?

As a result of the severe real estate crisis, some Regions approved a number of tax incentives such as reduced bonuses or levies in the purchase of real estate properties in order to motivate professionals in the sector to continue investing. Real estate agents and owners would also be influenced in a positive way, closing operations in a faster and more efficient manner.

Andalusia is a good example to illustrate the case. In 2009, Junta de Andalucía (Government Body) approved a reduced ITP of 2%, through Legislative Decree 1/2009, when the general rate was 7%, provided that certain requirements were met and the property was sold within a maximum period of two years.

Although the intention was good, two years did not appear to be enough time to sell the purchased properties, considering the deep crisis suffered in the sector at the time. This motivated Junta de Andalucía to extend the maximum period for the resale of the property, from two to five years (law 8/2010, July 14).

Andalusia, however, is not the only region in Spain that has opted for this type of incentives; other communities have followed similar paths with good examples being Aragon, Murcia and Madrid.


What are the requirements for the Reduced ITP?

In order to apply this ITP modality, the following requirements must be met:

  • The natural or legal person who buys the property must carry out a business where the General Accounting Plan for the Real Estate Sector is applied.
  • The professional buying the property (whether natural or legal person) must incorporate the acquired asset into its current assets, i.e. must be available for sale. Therefore, the property will not be considered a “fixed asset” but a “current asset”.
  • The intention to incorporate the property as a “current asset” must be reflected in the transmission Deed.
  • The property must be sold within a maximum period of two years.


When is the General Accounting Plan for the real estate sector applied?

The adaptation to the General Accounting Plan for the real estate sector includes the following sections of the IAE (Impuesto de Actividades Económicas):

  • Group 883, Subgroup 833.2 for building development activities.
  • Group 861, Subgroup 861.1 for property rental activities.


What if any of the requirements are not met?

The decree establishes that, should any of the aforementioned requirements are not met, the real estate professional must satisfy the difference between the standard applicable ITP and the reduced rate that was paid at the time of purchase. The most common requiremet not being met is the impossibility to close the resale within the established period, although the extension from two to five years has diminished this risk in a significant manner.

Should you wish further information on the application of the reduced ITP and the fulfillment of the requirements, do not hesitate to contact Navas & Cusí Abogados at

Navas & Cusí Abogados

Navas & Cusí Abogados
Previous post Next post