In Catalonia, several amendments have recently been approved concerning the Transfer Tax and Stamp Duty (“ITPAJD”), particularly about real estate transactions. These changes are highly relevant from a business perspective.
Regarding the Transfer Tax (TPO modality):
1. A new tax rate of 20% is established (as opposed to the current 10%) for property acquisitions carried out by large property holders.
*A “large property holder” shall be understood as any individual or legal entity that owns more than 10 urban residential properties under general circumstances, or properties with a built surface area exceeding 1,500 m². In the case of properties located in stressed areas, the ownership of 5 or more urban residential properties will suffice for such classification. Storage rooms and warehouses are excluded for these purposes.
2. The same 20% tax rate shall apply to the purchase of entire buildings.
*Unless the purchaser is a natural person, the building comprises no more than four housing units, or the purchase is intended as the primary residence of the buyer and their family.
3. The general tax rate is increased to 13%.
*Up until now, the general rate was 10% for the portion of the property value up to €1,000,000, and 11% for the excess amount. The revised scale will apply as follows:
| Total value of the property from (euros) | Full fee (euros) | Remaining value up to (euros) | Applicable rate (%) |
|---|---|---|---|
| 0,00 | 0,00 | 600.000,00 | 10 |
| 600.000,00 | 60.000,00 | 300.000,00 | 11 |
| 900.000,00 | 93.000,00 | 600.000,00 | 12 |
| 1.500.000,00 | 165.000,00 | Hereinafter | 13 |
4. A new 50% tax relief is introduced for the purchase of real estate intended to serve as a company’s corporate headquarters or workplace, subject to specific conditions.
Regarding the Stamp Duty (AJD modality), the tax rate is increased to 3.5% in cases where the VAT exemption is waived.
This applies to second transfers of properties where the seller is subject to VAT and the buyer is entitled to full or partial deduction of the input VAT. In these scenarios, parties usually opt for the VAT exemption because it is fiscally more efficient to pay VAT rather than Transfer Tax.
However, under the new rules, such transactions become more expensive due to the increase in the AJD rate, which was previously 2.5%.
These new tax rates will come into effect on 27 June 2025.
Another major change involves the abolition of the 70% Transfer Tax relief (TPO modality) previously granted to real estate companies. This change came into force on 25 March 2025.
This relief was previously applied when:
- The acquired property was recorded as current assets to sell, and
- The company’s main business activity consisted of property development, building construction, and real estate trading, and
- The subsequent sale was made to another company meeting the same requirements, or to an individual acquiring the property for residential use, within three years from the date of acquisition.
The Decree-Law came into effect on 25 March 2025, but it is subject to ratification by the Catalan Parliament within 30 days. Should ratification not occur, the Decree-Law will cease to be effective; however, the provisions already in force will remain applicable until the official publication of its non-ratification in the Official Gazette (DOG).
On 16 April, the Council of Statutory Guarantees issued an opinion on the matter at the request of Junts and recommended processing them as a draft law because it does not see that there are extraordinary and urgent needs that justify their approval by decree. This opinion is not binding, but the government has said it will study it, so it remains to be seen whether it has any effect on the final processing of the measures approved by decree law.
These legislative changes will have significant implications for real estate transactions going forward and are expected to substantial impact on the Catalan real estate sector, potentially hindering or even preventing certain investment operations in the region.
If you believe these measures may affect you, please do not hesitate to contact us. At GM Tax Consultancy, we are available to assist you in planning your operations effectively.
