What is AJD – Actos Juridicos Documentados -A general scope in Spain
AJD – Actos Jurídicos Documentados (Stamp Duty) in Property Transactions in Spain –
When engaging in property transactions in Spain, particularly in the context of purchasing, selling, or mortgaging real estate, it is crucial to understand the implications of the AJD (Actos Jurídicos Documentados) or Stamp Duty. This tax applies to various legal acts documented in notarial deeds, which can be registered in public records. The amount of AJD due varies depending on the type of legal act and the autonomous community in which the transaction takes place.
General Regime vs. Regional Regime
Before diving into the specifics of the AJD, it is essential to distinguish between the general regime applicable in common territory and the regional regimes that may apply in Spain’s autonomous communities. In the common regime, the AJD and other related taxes, such as the ITP (Impuesto sobre Transmisiones Patrimoniales), are transferred to the autonomous communities, meaning the specific rate and applicable regulations will vary depending on where the transaction is occurring.
Determining which regime applies is the first step in understanding your obligations under the AJD. Once it is clear that the common regime is applicable, the next step is to identify the autonomous community where the property transaction will take place, as each community sets its own AJD rates and may offer specific exemptions or bonuses.
When is AJD Applicable?
In real estate transactions, AJD is commonly applied in the following scenarios:
- Purchase of a New Construction Home: When you buy a newly constructed home, AJD applies to the notarial deed that documents the sale. This is distinct from the ITP, which typically applies to second-hand properties.
- Declarations of New Construction Works (Declaraciónes de Obra Nueva), Acts of Completion of Work (Acta Final de Obra), Horizontal Division (División Horizontal), and Other Notarial Acts Related to the Property: These legal acts, often associated with the completion or modification of real estate, are subject to AJD when they are documented in a notarial deed and registered in public records.
- Mortgage Credits and Other Notarial Acts: AJD also applies to the notarial documents that formalize mortgage loans and other related legal acts, such as the constitution or cancellation of real security rights (like mortgages). The tax is levied on notarial deeds, minutes, and other instruments that document these acts and contracts.
AJD Tax Rates Across Autonomous Communities
The AJD tax rate is not uniform across Spain; instead, it varies by autonomous community, each of which may set its own general rate and offer specific bonuses or reductions. Below is an overview of the general AJD rates and some notable regional benefits:
- Andalusia: The general rate is 1.2%. For first copies of deeds related to properties used as the buyer’s habitual residence and with a real value not exceeding €130,000, the rate remains 1.2%. However, there are reduced rates, such as 0.3% for acquisitions by individuals under 35, and 0.1% for disabled persons or large families purchasing homes valued up to €180,000.
- Aragon: Here, the general rate is set at 1.5%. There are significant discounts, including a 60% reduction for large families acquiring a habitual residence and a 30% reduction for individuals under 35, those with disabilities of 65% or more, or victims of gender violence, provided the property value does not exceed €100,000.
- Asturias: The general rate is 1.2%, with a special rate of 1.5% applicable to deeds that waive the VAT exemption. A reduced rate of 0.3% applies to acquisitions and mortgage loans for VPP (Vivienda de Protección Pública) housing by beneficiaries of public financial aid.
- Balearic Islands: The general AJD rate is 1.5%. A reduced rate of 0.5% applies to notarial documents for mortgage loans linked to acquiring the tax domicile of a newly created company.
- Canary Islands: The general rate is 0.75%, with the same rate applying to acquisitions or constitutions of mortgage loans for the habitual residence of large families, individuals under 35, or those with physical disabilities.
- Cantabria: The general rate is 1.5%, but there are reduced rates of 0.3% for people under 30, large families, or VPP home acquisitions, and 0.15% for people with disabilities or purchases of homes in depopulation risk areas.
- Castilla-La Mancha: The general rate stands at 1.25%, with a reduced rate of 0.75% for taxpayers under 36 purchasing homes worth no more than €180,000 that are officially protected.
- Castilla y León: The general rate is 1.5%, with a 0.5% rate for large families, individuals with significant disabilities, and those under 36 purchasing VPP homes. A minimal rate of 0.01% is available for young buyers in small municipalities.
- Catalonia: Catalonia applies a general rate of 1.5%, with reductions to 0.1% for the purchase of subsidized housing and 0.5% for young buyers or disabled individuals acquiring a habitual residence.
- Ceuta: The general rate is 0.5%, with a 50% bonus for properties located in Ceuta.
- Extremadura: The general rate is 1.5%, with a special rate of 2% for deeds waiving the VAT exemption and a reduced rate of 0.75% for habitual residences valued under €122,606.47. There is also a 0.10% rate for certain real security rights.
- Galicia: Galicia’s general rate is 1.5%, with reductions to 1% for families with moderate assets acquiring a habitual residence, and 0.5% for mortgage loans related to the habitual residence of disabled individuals, large families, and young buyers.
- La Rioja: The general rate is 1%, with a 0.5% rate for large families, young buyers, and those with modest incomes.
- Community of Madrid: Madrid applies a general rate of 0.75%, with varying rates of 0.4%, 0.5%, and 1% depending on the deeded amount and whether the housing has public protection.
- Melilla: The general rate is 0.5%, with a 50% discount for properties located in Melilla.
- Murcia: The general rate is 1.5%, with a special rate of 2% for deeds waiving the VAT exemption, and a 0.10% rate for young people under 35 formalizing the first transfer for mortgage loans up to €150,000.
- Navarra: Navarra applies a general rate of 0.5% but does not offer tax benefits to specific groups.
- Basque Country: The Basque Country exempts AJD for officially protected housing and public promotion, and the general effectively applying a 0.50% rate.
- Valencian Community: In the Valencian Community, the general rate is 1,5 %. However, there is a reduced rate of 0.1% for the acquisition of a habitual residence and the constitution of mortgage loans for habitual residences by large families or disabled individuals.
Specific Considerations and Exemptions
In addition to the general rates and bonuses listed above, each autonomous community may offer additional exemptions or special conditions for the AJD tax. For instance, certain regions may offer tax relief for properties purchased as part of public promotion schemes or for those rehabilitated in specific urban areas. Additionally, the availability of bonuses for young buyers, large families, and people with disabilities can significantly impact the overall tax burden.
It is also important to note that the AJD is typically paid by the buyer in a property transaction, although in the case of mortgages, the financial institution may be responsible for covering this tax under certain conditions, depending on recent legal reforms.
Importance of Professional Advice
Given the complexity and variability of AJD across Spain’s autonomous communities, it is highly recommended to seek professional legal advice when engaging in property transactions. A qualified legal professional or tax advisor can help you navigate the specific requirements of your region, identify potential tax savings, and ensure compliance with all applicable laws.
At TLACORP, we specialize in providing expert legal assistance tailored to the needs of property buyers and sellers across Spain. Our team is well-versed in the nuances of AJD and other related taxes, ensuring that you fully understand your obligations and can make informed decisions throughout the transaction process.
For more information or to discuss your specific needs, please contact our office. We are here to help you achieve a successful and legally sound property transaction.
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