Real Estate

Real Estate Transfer Tax (IMT)

IMT on shareholders’ entries consisting of real estate

IMT applies in case of shareholders’ entries consisting of real estate with the nature of supplementary capital entries in commercial companies, civil companies under commercial legal form or civil companies formally recognised as having legal personality.

Currently the law only foresees that IMT applies in case of shareholders’ entries consisting of real estate as a contribution to the capital of the entities concerned.
 

IMT on the allocation of real estate to shareholders

IMT shall be levied also in the case of allocation of real estate to the shareholders because of a capital reduction, a repayment of supplementary capital entries, as well as in case of fulfillment with other obligations assumed by commercial companies, civil companies under commercial legal form or civil companies with legal personality.

Currently, IMT is levied only in the  case of allocation of real estate to the shareholders because of a liquidation of the company.

IMT on the allocation of real estate to unitholders of investment funds

IMT shall be levied in the case of allocation of real estate to unitholders of private issued closed-end investment funds resulting from a redemption of units or a reduction of capital of said funds.

Currently, IMT is levied only in the case of allocation of real estate resulting from a liquidation of private issued closed-end investment funds.

IMT rate on the transfer of residential urban property

There is an adjustment by 1% of the brackets of the IMT rate applicable on the transfer of urban property, or its autonomous units, exclusively for residential use.

This amendment implies that IMT is due only in case the taxable basis exceeds EUR 93,331 (formerly, EUR 92,407), in respect of residential urban property for permanent abode.
 

IMT rate on the transfer of equivalent rights to the ownership right

IMT shall be levied on the total value of the real estate in proportion to the right transferred, in the case of transfer of equivalent rights to the ownership right or of the single ownership right excluding equivalent rights.

Currently, this rule applies only in the case of not all the ownership rights being transferred.

Exemption from IMT on the first transfer or rehabilitated real estate

The exemption from IMT no longer applies on the first transfer of rehabilitated real estate for rental either for residential use or for residential and permanent use (in the later case if the real estate is located in urban rehabilitation areas), if:

• The real estate is given a different use within six years following the transfer; or
• The real estate is not allocated to permanent above within six months following the transfer; or
• The real estate was not rented for residential use within one year following the transfer.

In case said exemption does not apply, the taxpayer should require the IMT assessment within 30 days through standard form “Modelo 1”.

Timesharing rights

IMT shall be levied on the higher of the value of the bare ownership or on the value of the act or the contract in the case of a transfer of ownership made separately from the time sharing rights.

In addition, in the case of waiving or transfer of the time sharing right, IMT shall be levied on the higher of the current value of said right or the value of the act or contract. Former law was silent on these situations.