INCREASED PROPERTY TRANSFER TAX RATE TO 20% FOR CERTAIN HOME PURCHASES IN CATALONIA

The Catalan Tax Agency has issued a resolution (number 3/2025) through its Directorate General for Taxation, clarifying some interpretative doubts regarding the recently introduced 20% Property Transfer Tax (Impuesto sobre Transmisiones Patrimoniales, TPO) on housing acquisitions by large holders, as well as on the purchase of entire residential buildings.

Firstly, it should be noted that the clarifications regarding who is to be considered a large holder are limited to the field of taxation, i.e. determining who is a large holder for the purposes of Property Transfer Tax. They do not apply to other legal purposes (e.g. determining whether the Generalitat has pre-emptive acquisition rights in the sale of houses by large holders), which will require clarification through case law or legislative amendments.

The resolution clarifies the following criteria:

1.- In relation to the purchase of real estate by large property holders.

• A large holder is someone who owns at least 10 residential properties in Catalonia.

  
  

• A large holder is also who owns at least 5 residential properties in stressed areas in Catalonia (in practice, almost all of Catalonia has been declared a stressed area, so in general terms we should assume that the ownership of 5 residential properties in Catalonia already entails the condition of large holder).

  
  

• A large holder is also a person who owns a total built-up area of 1.500 m2 of residential property.

  
  

• Garages and storage rooms are not included in the calculation.

  
  

• Important new feature: the main residence does not count as a large holder.

  
  

• Each dwelling of which you own 100% counts as a residential dwelling.

  
  

• If you do not own 100% of 5 residential dwellings, you must count the residential square metres you own until you reach the aforementioned 1.500 m2, although only taking the corresponding proportional part of each dwelling of the percentage you own.

  
  

• The purchase of a principal residence is excluded from the 20% rate, even if you are a large holder.

  
  

• In cases of consolidation of full ownership due to the extinction of usufructs constituted in purchase and sale transactions prior to the introduction of the increased rate (20%), if the purchaser is a large holder, he must also be taxed at 20%.

2.- In relation to the purchase of entire residential buildings.

• If the building is purchased gradually, in several phases, in the last of the purchases the tax paid for the lower rates in the previous acquisitions will have to be regularised at 20%, plus interest for late payment. However, this regularisation will only take place for previous partial transfers made after 27th June 2025.

  
  

• The purchase by individuals of buildings of up to 4 dwellings is excluded from taxation at 20%, provided that they are all intended for their habitual residence, and for their relatives up to the second degree. In order for it to be their habitual residence, they must move there within one year and remain there for at least three years (except in certain life circumstances determined by law which require a change of residence).

  
  

• Dwellings are counted as effective residential units, even if they are not divided horizontally and are registered as a single property.

  
  

• Single-family dwellings do not fall into the category of ‘residential buildings’ and are not taxed at 20%.

  
  

• If, in addition to the dwellings, the building has other uses (such as business premises or offices), it does not lose its status as a residential building, but, of the total purchase value, only the part equivalent to the dwellings, plus the proportional share of the dwellings in the common elements, will be taxed at 20%.

If you wish to learn more about any of the new aspects, please contact our office.

Balagué-Sala Lawyers