Stamp Duty taxation on deeds of notoriety for property registration

The Dirección General de Tributos (DGT) has issued a relevant ruling regarding the tax nature of deeds of notoriety used for the registration of real estate. This procedure is commonly used when a property is not registered in the Land Registry and ownership must be proven through this mechanism.

What the DGT has ruled

The central issue was to determine how a deed of notoriety should be taxed in these cases. According to the regulations of the Transfer Tax and Stamp Duty (ITPAJD), a deed of notoriety constitutes a documented legal act subject to taxation.

The ruling establishes that the obligation to pay Stamp Duty (AJD) on the deed of notoriety arises when it cannot be proven that the previous transfer that originated the ownership has already been taxed under the corresponding tax. In essence, the deed of notoriety is not a taxable event in itself for the transfer, but rather the document is subject to AJD taxation if the transfer of property has not been previously settled.

What this means for you

This pronouncement directly affects individuals who need to execute a deed of notoriety to register an inherited or acquired asset that does not appear in the Land Registry. If you find yourself in this situation, you must keep in mind that registration is not a process exempt from tax costs.

The key lies in the traceability of the property. If the transfer that grants you the right to the property has already fulfilled its tax obligations, the deed of notoriety will be limited to its status as a document. However, if there is a gap in proving the payment of the tax for the previous transfer, the deed of notoriety will trigger the obligation to settle the AJD.

What you should do

When faced with the need to register a property, it is necessary to verify the tax status of the transfers that led to the current ownership. It is fundamental to have documentation proving that the Transfer Tax (ITP) was correctly settled in the past. Each registration situation is specific, so it is recommended to assess the available documentation to determine the exact tax burden the procedure will entail.