Note

AJD stamp duty on new builds in Spain

§ 1What AJD is

AJD is the tax on documented legal acts, and the part that concerns a buyer is the tax on the notarial deed. The national law subjects first copies of notarial deeds that have a valuable object, contain acts that can be registered and are not subject to inheritance and gift tax or to the main transfer tax. A first sale of a new home, which carries VAT, is documented in such a deed, which is why AJD appears on a new-build purchase. The chapter on the whole subject is the chapter on new-build taxes.

§ 2How the rate is set

The tax is charged at the rate set by the region. If a region has not set one, the national default of 0.50% applies. In practice, regions have set their own rates, which differ, and some have reduced rates for a habitual home. The rates we have verified are collected in the regional AJD rates.

§ 3How the base is set

The base is the declared value of the deed, and for real estate it cannot be lower than the official value set in the law. The deed of a new home states a price, and VAT is added to that price. Whether the base includes the VAT, and how the official value interacts with the price, are questions for the calculation, so ask your adviser for the AJD figure on your deed. Do not apply the rate to the price and call it a result.

§ 4AJD beside VAT

On a new home, the buyer meets both taxes. The tax agency explains that a first sale of new housing carries VAT, at 10% for housing, and the deed tax is added. A resale has no VAT, and its main tax is the regional transfer tax, which is why the comparison between a new build and a resale needs both taxes on each side. That comparison is the subject of new build versus resale tax.

§ 5Reduced rates

Regions use AJD, as they use the transfer tax, to help particular buyers. A reduced rate for a habitual home usually depends on the age or family of the buyer, income limits and the use of the home. The conditions are set by each region. A buyer who misses one condition pays the general rate, and in some regions must pay the difference with interest if the home does not become the main residence.

§ 6What to ask the developer

Ask the developer, in writing, to state the rate of VAT and AJD that it expects to apply, the base on which it calculates them and who pays each. Ask when payment is due. Compare the answers with the rules on this page and with your adviser's figure. A developer that states a rate without a base has not given you enough to budget with.

§ 7The Canary Islands

In the Canary Islands, the indirect tax on a new home is IGIC and not VAT, and the stamp duty rules are those of the Canarian law. The Canary Islands' indirect tax explains what we have verified there and what we have not.

§ 8Keep the paperwork

Keep the deed, the invoice and the proof of payment of each tax. The tax authority of the region can ask you to show how the base was set, and a buyer who sells later may be asked for the same papers by the next buyer's adviser.

Tax note. Rates depend on the region, the type of property and the buyer, and they change. Figures here are dated and sourced; examples are illustrative and show their assumptions. Confirm yours with the regional tax agency or a tax adviser.