Resale or new build: two different tax regimes
| Type of purchase | Main tax | Who sets the rate |
|---|---|---|
| Resale home (second-hand) | Transfer tax — Impuesto de Transmisiones Patrimoniales (ITP): 9 % general rate, 11 % for properties over €1 million, and reduced rates for some buyers of a main home | Generalitat Valenciana |
| New build bought from the developer | VAT (IVA), generally 10 %, with exceptions such as 4 % for certain protected housing, plus stamp duty — Actos Jurídicos Documentados (AJD): 1.4 % general rate | VAT: the State · AJD: Generalitat Valenciana |
| Garage, storage room, commercial premises or plot | Garages and storage rooms sold together with the home generally follow its rate; bought separately, or premises and plots, they can be taxed differently — for new builds, VAT at 21 % | Depends on the asset and how it is sold |
Which regime applies is not always obvious: a home bought from a developer is not always a “first transfer”, and a renovated building can change the answer. It is worth confirming before you sign, because it changes the figure substantially.
On what value the tax is paid
Many buyers assume the tax is calculated on the agreed price. For transfer tax, the minimum base is the cadastral reference value set by the Spanish Cadastre, if it is higher than the price. Buying below that value does not lower your tax, and the tax office can review the figure later.
Reduced rates: possible, not automatic
The Valencian Community has reduced rates for some buyers — for example, linked to age, large families, disability or buying a main home. Most are tied to requirements about the buyer and the use of the property, so a holiday home bought by a non-resident usually does not qualify. Applying one you are not entitled to is the kind of mistake that comes back with interest.
The other costs of the purchase
| Cost | What it is | What it depends on |
|---|---|---|
| Notary | Authorising the deed | Regulated fees that depend on the value and the length of the deed |
| Land Registry | Registering your ownership | Regulated fees based on the value |
| Mortgage | Valuation and other loan costs | Since 2019 most of the loan’s formal costs fall on the bank |
| Estate agency | Their commission | Usually paid by the seller — check what the reservation says |
| Gestoría | Paperwork and tax filing | Optional, sometimes required by the bank |
| Your lawyer | Checks, contracts, negotiation and signing | A fixed written quote before we start; the first consultation costs €100 |
If the seller is a non-resident
This catches many buyers by surprise: when the seller is not tax-resident in Spain, the buyer has to keep back part of the price and pay it to the Spanish tax office on the seller’s account. If it is not done, the property can answer for the seller’s tax debt. It is one of the things I check before the arras are signed.
Deadlines
In the Valencian Community, purchase taxes are self-assessed and paid within one month of signing the deed; filing late adds surcharges and interest. The Land Registry will not register the deed until the tax has been dealt with.
Why I do not give you a percentage
You will read rules of thumb online, but the real figure depends on the type of property, its reference value, whether you qualify for any reduced rate, the mortgage and the seller’s residence. Before you commit, I give you the full cost of your purchase in writing.
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