Table of Contents
What IVTM is and how it works
The January 1st rule: who has to pay it
What happens when a car is sold halfway through the year
How to reflect this in the sale agreement
What happens if the buyer does not process the transfer
Special cases: fleets, companies and cars in stock
Consequences of having unpaid IVTM outstanding
Frequently asked questions
What IVTM is and how it works
The Impuesto sobre Vehículos de Tracción Mecánica (IVTM), commonly known as road tax or municipal tax, is an annual tax managed by local councils that is levied on the ownership of any motor vehicle registered in Spain.
Unlike ITP or IEDMT, which are paid only once at the time of purchase or registration, IVTM is accrued every year and is paid by the registered owner of the vehicle. It does not matter how much you use the car: if it is in your name, you pay the tax.
The amount varies depending on the local council and the fiscal horsepower of the vehicle. For passenger cars, the usual range is between 60 and 200 euros per year. Large cities have higher rates than small municipalities, and some local councils offer discounts for electric or low-emission vehicles.
The IVTM must be paid in order to complete the transfer of a vehicle. If there are outstanding receipts, the DGT blocks the change of ownership until they are settled. To see how this affects the transfer process, you can review our guide on digital change of ownership: a guide for dealerships.
The January 1st rule: who has to pay it
The rule is clear: the IVTM is paid by whoever appears as the owner of the vehicle in the municipal register on 1 January of the current year.
This means that if you sell a car on 15 May, that full year's IVTM is already yours: you pay it even if the car has been in the buyer's hands for five months. And if you buy a car on 15 May, that year's IVTM had already accrued to the seller: you do not pay until the following financial year.
This rule is objective and does not depend on what is agreed between the parties: what varies is who reimburses whom for the proportional part.
What happens when a car is sold halfway through the year
When the sale takes place during the year, there are two common situations:
The seller has paid the IVTM at the start of the year. The common practice in the industry is to agree on a pro-rata split: the buyer reimburses the seller for the proportional part of the tax corresponding to the months remaining from the sale until the end of the year. If the IVTM is 120 euros and the sale takes place on 1 July, the buyer reimburses 60 euros (six months).
This pro-rata split is not legally mandatory: the legal obligation for that year's IVTM lies with the owner as of 1 January. However, it is a fair practice that is usually included in the purchase agreement.
The seller has not paid the current year's IVTM. If there are outstanding receipts, the transfer is blocked. The seller must settle the debt before being able to complete the change of ownership. If the dealership unknowingly buys a car with outstanding IVTM, they can use this information as a negotiation argument to adjust the purchase price or demand that the seller settles it before closing.
How to reflect this in the sale agreement
The sale agreement is the correct place to make clear how the IVTM for the transaction is handled. Failing to do so leads to subsequent disputes when the buyer receives an unexpected bill or when the seller does not receive the agreed reimbursement.
At the very least, the contract must state:
If a pro-rata split has been agreed, the exact amount the buyer is reimbursing the seller for the proportional IVTM, and the timeframe for doing so. If the current year's IVTM is outstanding, who assumes this obligation (it is standard practice for the seller to settle it prior to signing or for it to be deducted from the price). If the vehicle has outstanding IVTM receipts from previous years, the seller must settle them as a prior condition to the sale.
To see what other clauses are essential in a professional purchase agreement, you can review the guide on essential contracts in professional car sales.
What happens if the buyer does not process the transfer
This is the scenario that causes the most problems in professional sales. The buyer has 30 business days to complete the change of ownership, but they do not always do so within the deadline.
As long as the car remains in the seller's name in the DGT registry, the following year's IVTM will go to the seller even if the car is no longer theirs. And the notification from the local council will be sent to the seller's address.
The solution is to submit a notification of sale to the DGT, which the seller can do immediately after signing the contract, for free and online. This notification does not change the ownership (the buyer does that), but it does prove that the vehicle was transferred on a specific date. With this proof, if a post-sale IVTM bill arrives, the seller can contest the assessment with the council by proving that the vehicle was no longer theirs.
Without a notification of sale, the situation is more complicated: the seller remains the registered owner and the local council will claim the tax from them.
To understand all the consequences of the buyer not processing the transfer, you can check out the article on complaints against dealerships before the DGT.
Special cases: fleets, companies and cars in stock
Cars in dealership stock. Vehicles in the dealership's inventory in the company's name also pay IVTM. Every car in stock on 1 January generates an IVTM bill that is sent to the dealership. For cars that remain in stock for a long time, this cost accumulates and must be factored into the calculation of the real margin on the operation.
A temporary de-registration (baja temporal) is the option to reduce this cost for vehicles that are expected to take some time to sell. A car under temporary de-registration does not incur IVTM while in that status. To understand when it is advisable to request this, you can check out the guide on temporary de-registration of a car with the DGT.
Company vehicles purchased by an individual. If the company sells a fleet car to an individual during the year, that year's IVTM has been paid by the company. The pro-rata split works the same way as in a sale between individuals: the proportional reimbursement is agreed in the contract if applicable.
Cars acquired at auction or renting at the end of the contract. The IVTM for the year in which the transfer takes place follows the same rule: it is paid by whoever was the owner on 1 January. In auctions, the cost of the current year's IVTM must be calculated as part of the total acquisition cost if the auction takes place during the first half of the year.
Consequences of having unpaid IVTM outstanding
Unpaid IVTM bills cause two types of problems.
Administrative problems: the local council starts an executive collection procedure which can include surcharges of up to 20% on the original amount, late-payment interest and, ultimately, the seizure of accounts or assets. Furthermore, while the IVTM is outstanding, the DGT will not process the change of ownership of the vehicle.
Operational problems: if a dealership unknowingly buys a car with outstanding IVTM debts, they will find that they cannot transfer it until the seller settles the debt, or until the dealership pays it themselves to unblock the process. In this latter case, the dealership can claim that amount back from the seller, but it adds administrative hassle and delay to the transaction.
Verifying the status of the IVTM before any purchase is part of the standard pre-inspection process. To see how to integrate this into the complete inspection process for each vehicle, you can consult the guide on what to check before buying a car for resale.
More than 750 dealerships already use Dealcar to manage their daily operations
Dealcar automatically generates the sale contract with the IVTM clause included, submits the notification of sale to the DGT at the moment of signing, and keeps the tax history of each vehicle in its file. With every transaction properly documented, the dealership is protected against IVTM claims for vehicles already sold.
If you want to see how it works, you can schedule a free demo at dealcar.io.
Frequently asked questions
Does the buyer have to pay the IVTM for the year they buy the car?
Not necessarily. The IVTM for the current year accrued on 1 January in the seller's name. The buyer only starts paying the IVTM from the following financial year. What can be agreed is a pro-rata split of the current year to compensate the seller for the remaining months.
Is it mandatory to perform a pro-rata split of the IVTM in the contract?
It is not legally mandatory. The legal obligation always falls on the owner as of 1 January. The pro-rata split is a common and fair practice that the parties freely agree to in the contract. Without this agreement, the seller pays the full year even if they sold the car in January.
What should I do if I receive an IVTM bill for a car I already sold?
If you notified the DGT of the sale, you have the proof to contest the bill with the local council. Submit the notification of sale and the purchase agreement proving the date of the transfer. If you did not notify the sale, the situation is more complicated, but the sale agreement is still valid proof that the vehicle was transferred before the tax accrued.
How long does it take for the council to de-register the vehicle from my name?
The removal of the IVTM from the municipal register happens automatically when the DGT processes the change of ownership and notifies the council of the new owner. The timeframe can vary from weeks to several months depending on the local council. That is why it is important to have the notification of sale as backup in the meantime.
Do electric vehicles in stock also pay IVTM?
Yes, although many local councils offer discounts of up to 75% for electric vehicles. The discount is applied by the council where the vehicle is registered. If the dealership has several electric vehicles in stock, it is advisable to check whether the council of the company's tax address applies this discount.
Table of Contents
What IVTM is and how it works
The January 1st rule: who has to pay it
What happens when a car is sold halfway through the year
How to reflect this in the sale agreement
What happens if the buyer does not process the transfer
Special cases: fleets, companies and cars in stock
Consequences of having unpaid IVTM outstanding
Frequently asked questions
What IVTM is and how it works
The Impuesto sobre Vehículos de Tracción Mecánica (IVTM), commonly known as road tax or municipal tax, is an annual tax managed by local councils that is levied on the ownership of any motor vehicle registered in Spain.
Unlike ITP or IEDMT, which are paid only once at the time of purchase or registration, IVTM is accrued every year and is paid by the registered owner of the vehicle. It does not matter how much you use the car: if it is in your name, you pay the tax.
The amount varies depending on the local council and the fiscal horsepower of the vehicle. For passenger cars, the usual range is between 60 and 200 euros per year. Large cities have higher rates than small municipalities, and some local councils offer discounts for electric or low-emission vehicles.
The IVTM must be paid in order to complete the transfer of a vehicle. If there are outstanding receipts, the DGT blocks the change of ownership until they are settled. To see how this affects the transfer process, you can review our guide on digital change of ownership: a guide for dealerships.
The January 1st rule: who has to pay it
The rule is clear: the IVTM is paid by whoever appears as the owner of the vehicle in the municipal register on 1 January of the current year.
This means that if you sell a car on 15 May, that full year's IVTM is already yours: you pay it even if the car has been in the buyer's hands for five months. And if you buy a car on 15 May, that year's IVTM had already accrued to the seller: you do not pay until the following financial year.
This rule is objective and does not depend on what is agreed between the parties: what varies is who reimburses whom for the proportional part.
What happens when a car is sold halfway through the year
When the sale takes place during the year, there are two common situations:
The seller has paid the IVTM at the start of the year. The common practice in the industry is to agree on a pro-rata split: the buyer reimburses the seller for the proportional part of the tax corresponding to the months remaining from the sale until the end of the year. If the IVTM is 120 euros and the sale takes place on 1 July, the buyer reimburses 60 euros (six months).
This pro-rata split is not legally mandatory: the legal obligation for that year's IVTM lies with the owner as of 1 January. However, it is a fair practice that is usually included in the purchase agreement.
The seller has not paid the current year's IVTM. If there are outstanding receipts, the transfer is blocked. The seller must settle the debt before being able to complete the change of ownership. If the dealership unknowingly buys a car with outstanding IVTM, they can use this information as a negotiation argument to adjust the purchase price or demand that the seller settles it before closing.
How to reflect this in the sale agreement
The sale agreement is the correct place to make clear how the IVTM for the transaction is handled. Failing to do so leads to subsequent disputes when the buyer receives an unexpected bill or when the seller does not receive the agreed reimbursement.
At the very least, the contract must state:
If a pro-rata split has been agreed, the exact amount the buyer is reimbursing the seller for the proportional IVTM, and the timeframe for doing so. If the current year's IVTM is outstanding, who assumes this obligation (it is standard practice for the seller to settle it prior to signing or for it to be deducted from the price). If the vehicle has outstanding IVTM receipts from previous years, the seller must settle them as a prior condition to the sale.
To see what other clauses are essential in a professional purchase agreement, you can review the guide on essential contracts in professional car sales.
What happens if the buyer does not process the transfer
This is the scenario that causes the most problems in professional sales. The buyer has 30 business days to complete the change of ownership, but they do not always do so within the deadline.
As long as the car remains in the seller's name in the DGT registry, the following year's IVTM will go to the seller even if the car is no longer theirs. And the notification from the local council will be sent to the seller's address.
The solution is to submit a notification of sale to the DGT, which the seller can do immediately after signing the contract, for free and online. This notification does not change the ownership (the buyer does that), but it does prove that the vehicle was transferred on a specific date. With this proof, if a post-sale IVTM bill arrives, the seller can contest the assessment with the council by proving that the vehicle was no longer theirs.
Without a notification of sale, the situation is more complicated: the seller remains the registered owner and the local council will claim the tax from them.
To understand all the consequences of the buyer not processing the transfer, you can check out the article on complaints against dealerships before the DGT.
Special cases: fleets, companies and cars in stock
Cars in dealership stock. Vehicles in the dealership's inventory in the company's name also pay IVTM. Every car in stock on 1 January generates an IVTM bill that is sent to the dealership. For cars that remain in stock for a long time, this cost accumulates and must be factored into the calculation of the real margin on the operation.
A temporary de-registration (baja temporal) is the option to reduce this cost for vehicles that are expected to take some time to sell. A car under temporary de-registration does not incur IVTM while in that status. To understand when it is advisable to request this, you can check out the guide on temporary de-registration of a car with the DGT.
Company vehicles purchased by an individual. If the company sells a fleet car to an individual during the year, that year's IVTM has been paid by the company. The pro-rata split works the same way as in a sale between individuals: the proportional reimbursement is agreed in the contract if applicable.
Cars acquired at auction or renting at the end of the contract. The IVTM for the year in which the transfer takes place follows the same rule: it is paid by whoever was the owner on 1 January. In auctions, the cost of the current year's IVTM must be calculated as part of the total acquisition cost if the auction takes place during the first half of the year.
Consequences of having unpaid IVTM outstanding
Unpaid IVTM bills cause two types of problems.
Administrative problems: the local council starts an executive collection procedure which can include surcharges of up to 20% on the original amount, late-payment interest and, ultimately, the seizure of accounts or assets. Furthermore, while the IVTM is outstanding, the DGT will not process the change of ownership of the vehicle.
Operational problems: if a dealership unknowingly buys a car with outstanding IVTM debts, they will find that they cannot transfer it until the seller settles the debt, or until the dealership pays it themselves to unblock the process. In this latter case, the dealership can claim that amount back from the seller, but it adds administrative hassle and delay to the transaction.
Verifying the status of the IVTM before any purchase is part of the standard pre-inspection process. To see how to integrate this into the complete inspection process for each vehicle, you can consult the guide on what to check before buying a car for resale.
More than 750 dealerships already use Dealcar to manage their daily operations
Dealcar automatically generates the sale contract with the IVTM clause included, submits the notification of sale to the DGT at the moment of signing, and keeps the tax history of each vehicle in its file. With every transaction properly documented, the dealership is protected against IVTM claims for vehicles already sold.
If you want to see how it works, you can schedule a free demo at dealcar.io.
Frequently asked questions
Does the buyer have to pay the IVTM for the year they buy the car?
Not necessarily. The IVTM for the current year accrued on 1 January in the seller's name. The buyer only starts paying the IVTM from the following financial year. What can be agreed is a pro-rata split of the current year to compensate the seller for the remaining months.
Is it mandatory to perform a pro-rata split of the IVTM in the contract?
It is not legally mandatory. The legal obligation always falls on the owner as of 1 January. The pro-rata split is a common and fair practice that the parties freely agree to in the contract. Without this agreement, the seller pays the full year even if they sold the car in January.
What should I do if I receive an IVTM bill for a car I already sold?
If you notified the DGT of the sale, you have the proof to contest the bill with the local council. Submit the notification of sale and the purchase agreement proving the date of the transfer. If you did not notify the sale, the situation is more complicated, but the sale agreement is still valid proof that the vehicle was transferred before the tax accrued.
How long does it take for the council to de-register the vehicle from my name?
The removal of the IVTM from the municipal register happens automatically when the DGT processes the change of ownership and notifies the council of the new owner. The timeframe can vary from weeks to several months depending on the local council. That is why it is important to have the notification of sale as backup in the meantime.
Do electric vehicles in stock also pay IVTM?
Yes, although many local councils offer discounts of up to 75% for electric vehicles. The discount is applied by the council where the vehicle is registered. If the dealership has several electric vehicles in stock, it is advisable to check whether the council of the company's tax address applies this discount.
