Madrid eliminates regional tax on art purchases and aims to attract more galleries

Buying art in Madrid will now be cheaper for those who use specialist galleries or dealers. The Community has decided to grant a 100% tax relief on the Impuesto de Transmisiones Patrimoniales Onerosas (ITP/ITPO) for these transactions, which in practice eliminates the 4% regional levy that had until now applied to the sale and purchase of works on second transfer.

The measure, announced by Isabel Díaz Ayuso during her visit to the Salón de Arte Moderno (SAM) at the Círculo de Bellas Artes, responds to a recurring demand from the sector. The aim is for Madrid to compete on better terms with other European capitals where the taxation of art is more favourable. According to the regional government, abolishing the tax will mean annual savings of around €700,000 for those moving pieces in the Madrid market, a profile that usually coincides with major collectors and professionals.

Until now, those acquiring a work through professional intermediaries had to add the 4% regional charge to the price, in addition to VAT or the corresponding state taxes. With the new relief, Madrid seeks to attract more transactions and consolidate its position as a cultural hub, especially at a time when fairs such as ARCO and satellite events turn the city into an international meeting point for gallerists and collectors.

The tax cut adds to other initiatives supporting the sector, such as the Museos y Exposiciones programme, which provides for investment of €9.4 million through 2026, or public purchases of art works, which since 2020 have made it possible to add more than 300 pieces to regional collections. In addition, the Community is maintaining pressure on the central government to reduce the 21% VAT on the sale and purchase of art, far above that applied in countries such as Italy, France or Germany.

The change affects only transactions carried out through galleries and dealers, excluding direct transactions between private individuals or donations and inheritances, which are taxed under other concepts. In Madrid, art was already a tax haven for large fortunes: according to recent data, 70% of the luxury assets of the region’s wealthiest people are concentrated in works of art, a proportion far higher than in other autonomous communities.

The Círculo de Bellas Artes, where the announcement was made, is one of the most emblematic spaces in Madrid’s cultural life. Its schedule of exhibitions, concerts and fairs makes it a reference point for people seeking new trends and gatherings in the city centre. Every year, during the major art events, the building fills with visitors and professionals who set the pace of Madrid’s cultural season.