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V0653-15 23 February 2015 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
ITPAJD · explotación prioritaria

AJD exemption for agricultural mortgage loans requires allocation to improvement plans

A farmer inquired whether the purchase of non-subsidised land could be considered part of an improvement plan to qualify for the Stamp Duty (AJD) exemption. The DGT ruled that the exemption requires the loan to be allocated to improvement plans that meet the technical and economic requirements set out in Royal Decree 613/2001.

The question raised

Whether, in accordance with the regulation of the exemption set forth in Article 8 of Law 19/1995 and the definition given to the concept of an Improvement Plan by paragraph 9 of Article 2 of Royal Decree 613/2001, of June 8, for the improvement and modernization of the production structures of agricultural holdings, any demonstrable investment, such as the purchase of land, which is currently not subsidized by regional regulations (and, therefore, has not been aided by a subsidy), is considered an Improvement Plan (i.e., a non-aidable Improvement Plan) and, consequently, the proportional part that such investments represent within the amount of the mortgage would be exempt from the tax on documented legal acts and notary documents.

The DGT's ruling

To apply the exemption provided in Article 8 of Law 19/1995 to mortgage loans, three conditions must be met: that the deed documents the establishment, modification, or cancellation of loans subject to VAT; that they are granted to holders of priority holdings or those who achieve such status through acquisitions; and that the loans are intended for the implementation of improvement plans. These improvement plans must comply with the technical and economic justification requirements set forth in Annex II of Royal Decree 613/2001.

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