Contents
What ITP is and why it matters in the buying and selling of used cars
When ITP applies when selling a car (and when it doesn't)
Who pays ITP and how it is calculated
How to pay ITP: form 620, form 621 and deadlines
The role of the dealership in ITP transactions
Common dealership mistakes with ITP
Frequently asked questions
What is ITP and why it matters in the buying and selling of used cars
ITP (Property Transfer Tax) is a regional tax governed by the Royal Legislative Decree 1/1993 that levies the transfer of assets between private individuals when the transaction is not subject to VAT. In the case of vehicles, this means that whenever a private individual sells a used car to another private individual, the buyer must settle this tax before the ownership change can be processed at the DGT.
It is a tax devolved to the autonomous communities, which means that both the tax rate and the exemptions and procedures vary depending on the region where the buyer lives. Rates range from 4% to 8%, and some communities such as Catalonia exempt payment in certain cases.
For the dealership, ITP does not create a direct obligation in most of its sales (which are subject to VAT). But it does appear in day-to-day business: purchases from private individuals, part-exchanges, customers who need advice on the procedure. Understanding it properly makes the difference between closing a clean transaction and carrying documentation problems forward.
When ITP applies when selling a car (and when it doesn't)
The general rule is simple: if there is no VAT, there is ITP. Or put another way, VAT and ITP are mutually exclusive in the same transaction. You never pay both.
ITP applies when:
A private individual sells a used car to another private individual. There is no invoice with VAT, only a private sales contract.
There is no economic activity on the seller's part. If someone sells their personal car, the buyer pays ITP.
ITP does not apply when:
The seller is a dealership or professional business that issues an invoice with VAT, either under the general scheme (21%) or under the Special Scheme for Second-hand Goods (REBU). In both cases, the buyer is exempt from ITP.
It is an inheritance or a gift. In these cases, Inheritance and Gift Tax applies, not ITP.
The buyer is a businessperson who regularly buys and sells vehicles and acquires them for resale. This exemption is expressly set out in the regulations and is especially relevant for dealerships that buy stock from private individuals.
A case that causes doubts: part-exchanges. If a customer hands in their used car as part payment for another vehicle from the dealership, there are two simultaneous transactions. The dealership's sale to the customer is subject to VAT. The customer's car handed in to the dealership may be subject to ITP (if the dealership does not apply the resale exemption) or may be exempt if the dealership correctly documents that it acquires the vehicle for its commercial activity. The documentation here is what makes the difference.
Who pays ITP and how it is calculated
ITP is always paid by the buyer. No exceptions. The private seller has no obligation regarding this tax.
The taxable base is not necessarily the price shown in the sales contract. HMRC uses official vehicle valuation tables, published each year in the BOE by Ministerial Order (for 2026, Order HAC/1501/2025). These tables assign a tax value to each model according to make, version, engine capacity and power.
A depreciation coefficient is then applied to that table value depending on the age of the vehicle:
Up to 1 year: 100% of the value
1 to 2 years: 84%
2 to 3 years: 67%
3 to 4 years: 56%
4 to 5 years: 47%
5 to 6 years: 39%
6 to 7 years: 34%
7 to 8 years: 28%
8 to 9 years: 24%
9 to 10 years: 19%
10 to 11 years: 17%
11 to 12 years: 13%
More than 12 years: 10%
The final taxable base will be the higher of these two amounts: the depreciated tax value or the actual sale price declared in the contract. If a buyer pays 8,000 euros for a car whose depreciated tax value is 6,500 euros, they will be taxed on 8,000. If they pay 5,000 euros but the tax value says 6,500, they will be taxed on 6,500.
The tax rate depends on the buyer's autonomous community. These are the most relevant general rates:
Madrid: 4%
Andalusia: 4% (8% for cars and SUVs with more than 15 fiscal horsepower)
Catalonia: 5%. Exemption for vehicles more than 10 years old and with a value below 40,000 euros (except historic vehicles). In addition, since June 2025, vehicles with the zero-emission badge are taxed at 0%.
Valencian Community: 6%
Castile-La Mancha: 6%
Castile and León: 5% (8% for cars and SUVs with more than 15 fiscal horsepower)
Galicia: 8%
Asturias: 4% general (8% for cars and SUVs with more than 15 fiscal horsepower)
Cantabria: fixed amount according to engine capacity for most vehicles, 4% for the rest
Balearic Islands: 4% general (8% for cars and SUVs with more than 15 fiscal horsepower)
Canary Islands: 5.5%
Murcia: 4%
Navarre: 4%
Basque Country: varies according to the foral territory, generally 4%
A practical example. A buyer resident in the Valencian Community buys a 2020 Seat León 1.5 TSI from a private individual. HMRC's table value for that model is 18,000 euros. At 6 years old, a depreciation coefficient of 34% is applied, giving a tax value of 6,120 euros. The agreed price in the contract is 12,000 euros. Since the actual price (12,000) is higher than the tax value (6,120), the taxable base is 12,000 euros. At a rate of 6%, the ITP to be paid would be 720 euros.
Some communities also offer specific reliefs: large families, people with disabilities (33% or above), ECO or zero-emission vehicles, or historic vehicles. It is advisable to check the current regional regulations before paying.
How to pay ITP: form 620, form 621 and deadlines
The process has two parts: settle the tax with the regional tax authority and present the receipt at the DGT in order to complete the transfer.
Form 620 (in person): this is the traditional form. It is completed, paid at a collaborating bank and submitted to the tax office of the autonomous community. Some communities still use it as the main route.
Form 621 (online): the digital version, available on the electronic headquarters of most autonomous communities. It allows online payment by direct debit or card and provides the receipt immediately. It is the fastest route and the one most communities are promoting.
The choice between one and the other depends on the buyer's autonomous community. Some already require the online procedure, while others keep both options.
Documents needed to settle ITP:
Completed form 620 or 621
Sales contract signed by both parties
Copy of the vehicle registration certificate
Copy of the vehicle's technical data sheet
Buyer's ID card
The deadline for payment is 30 working days from the date the sales contract is signed. If this deadline is exceeded, the administration may apply surcharges (from 5% to 20% depending on the delay) and late-payment interest. In addition, without proof of ITP payment, the DGT will not process the change of ownership of the vehicle.
The role of the dealership in ITP transactions
Although the dealership is not liable for ITP on its sales (because it issues VAT invoices), it does become involved in several situations where this tax comes into play.
Purchases from private individuals. When a dealership buys a vehicle from a private individual to add to its stock, this transaction may be exempt from ITP if the dealership proves that it is acquiring it for resale within its ordinary business activity. To do this, it must document the transaction properly: sales contract, proof of payment, seller identification and entry in the purchase ledger. If you want to go further into how to declare these transactions correctly, we explain it in detail in the guide on how to declare the buying and selling of used vehicles in your dealership.
Part-exchanges (vehicle as part payment). If the customer hands in their used car as a deposit, the dealership must record this transaction separately. The value of the part-exchange must be documented in the contract and, if it is later resold, it must be justifiable to the tax office. The relationship between REBU and ITP in these transactions requires attention: if the car was bought from a private individual, the dealership can apply REBU when reselling it, and the original transaction is exempt from ITP. To find out when to apply each scheme, see our guide on when to use a VAT invoice and when to use REBU.
Intermediation between private individuals. If the dealership acts as an intermediary between two private individuals without actually buying the vehicle, it must make it very clear in the documentation that it is not the seller. Otherwise, it could take on tax liabilities that do not belong to it. In these transactions, the buyer will still have to settle the ITP.
Customer advice. In all sales where the dealership issues a VAT invoice (or REBU invoice), it is advisable to inform the customer that they do not have to pay ITP. This avoids confusion, especially with buyers who come from previous experiences with private sellers and assume that the tax always has to be settled. If the customer later resells that car to another private individual, then ITP will apply.
Common dealership mistakes with ITP
Not informing the customer about the tax regime for the transaction. When a buyer is not clear whether they have to pay ITP or whether they are already covered by the invoice's VAT, later claims can arise. Always make this clear at the time of sale, especially if you work with REBU, where VAT is not itemised and may cause confusion.
Not documenting purchases from private individuals properly. If the dealership buys a car from a private individual and does not keep the signed contract, proof of payment and seller identification, it loses the basis for relying on the ITP resale exemption and also complicates the subsequent application of REBU. To avoid documentation problems, review the mandatory documentation in the sale of second-hand cars.
Confusing REBU with a total exemption from tax obligations. REBU exempts the buyer from paying ITP, but it creates its own obligations for the dealership: register of transactions, legal wording on the invoice, correct margin calculation. Applying it incorrectly can lead to penalties. If you have doubts about the most common mistakes with this scheme, see our article on the common mistakes when applying REBU in dealerships.
Acting as an intermediary without a clear contract. If you facilitate the sale between two private individuals without defining your role in writing, the tax office could interpret that you are the seller. This would imply VAT obligations that are not yours, or responsibility for an ITP that should not fall on you either.
Not checking whether there are Vehicle Tax debts before buying from a private individual. Outstanding Municipal Vehicle Tax (IVTM) can block the transfer at the DGT. Before closing a purchase from a private individual, check that there are no unpaid receipts.
Conclusion
ITP is a tax that the dealership does not pay directly in most of its sales, but which appears constantly in its operations: purchases from private individuals, part-exchanges, customer advice. Knowing when it applies, how it is calculated and what documentation each transaction needs protects the business from tax errors and improves the buyer experience.
Frequently asked questions
Who pays ITP when buying a car from a private individual?
Always the buyer. It is a personal, non-transferable obligation: they must self-assess the tax with their autonomous community tax office within 30 working days of signing the contract. Without proof of payment, the DGT will not process the change of name.
Do I pay ITP if I buy the car from a dealership?
No. When the seller is a professional (dealership or car trader), the transaction is subject to VAT, either under the general scheme or under REBU. ITP only applies to transactions between private individuals where no VAT invoice is involved.
How does HMRC know how much my car is worth for ITP purposes?
The Ministry of Finance publishes each year in the BOE a set of tables for valuing used vehicles (for 2026, Order HAC/1501/2025). These tables assign a base value according to make, model and version, which is reduced using a depreciation coefficient based on age. The taxable base for ITP will be the higher of this tax value and the actual price declared in the contract.
Are there communities where no ITP is paid on a used car?
Yes, with nuances. In Catalonia, vehicles over 10 years old and with a value below 40,000 euros are exempt from filing and paying form 620. Navarre has a similar exemption. In addition, some communities apply reliefs for large families, people with disabilities or vehicles with an ECO or zero-emission badge.
What happens if the buyer does not pay ITP on time?
The administration may apply surcharges of between 5% and 20% depending on how late the payment is, as well as late-payment interest. The most immediate consequence for the buyer is that the DGT will not process the transfer of the vehicle until proof of payment is provided. If the limitation period (4 years) has not expired, the tax office may demand payment at any time.
More than 500 dealerships already use Dealcar.
The platform makes it possible to record purchases from private individuals with all associated documentation, classify transactions according to whether they are taxed by VAT or REBU, generate correct contracts and invoices, and keep a traceable history of each vehicle. If you want to see how it works, request a free demo.
Contents
What ITP is and why it matters in the buying and selling of used cars
When ITP applies when selling a car (and when it doesn't)
Who pays ITP and how it is calculated
How to pay ITP: form 620, form 621 and deadlines
The role of the dealership in ITP transactions
Common dealership mistakes with ITP
Frequently asked questions
What is ITP and why it matters in the buying and selling of used cars
ITP (Property Transfer Tax) is a regional tax governed by the Royal Legislative Decree 1/1993 that levies the transfer of assets between private individuals when the transaction is not subject to VAT. In the case of vehicles, this means that whenever a private individual sells a used car to another private individual, the buyer must settle this tax before the ownership change can be processed at the DGT.
It is a tax devolved to the autonomous communities, which means that both the tax rate and the exemptions and procedures vary depending on the region where the buyer lives. Rates range from 4% to 8%, and some communities such as Catalonia exempt payment in certain cases.
For the dealership, ITP does not create a direct obligation in most of its sales (which are subject to VAT). But it does appear in day-to-day business: purchases from private individuals, part-exchanges, customers who need advice on the procedure. Understanding it properly makes the difference between closing a clean transaction and carrying documentation problems forward.
When ITP applies when selling a car (and when it doesn't)
The general rule is simple: if there is no VAT, there is ITP. Or put another way, VAT and ITP are mutually exclusive in the same transaction. You never pay both.
ITP applies when:
A private individual sells a used car to another private individual. There is no invoice with VAT, only a private sales contract.
There is no economic activity on the seller's part. If someone sells their personal car, the buyer pays ITP.
ITP does not apply when:
The seller is a dealership or professional business that issues an invoice with VAT, either under the general scheme (21%) or under the Special Scheme for Second-hand Goods (REBU). In both cases, the buyer is exempt from ITP.
It is an inheritance or a gift. In these cases, Inheritance and Gift Tax applies, not ITP.
The buyer is a businessperson who regularly buys and sells vehicles and acquires them for resale. This exemption is expressly set out in the regulations and is especially relevant for dealerships that buy stock from private individuals.
A case that causes doubts: part-exchanges. If a customer hands in their used car as part payment for another vehicle from the dealership, there are two simultaneous transactions. The dealership's sale to the customer is subject to VAT. The customer's car handed in to the dealership may be subject to ITP (if the dealership does not apply the resale exemption) or may be exempt if the dealership correctly documents that it acquires the vehicle for its commercial activity. The documentation here is what makes the difference.
Who pays ITP and how it is calculated
ITP is always paid by the buyer. No exceptions. The private seller has no obligation regarding this tax.
The taxable base is not necessarily the price shown in the sales contract. HMRC uses official vehicle valuation tables, published each year in the BOE by Ministerial Order (for 2026, Order HAC/1501/2025). These tables assign a tax value to each model according to make, version, engine capacity and power.
A depreciation coefficient is then applied to that table value depending on the age of the vehicle:
Up to 1 year: 100% of the value
1 to 2 years: 84%
2 to 3 years: 67%
3 to 4 years: 56%
4 to 5 years: 47%
5 to 6 years: 39%
6 to 7 years: 34%
7 to 8 years: 28%
8 to 9 years: 24%
9 to 10 years: 19%
10 to 11 years: 17%
11 to 12 years: 13%
More than 12 years: 10%
The final taxable base will be the higher of these two amounts: the depreciated tax value or the actual sale price declared in the contract. If a buyer pays 8,000 euros for a car whose depreciated tax value is 6,500 euros, they will be taxed on 8,000. If they pay 5,000 euros but the tax value says 6,500, they will be taxed on 6,500.
The tax rate depends on the buyer's autonomous community. These are the most relevant general rates:
Madrid: 4%
Andalusia: 4% (8% for cars and SUVs with more than 15 fiscal horsepower)
Catalonia: 5%. Exemption for vehicles more than 10 years old and with a value below 40,000 euros (except historic vehicles). In addition, since June 2025, vehicles with the zero-emission badge are taxed at 0%.
Valencian Community: 6%
Castile-La Mancha: 6%
Castile and León: 5% (8% for cars and SUVs with more than 15 fiscal horsepower)
Galicia: 8%
Asturias: 4% general (8% for cars and SUVs with more than 15 fiscal horsepower)
Cantabria: fixed amount according to engine capacity for most vehicles, 4% for the rest
Balearic Islands: 4% general (8% for cars and SUVs with more than 15 fiscal horsepower)
Canary Islands: 5.5%
Murcia: 4%
Navarre: 4%
Basque Country: varies according to the foral territory, generally 4%
A practical example. A buyer resident in the Valencian Community buys a 2020 Seat León 1.5 TSI from a private individual. HMRC's table value for that model is 18,000 euros. At 6 years old, a depreciation coefficient of 34% is applied, giving a tax value of 6,120 euros. The agreed price in the contract is 12,000 euros. Since the actual price (12,000) is higher than the tax value (6,120), the taxable base is 12,000 euros. At a rate of 6%, the ITP to be paid would be 720 euros.
Some communities also offer specific reliefs: large families, people with disabilities (33% or above), ECO or zero-emission vehicles, or historic vehicles. It is advisable to check the current regional regulations before paying.
How to pay ITP: form 620, form 621 and deadlines
The process has two parts: settle the tax with the regional tax authority and present the receipt at the DGT in order to complete the transfer.
Form 620 (in person): this is the traditional form. It is completed, paid at a collaborating bank and submitted to the tax office of the autonomous community. Some communities still use it as the main route.
Form 621 (online): the digital version, available on the electronic headquarters of most autonomous communities. It allows online payment by direct debit or card and provides the receipt immediately. It is the fastest route and the one most communities are promoting.
The choice between one and the other depends on the buyer's autonomous community. Some already require the online procedure, while others keep both options.
Documents needed to settle ITP:
Completed form 620 or 621
Sales contract signed by both parties
Copy of the vehicle registration certificate
Copy of the vehicle's technical data sheet
Buyer's ID card
The deadline for payment is 30 working days from the date the sales contract is signed. If this deadline is exceeded, the administration may apply surcharges (from 5% to 20% depending on the delay) and late-payment interest. In addition, without proof of ITP payment, the DGT will not process the change of ownership of the vehicle.
The role of the dealership in ITP transactions
Although the dealership is not liable for ITP on its sales (because it issues VAT invoices), it does become involved in several situations where this tax comes into play.
Purchases from private individuals. When a dealership buys a vehicle from a private individual to add to its stock, this transaction may be exempt from ITP if the dealership proves that it is acquiring it for resale within its ordinary business activity. To do this, it must document the transaction properly: sales contract, proof of payment, seller identification and entry in the purchase ledger. If you want to go further into how to declare these transactions correctly, we explain it in detail in the guide on how to declare the buying and selling of used vehicles in your dealership.
Part-exchanges (vehicle as part payment). If the customer hands in their used car as a deposit, the dealership must record this transaction separately. The value of the part-exchange must be documented in the contract and, if it is later resold, it must be justifiable to the tax office. The relationship between REBU and ITP in these transactions requires attention: if the car was bought from a private individual, the dealership can apply REBU when reselling it, and the original transaction is exempt from ITP. To find out when to apply each scheme, see our guide on when to use a VAT invoice and when to use REBU.
Intermediation between private individuals. If the dealership acts as an intermediary between two private individuals without actually buying the vehicle, it must make it very clear in the documentation that it is not the seller. Otherwise, it could take on tax liabilities that do not belong to it. In these transactions, the buyer will still have to settle the ITP.
Customer advice. In all sales where the dealership issues a VAT invoice (or REBU invoice), it is advisable to inform the customer that they do not have to pay ITP. This avoids confusion, especially with buyers who come from previous experiences with private sellers and assume that the tax always has to be settled. If the customer later resells that car to another private individual, then ITP will apply.
Common dealership mistakes with ITP
Not informing the customer about the tax regime for the transaction. When a buyer is not clear whether they have to pay ITP or whether they are already covered by the invoice's VAT, later claims can arise. Always make this clear at the time of sale, especially if you work with REBU, where VAT is not itemised and may cause confusion.
Not documenting purchases from private individuals properly. If the dealership buys a car from a private individual and does not keep the signed contract, proof of payment and seller identification, it loses the basis for relying on the ITP resale exemption and also complicates the subsequent application of REBU. To avoid documentation problems, review the mandatory documentation in the sale of second-hand cars.
Confusing REBU with a total exemption from tax obligations. REBU exempts the buyer from paying ITP, but it creates its own obligations for the dealership: register of transactions, legal wording on the invoice, correct margin calculation. Applying it incorrectly can lead to penalties. If you have doubts about the most common mistakes with this scheme, see our article on the common mistakes when applying REBU in dealerships.
Acting as an intermediary without a clear contract. If you facilitate the sale between two private individuals without defining your role in writing, the tax office could interpret that you are the seller. This would imply VAT obligations that are not yours, or responsibility for an ITP that should not fall on you either.
Not checking whether there are Vehicle Tax debts before buying from a private individual. Outstanding Municipal Vehicle Tax (IVTM) can block the transfer at the DGT. Before closing a purchase from a private individual, check that there are no unpaid receipts.
Conclusion
ITP is a tax that the dealership does not pay directly in most of its sales, but which appears constantly in its operations: purchases from private individuals, part-exchanges, customer advice. Knowing when it applies, how it is calculated and what documentation each transaction needs protects the business from tax errors and improves the buyer experience.
Frequently asked questions
Who pays ITP when buying a car from a private individual?
Always the buyer. It is a personal, non-transferable obligation: they must self-assess the tax with their autonomous community tax office within 30 working days of signing the contract. Without proof of payment, the DGT will not process the change of name.
Do I pay ITP if I buy the car from a dealership?
No. When the seller is a professional (dealership or car trader), the transaction is subject to VAT, either under the general scheme or under REBU. ITP only applies to transactions between private individuals where no VAT invoice is involved.
How does HMRC know how much my car is worth for ITP purposes?
The Ministry of Finance publishes each year in the BOE a set of tables for valuing used vehicles (for 2026, Order HAC/1501/2025). These tables assign a base value according to make, model and version, which is reduced using a depreciation coefficient based on age. The taxable base for ITP will be the higher of this tax value and the actual price declared in the contract.
Are there communities where no ITP is paid on a used car?
Yes, with nuances. In Catalonia, vehicles over 10 years old and with a value below 40,000 euros are exempt from filing and paying form 620. Navarre has a similar exemption. In addition, some communities apply reliefs for large families, people with disabilities or vehicles with an ECO or zero-emission badge.
What happens if the buyer does not pay ITP on time?
The administration may apply surcharges of between 5% and 20% depending on how late the payment is, as well as late-payment interest. The most immediate consequence for the buyer is that the DGT will not process the transfer of the vehicle until proof of payment is provided. If the limitation period (4 years) has not expired, the tax office may demand payment at any time.
More than 500 dealerships already use Dealcar.
The platform makes it possible to record purchases from private individuals with all associated documentation, classify transactions according to whether they are taxed by VAT or REBU, generate correct contracts and invoices, and keep a traceable history of each vehicle. If you want to see how it works, request a free demo.
