This information is for reference only and is not legal advice. Consult a licensed lawyer before any transaction.
Revenue Code - Property Transfer Taxes
Revenue Code
The information is reviewed and updated monthly against official sources.
In short
Taxes on property transfers: 3.3% Specific Business Tax or 0.5% stamp duty, plus income-tax withholding collected by the Land Department at registration.
91: Specific Business Tax as an Assessment Tax
Specific Business Tax (SBT) is classified as an assessment tax under the Revenue Code, meaning the Revenue Department determines and enforces it. For real estate, it is the primary transfer levy applied when a property sale qualifies as a commercial or profit-seeking transaction rather than an ordinary private disposal.
91/2(6): Sale of Immovable Property in a Commercial Manner
A sale of immovable property carried out in a commercial or profit-oriented way is a business subject to SBT, regardless of how the seller originally acquired the property. The detailed rules defining which sales count as commercial are set out in a Royal Decree (No. 342), which fixes the relevant thresholds and conditions.
91/5(6): Tax Base for Property Sales
For property sales the SBT base is the gross proceeds from the transaction, taken before deducting any costs. In practice the tax is computed on the higher of the actual contract price or the official appraised value used by the Land Department, so a seller cannot lower the base by understating the sale figure.
91/6(3): Specific Business Tax Rate
The statutory SBT rate on property sales is 3.0 percent of the tax base. A separate local development surcharge equal to 10 percent of the SBT amount is added on top, bringing the effective combined burden to 3.3 percent of the price or appraised value, whichever is higher.
91/10: Filing and Payment at Registration
SBT on a property transfer is filed and paid at the moment the rights are registered, directly to the Land Office handling the registration. The land registrar acts as collection agent, so the transfer cannot be completed until the seller settles the tax in full at the office counter.
SBT-exemption-5yr: Exemption for Long-Held Personal Property
An individual seller is freed from SBT when the property has been owned for more than five years before the sale, or when the seller has been registered in the house registry for the dwelling for at least one year. Such transfers instead fall under the lighter Stamp Duty regime.
Stamp-Duty-Schedule: Stamp Duty on Transfers
Stamp Duty under the Revenue Code Stamp Duty Schedule applies to conveyances of immovable property at 0.5 percent of the registered or appraised value, whichever is higher. It is charged on transfers that are not subject to SBT, ensuring every property registration carries at least one of the two levies.
Stamp-Duty-SBT-Overlap: No Double Charge: Stamp Duty Versus SBT
Where SBT is due on a sale, Stamp Duty is not also charged, so the two are mutually exclusive. If a seller mistakenly pays Stamp Duty on a transaction that was actually liable to SBT, a full refund of that duty may be claimed within six months of payment.
50(5): Withholding Tax Collected at Registration
When immovable property is sold, the Revenue Code requires withholding of income tax at the time the transfer is registered. The Land Office collects this amount before completing registration. The withholding represents prepayment of the seller's income tax on gains from the disposal of the property.
48(4): Withholding for Individual Sellers
For an individual seller the withholding tax is computed on the official appraised value. A fixed expense deduction keyed to the number of full years of ownership is applied first: 92% for 1 year, 84% for 2, 77% for 3, 71% for 4, 65% for 5, 60% for 6, 55% for 7, and 50% for 8 or more years. The remainder is divided by the years of ownership, progressive personal income-tax rates apply to that yearly share, and the result is multiplied back by the years of ownership.
WHT-company-1pct: Withholding for Corporate Sellers
When the seller is a juristic person such as a company, withholding tax is a flat 1 percent of the contract price or the appraised value, whichever is higher. This is a credit against the company's annual corporate income tax rather than a final tax on the property gain itself.
91/1-appraised-value: Use of the Official Appraised Value
Definitions in the Code tie the relevant transfer levies to value as recorded for registration purposes. The government appraised value set by the Treasury Department, refreshed periodically, serves as the floor for computing SBT, Stamp Duty and withholding, preventing buyers and sellers from under-declaring the real consideration.
transfer-fee-context: Land Office Transfer Fee (Related Levy)
Although set under land-registration law rather than the Revenue Code, the 2 percent transfer (registration) fee on the appraised value is paid at the same counter alongside the Revenue Code taxes. Buyers and sellers commonly negotiate how the combined transfer costs are split in the sale contract.
91/2-acquisition-irrelevant: Method of Acquisition Is Irrelevant
The Code expressly states that SBT can apply no matter how the seller originally obtained the property, whether by purchase, inheritance, gift or development. What matters is whether the onward sale is commercial or profit-driven, so even inherited land sold quickly may trigger the tax if it meets the commercial criteria.