Tax Guide

1. First things first: new build and resale are not taxed the same

The main tax depends on the type of property you buy. If you buy a new-build home, you will normally pay VAT. If you buy a resale property, you will normally pay Transfer Tax (ITP). The Spanish Tax Agency distinguishes between first deliveries of homes (VAT) and used homes (ITP). This difference is fundamental because it changes the total cost of the transaction.

2. Common costs in a property purchase

In addition to the main tax, the buyer should plan for other typical costs:

• Notary.
• Land Registry.
• Admin agent, if involved.
• Valuation, if there is a mortgage.
• Possible bank fee, if applicable.
• Home insurance, especially if financed with a mortgage.
• Utility transfers and minor post-completion costs.

As a guide, these costs vary with property price, transaction complexity, whether there is a mortgage and the lender. Each transaction should be calculated individually.

3. Taxes when buying a new-build home

On a new-build property the buyer pays VAT. The general rate for buying a new home is currently 10%, and can be 4% for special protected housing or public promotion schemes. In addition to VAT, the Valencian Community applies Stamp Duty (AJD). The Valencian Tax Agency sets a general AJD rate of 1.5% and a reduced rate of 0.1% for first copies of deeds acquiring a main home. From 1 June 2026 the general AJD rate in the Valencian Community becomes 1.4% for general cases under Law 5/2025. The basic calculation for new build is: property price + VAT + AJD + purchase costs.

4. Taxes when buying a resale home

On resale property VAT does not apply; ITP does. The buyer pays this tax to the regional tax authority where the property is located. In the Valencian Community, the official table until 31 May 2026 sets a general rate of 10% for homes and 11% for property or rights valued above €1,000,000. From 1 June 2026 the general rate falls to 9%, unless the value exceeds €1,000,000, in which case 11% applies. Reduced rates exist for certain cases (young buyers, main home, large families, single-parent families, disability, victims of gender violence, protected housing), subject to legal requirements and value limits. The official table includes, for example, 6% for a first main home bought by buyers under 35 up to €180,000, and 3% in certain protected cases with the same value cap. Before signing a deposit or deed, check whether a reduced rate applies.

5. If you buy with a mortgage

When the purchase is financed with a mortgage, distinguish two blocks of costs. Purchase costs are for the buyer: main tax, purchase notary, registry, admin agent if used and other purchase expenses. Mortgage formalisation costs are separate. Since Law 5/2019 the buyer pays the valuation while the bank covers notary, registry, tax and admin costs linked to the mortgage. Many buyers confuse purchase costs with mortgage loan costs.

6. Other costs and adjustments that may arise

Beyond main taxes and fees, other items may appear:

• Apportionment of property tax (IBI) between buyer and seller.
• Outstanding community charges or debt certificates.
• Approved special levies (derramas).
• Agency fees, depending on agreement and mandate.
• Cancellation of charges or the seller's existing mortgage.
• Utility account transfers.

Review these before signing, especially on resale homes: charges, community, levies and registry status.

7. Taxes that usually fall on the seller

Although this guide is for buyers, it helps to know what the seller typically pays. In a sale the seller usually pays municipal capital gains tax, except in specific cases. Alicante City Council states that in onerous transfers such as a sale the liable party is the seller; if the seller is a non-resident individual, substitution by the buyer may apply. The seller may also need to declare capital gains in personal income tax. Exemptions exist in some cases, such as transfer of a main home by owners aged 65 or over or in severe or major dependency.

8. Illustrative practical examples

The following examples are indicative and do not replace a personalised calculation for your transaction.

Example 1: new-build home at €250,000

If you buy a new home at €250,000, general VAT would be €250,000 × 10% = €25,000. If reduced AJD for acquiring a main home at 0.1% applies, AJD would be €250,000 × 0.1% = €250. Main taxes would be approximately €25,000 VAT + €250 AJD = €25,250. Add notary, registry, admin, valuation if mortgaged and other possible costs.

Example 2: resale home at €250,000

If you buy a resale home at €250,000 with no reduced rate, ITP depends on the signing date. Until 31 May 2026 at 10%: €250,000 × 10% = €25,000 ITP. From 1 June 2026 at 9%: €250,000 × 9% = €22,500 ITP. Add notary, registry, admin and other transaction costs.

Example 3: first main home for a buyer under 35

If a buyer under 35 purchases a first main resale home for €180,000 and meets the requirements for the 6% reduced rate, ITP would be €180,000 × 6% = €10,800. Do not apply this automatically to higher-priced homes; the value limit is a key condition.

9. Why you should calculate everything before signing a deposit

Before signing a deposit contract you need the full cost of the transaction. Purchase price alone is not enough: calculate taxes, fees, financing, possible tax reductions and the real amount the buyer must provide. A wrong calculation can cause liquidity problems, mortgage delays or issues before completion at the notary.

Sources and references

• Generalitat Valenciana — ITP and AJD rates (atv.gva.es).
• Bank of Spain — Costs associated with a mortgage (clientebancario.bde.es).
• Spanish Tax Agency — VAT or ITP when buying a home (sede.agenciatributaria.gob.es).
• Generalitat Valenciana — Stamp duty (AJD) (atv.gva.es).
• Official State Gazette — Law 5/2025 of 30 May (BOE-A-2025-11959).
• Alicante City Council — Municipal capital gains (alicante.es).
• Spanish Tax Agency — Transfer of main home by owners aged 65 or over.