What is AJD and who pays it?

AJD versus ITP

When transferring a used home between private individuals, the standard tax is the autonomous community's Property Transfer Tax (ITP). For the first completion of a new build, VAT applies and, where applicable, AJD on the deed. Confusing these two taxes when budgeting for a purchase is a common mistake.

For indicative rates by region, check how much ITP is and cross-reference regional regulations with the transaction date.

AJD on mortgages

Royal Decree-Law 17/2018 effectively transferred the cost of AJD on many mortgages to the lender (bank) rather than the borrowing consumer, for acts following its entry into force. If your transaction involves a loan, request a breakdown of the FEIN and FiAE in accordance with Law 5/2019.

Who pays each invoice

The law specifies taxpayers, but in contracts the parties allocate notary fees, registry fees and taxes. What is valid is what has been clearly agreed without unfair consumer terms. In property sales, the buyer usually bears the acquisition ITP/AJD because they benefit from the registration in their favour, unless agreed otherwise.

Taxable base and reference value

Following recent reforms, the Cadastre reference value can act as a minimum baseline across several taxes. Even if you negotiate a lower price, the tax assessment may be adjusted. Read Cadastre reference value.

New builds: VAT + AJD

In new developments, the developer charges VAT within the price; the buyer may incur AJD or other costs depending on the documented act. Request a proforma invoice from the developer and an agency simulation before reserving.

Purchase budget

• ITP or VAT+AJD depending on the property type.
• Notary and land registry (allocation subject to agreement).
• Administrative agency, mortgage valuation if applicable.
• Insurance and financial products only if accepted on an informed basis.

The guide how much money do I need saved to buy a home fits these concepts into your savings plan.

Regional tax allowances

Some autonomous communities offer AJD or ITP tax relief for large families, young people or main residences under their own regulations. Check whether this applies on the completion date; relief measures change with regional budgets.

Mortgage subrogation

When taking over an existing loan (subrogation), documented acts distinct from a new mortgage may arise. Request a breakdown from both the transferring and receiving banks.

Land registry

After paying taxes, the administrative agency submits the settlement to the land registry. Delays in self-assessment delay registration and key handover if the seller makes completion conditional on registration.

Comparing total purchase costs

Use official calculators or administrative agency simulators for the specific autonomous community. Comparing only the ITP rate between Madrid and Valencia without factoring in AJD, notary fees and registry costs distorts decisions regarding neighbourhoods or cities.

Administrative agency: online submission

In many autonomous communities, tax assessment is submitted online using an official tax form. Errors in tax category (ITP vs AJD) lead to rejections and delays.

Property purchases with and without a mortgage

Budget for both scenarios: cash purchase involves only ITP/notary fees; purchasing with a loan adds mortgage documented acts subject to different rules since 2018.

ITP on special transactions

Transfers of bare ownership, separate parking spaces or commercial premises may attract a different rate under regional regulations. Ask for the exact tax category during your cost simulation.

Budgeting before viewing flats

Knowing the approximate level of ITP/AJD in your autonomous community helps filter out unrealistic listings. Link this with how much money do I need saved to incorporate tax into your price ceiling.

Notary: itemised invoice

Request an itemised invoice separating professional fees from taxes paid on the client's behalf. This makes it easier to claim any applicable tax allowances.

Renovation and extension of used homes

If you purchase to renovate, ITP is calculated on the current transfer value; subsequent work does not replace that initial payment. Budget for renovations separately from purchase taxes.

Mortgage connections

If comparing banks, examine the mortgage AJD item separately from the interest rate. Law 5/2019 mandates clear disclosure of the total credit cost.

Next step

Request an itemised calculation for the autonomous community where you are buying before committing deposit funds. If financing, compare offers based on total cost, not just interest rates.

Property buyer's agent (PSI) service and mortgage credit intermediaries when you need to compare financing options.

Informational content only. Please verify TRLITPAJD, regional regulations and Law 5/2019 for transactions involving a mortgage.