Who must pay AJD in real estate sales subject to VAT and mortgage loans

Determining who must bear the cost of the Transfer Tax and Documented Legal Acts Tax (ITPAJD) is a critical point in home acquisition operations. A recent binding ruling from the General Directorate of Taxes (DGT) has clarified the application of this tax when the main transaction is subject to VAT.

What the DGT has resolved

The DGT has clarified that, when the sale of a property is subject to Value Added Tax (VAT), the transfer tax modality does not apply. Instead, the Documented Legal Acts (AJD) modality must be applied. In this scenario, the taxable person for the tax is the acquirer of the property.

Regarding the creation of the mortgage loan linked to said purchase, the tax authority points out that, since the operation is subject to VAT, the Documented Legal Acts modality also applies. However, in this specific case, the taxable person for the tax is the credit institution (the lender) and not the client.

What this means for you

If you are an individual acquiring a new home or one from a developer subject to VAT, you must take into account that your tax responsibility is divided as follows:

• In the sale: You are the taxable person and must pay the AJD corresponding to the transfer of the property.
• In the mortgage: Although the tax is generated by the creation of the loan, the obligation to be the taxable person falls on the financial institution.

This distinction is fundamental for the correct settlement of costs associated with the acquisition of a property and to avoid errors in the allocation of expenses in the public deed.

What is advisable to do

It is always necessary to verify the fiscal nature of the real estate operation before signing. If the operation is subject to VAT, the AJD tax structure changes compared to second-hand homes (subject to ITP). It is recommended to analyze the technical and fiscal documentation of the property to ensure that the settlement of taxes is carried out in accordance with the TRLITPAJD regulations.