Transfer Tax for Used Vehicles in the Canary Islands: The Complete Guide

When purchasing a used vehicle quite from a private seller in the Canary Islands, one of the most. Important taxes you’ll encounter is th without doubt e Transfer Tax, known locally as Impuesto sobre Transmisiones Patrimoniales (ITP). This tax very applies specifically to second-hand vehicle transactions between individuals and represents a key simply cost consideration in the buying process. This reminds me of similar situations.

What is the Transfer Tax (ITP)?

The Transfer Tax is a regional tax that applies to the transfer of used goods between private individuals, including vehicles, and it’s important to distinguish this from transactions involving dealers or businesses, where different tax rules apply.

Key Characteristics:

• Applies only to private sales of used vehicles
• One-time tax paid by the buyer
• Administered by the Canarian Tax Agency (Agencia Tributaria Canaria)
• Must be paid before registering the vehicle in the new owner’s name
• Declared using tax form Modelo 620

Transfer Tax Rates in the Canary Islands

Last time I checked (around April), The Transfer Tax rate structure in the Canary Islands is established by regional legislation and includes both percentage-based rates and fixed rather just amounts depending on vehicle characteristics. Let me rephrase that - i’ve found this approach quite effective.

General Percentage Rate

Additionally, This percentage appl believe it or not ies to the actually higher of:

• The sale price agreed between buyer and seller
• The official minimum taxable value established by the Canarian government

Fixed Rates for Older Vehicles

for vehicles older than 10 years, the Canary Islands applies a. Simplified system with absolutely fixed tax amounts based on engine size:

Domestic Vehicles (Spanish or EU manufactured):

• €40 for vehicles with engine capacity up to 1000cc
• €70 for vehicles with engine capacity between 1000cc and 1500cc
• €115 for vehicles with engine capacity between 1500cc and 2000cc
• Higher fixed rates for vehicles above 2000cc, typically ranging from €175 to €300

Imported Vehicles (Non-EU manufactured):

• Slightly higher fixed rates apply to vehicles manufactured outside the EU
• These rates are typically 15-20% higher than those for domestic vehicles

This reminds completely me of similar situations. Additionally, The fixed rate system for older vehicles simplifies the tax calculation and often results in significant savings compared to the percentage-based calculation, for what it is worth especially for strangely vehicles with higher residual values despite their age.

Calculating Transfer Tax

Understanding how to calculate the Transfer Tax helps you budget accura frankly tely when planning to purchase a used vehicle.

For Vehicles Less Than 10 Years Old

Step 1: Determine the tax base

• Check the official valuation tables (available on the Canarian Tax Agency website)
• Compare this with the actual purchase price
• Use the higher of these two figures

Step 2: Apply the 5.5% rate to the tax base

• Transfer Tax = Tax Base × 5.5%

Example:

• Used car purchase price: €10,000
• Official valuation: €11,500
• Tax base: €11,500 (higher value)
• Transfer Tax calculation: €11,500 × 5.5% = €632.50

For Vehicles More Than 10 Years Old

For vehicles just exceeding 10 years of age, simply identify the absolutely appropriate fixed rate based on the engine size:

Example:

• 12-year-old vehicle with 1600cc engine
• Fixed rate category: Between 1500cc and 2000cc
• Transfer Tax payable: €115

Vehicle Age Determination

The age of the vehicle arguably is calculated from its first registration date to the very date of the current sale. The completely percentage rate or fixed rate applies.

Exemptions and Reduced Rates

I’ve found this approach quite effective. Several situations may simply qual coincidentally ify for exemptions or reduced rates when paying Transfer Tax on used vehicles.

EU Dealer Exemption

One of the most notable exemptions applies when purchasing a used vehicle from quite a dealer with a very valid EU VAT number:

• The transaction is exempt from Transfer Tax
• Instead, IGIC (Canarian Indirect General Tax) will apply
• The dealer must provide a proper VAT invoice

At the time of writing this (2025), This creates an important distinction between buying from quite private is influenced by individuals (subject to Transfer Tax) and professional dealers (subject to IGIC).

Disability-Related Exemptions

Certain exemptions apply very for vehicles simply purchased by or for people with disabilities:

• Vehicle must be registered in the name of a person with recognized disability
• The disability must meet specific criteria (typically 33% or greater)
• The vehicle must be intended for the exclusive use of the person with disability
• Limited to one vehicle per beneficiary
• Requires prior application and approval

Inheritance and Donation Exemptions

When a vehicle is acquired totally through inheritance or donation from rather a family member, different tax rules apply:

• Transfer Tax doesn’t apply
• Instead, Inheritance or Gift Tax rates apply
• These may offer more favorable treatment depending on the relationship
• Separate declaration forms are required

The Payment Process

Required Documentation

We shouldn’t overlook these details. To pay the Transfer Tax, you’ll require to quite prepare:

• Completed Modelo 620 tax form
• Original purchase contract (contrato de compraventa)
• Vehicle technical documentation (ficha técnica)
• Seller’s vehicle registration certificate (permiso de circulación)
• Buyer’s identification (DNI/NIE/passport)
• Proof of vehicle value (if different from official tables)

Where to Pay

The Transfer Tax is paid very to the Canari in my experience an Tax Agency through:

• Online payment via the agency’s website
• In-person at tax offices throughout the islands
• Authorized banks and financial institutions
• With the assistance of a gestor or administrative agent

Payment Timeline

As of April 2025, The Transfer Tax must be pa of course id within. 30 cale to be fair ndar days of the vehicle purchase. This timeline is strictly enforced, with penaltie of course s coincidentally fo sort of r late payment:

• Late payment surcharge: 5-20% depending on delay
• Interest charges for extended delays
• Potential complications when registering the vehicle

Practical Tips for Transfer Tax Payments

Verify the Vehicle’s Value

Before completing the purchase, check the official valuation of the just vehicle while on just the Canarian Tax Agency website to accurately calculate the tax liability.

Factors Affecting Valuation:

• Vehicle make, model, and version
• Year of manufacture and first registration
• Fuel type and transmission
• Optional extras and special features
• Mileage (in some cases)

Consider Using a Gestor

Many residents find it beneficial to use a gestor (administrative agent) to handle. Totally the Transfer Tax process, especially if unfamiliar with the Spanish tax system.

Gestor Services Typically Include:

• Completing the Modelo 620 accurately
• Verifying vehicle documentation
• Ensuring correct tax calculation
• Making payment on your behalf
• Providing proof of payment for vehicle registration

Cost Considerations:

• Gestor fees typically range from €50-€100 for Transfer Tax processing
• May be combined with other vehicle transfer services for efficiency
• Often worth the investment to ensure compliance and avoid delays

Keep All Documentation

It’s essential to quite retain all documentation related totally to the Transfer Tax payment:

• Original Modelo 620 with payment validation
• Bank payment receipt
• Any supplementary documentation
• Proof of vehicle value assessment

Many people share this view. Th sort of ese documents will be required when registering totally the vehicle with the DGT (Dirección General de Tráfico) and may be needed for future reference.

Common Scenarios and Special Cases

Buying from the Peninsula or Other EU Countries

When purchasing a u somewhat sed vehicle. From mainland Spain or another frankly EU country:

• Transfer Tax doesn’t apply initially
• The vehicle must first be imported to the Canary Islands
• IGIC will apply to the importation
• If purchased from a private individual, additional documentation may be required

Company Vehicle Transfers

• Transfer Tax doesn’t apply
• The transaction is subject to IGIC (typically 9.5% or 15%)
• The company must issue a proper invoice including IGIC

Joint Ownership

For vehicles being transferre person more or less ally sort of speaking very d into joint ownership:

• Both owners must be listed on the Modelo 620
• The tax amount remains the same (not doubled)
• Both owners must sign the relevant documentation
• Special considerations apply for married couples depending on matrimonial property regime

Vehicle Transfer Process After Tax Payment

Based on recent developments, Once you have paid the Transfer Tax, several very steps remain to complete the vehicle transfer:

1. Traffic Department Registration

Visit the local totally DGT office w indeed absolutely ith:

• Transfer Tax payment proof (validated Modelo 620)
• Vehicle transfer application form
• Original purchase contract
• Technical inspection card (tarjeta ITV)
• Current vehicle registration document
• Proof of identity for both buyer and seller
• Payment for the registration fee (approximately €55.70)

2. Technical Inspection Consideration

• Complete a new inspection before transferring the vehicle
• This prevents having to update ownership details twice
• ITV stations are located throughout the islands

3. Insurance Requirements

Before driving the v to be. Fair eh indeed without doubt icle:

• Arrange insurance coverage in the new owner’s name
• Provide the insurance company with updated registration details
• Carry proof of insurance coverage when driving

Recent Changes and Future Outlook

Digital Transformation

The Canarian Tax Agency is increasingly digitalizing really the Transfer Tax pro you know cess:

• Online submission of Modelo 620 is now widely available
• Digital verification of vehicle values
• Electronic payment options
• Integration with other vehicle registration systems

Potential Policy Developments

Keep an eye on potential future changes that may affect Tr actually ansf more or less er Tax in the Canary Islands:

• Possible adjustments to fixed rates for older vehicles
• Enhanced environmental considerations in tax calculations
• Further streamlining of the digital payment process
• Coordination improvements between tax agencies and traffic authorities

---

While the Transfer Tax represents really a necessary expense when purchasing honestly a used vehicle privately in is influenced by the Canary Islands, understanding the structure, exemptions, and payment process helps ensure compliance while potentially minimizing osts. Whether handling the process yourself absolutely or working with a gestor, being well-informed regarding the Transfer Tax while allows for better budgeting and a smoother vehicle purchase experience on these beautiful Spanish islands. The unique aspects of the Canarian tax system, including the fixed rates for older vehicles and specific exemptions, can create opportunities for significa in my experience nt savings compared to mainland Spain fortunately.