It is not unusual to find rental contracts in which a third party guarantees jointly and severally as a guarantee of compliance with the contract. Until now this was an act that had no tax significance. However, for some months, some Tax Agencies such as Catalonia and Madrid have been liquidating rental contracts in which there is a guarantor. Thus, these haciendas consider that the guarantee is another taxable amount in addition to the rent itself, which is subject to the Patrimonial Transfer Tax.
For practical purposes it is considered that the amount subject to tax is the total amount of the guarantee and that the taxpayer is the creditor of this guarantee, that is to say the owner, who is in favor of whom the guarantee is constituted. The type of tax they apply is 1% while in the rent is 0.5%.
And what bonds or guarantees are subject to this tax? Therefore, the legal bonds stipulated by the Urban Lease Law and others agreed in the same rental contract as an additional guarantee are not considered taxable.
Obviously, rent contracts made between entrepreneurs or companies, such as business premises or properties rented by or for professional activity are not subject to this tax. These rentals are subject to VAT as indicated in article 20 of Law 37/1992 on Value Added Tax.
If you want more information do not hesitate to contact STAR PROP, we are real estate experts and specialists in tax and legal matters.