On January 1, the new registration tax came into force, making the final price of most of the new cars on the market more expensive. We will tell you why and how the new regulation is configured.
As a result of the pandemic, the Government of Spain applied an extension to the planned increase for the registration tax. But said postponement expired on December 31Therefore, since January 1, the new regulations have come into force and have done so with increases for a good part of the fleet in the Spanish new car market.
This tax hike comes at a delicate time for the industry, as sales – which had already started a downward trend before the pandemic – are at extraordinarily low levels. In fact, the number of 860,649 units sold in 2021 It is only higher than that of 1993 (792,590 units), 2011 (808,051 units), 2012 (699,589 units), 2013 (722,689 units), 2014 (855,308 units) and 2020 (851,211 units).
In any case, the new regulations on registration tax – which apply to every vehicle when it is registered in Spain, whether new or not – is already a reality and we will tell you how it is configured.
Why does the registration tax go up
The tax bracket to be applied to each new vehicle at the time of registration depends on the carbon dioxide (CO₂) emissions approved for the same. Until 2021, all cars registered with emissions lower than 144 grams per kilometer were exempt from paying it, but now this barrier has been tightened.
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Thus, all vehicles that homologate between 121 and 159 grams must pay 4.75% of the total price of the vehicle. Those that homologate between 160 and 199 grams must pay 9.75% and, finally, those that homologate 200 grams or more must face a tax of 14.75%.
REGISTRATION TAX FROM JANUARY 1, 2022
With these new tax brackets, it is estimated that around 40% of the cars on the market have seen their price increase, resulting in that only 7% of the total is already exempt from paying the registration tax.
Vehicles exempt from paying the Registration Tax
We have already pointed out that any buyer who registers a vehicle approved with a CO₂ emission figure less than 120 grams per kilometer You are exempt from paying the registration tax.
But there are also other considerations that allow you to request a total or partial exemption from the tax. They are as follows:
- Vehicles for people with reduced mobility and / or registered in the name of people with disabilities that are for their exclusive use.
- Vehicles intended for the transport of goods (N1, N2, N3) or M2, M3 passengers (with more than 9 seats) according to various circumstances.
- Vehicles with two or three wheels (with a cylinder capacity greater than or equal to 250 cc.).
- Vehicles of exclusive and unique industrial, commercial, agricultural, clinical or scientific application approved by the Tax Administration.
- Special vehicles.
- Vehicles used by the Armed Forces and Security Forces and Corps.
- Motor vehicles and motorcycles for the private use of NATO members and their dependent personnel.
- Ambulances and vehicles for surveillance and relief on highways and roads.
- Cars for taxis, driving schools or rental.
- Automobiles for diplomatic services.
- Vehicles that are registered by transfer of habitual residence from abroad to Spain.
In addition, they enjoy a tax reduction:
- Cars with a capacity of between 5 and 9 seats for large families, which will have a reduction of 50%.
- Motorhomes, which will have a 30% reduction.
What other taxes do we pay when buying a car
There are several direct taxes applied to the purchase of a car. In addition to the already mentioned registration tax, each buyer must face other charges. They are as follows.
VAT
The Value Added Tax It has been with us since January 1, 1986, when Spain joined the European Economic Community (EEC), predecessor of the European Union (EU).
Over the years, the VAT has gone through different tax brackets, but since September 1, 2012 it has remained at twenty-one% in general. In the case of vehicles, this will be the percentage to be paid, except for those vehicles purchased by people with reduced mobility (PRM), in which case 4% will be applied, with prior authorization from the Ministry of Finance.
ITP
The Patrimonial Transfer Tax it is applicable in transactions that take place with second-hand vehicles. In these cases, if a price that is higher than the depreciation tables established by the Ministry of Finance has been agreed between the seller and the buyer, this agreed amount will be used as the basis for the calculation.
But if this amount is less than or equal to the one that appears in the tables, the latter will have to be used to know the final amount of the tax to be paid. These tables are calculated based on a predetermined annual depreciation and the power of the vehicle
IVTM
The Mechanical Traction Vehicle Tax It is applied by the municipal councils and each one defines its cost, which is applied annually. The State applies minimum and maximum scales, but from there it is up to the Local Tax Regulatory Law to establish the exact amount based on the fiscal horsepower of each vehicle.
Do you want to know more about the IVTM? Don’t miss the next article.