Tax on Buying a House in Spain: What You Really Need to Know Before Signing

Tax on Buying a House in Spain is something every buyer should understand before falling for those sea views and sun-drenched terraces. While Spain offers a relatively transparent real estate system, the taxes and legal fees involved can be complex—especially for international buyers unfamiliar with the country’s layered fiscal structure.

In this guide, we’ll break down everything you need to know about the tax on buying a house in Spain: from the difference between new-build and resale homes, to regional tax variations, annual property charges, and essential legal tips to avoid unexpected costs.

1. What Is the Main Tax When Buying a House in Spain?

The short answer? It depends on what type of property you’re buying:

• Resale property (from a private owner): You’ll pay the Property Transfer Tax (ITP).

• New build property (directly from a developer): You’ll pay VAT (IVA) and stamp duty (AJD).

Let’s break this down.

2. Property Transfer Tax (ITP) – For Resale Properties

This is the most common tax when buying second-hand homes in Spain. It’s a one-time payment due at the moment of signing the deed and is based on the declared purchase price of the home.

• National average: 6% – 10%

• In the Valencian Community (where Costa Blanca is located): 10%

• Paid to: Regional tax authority

• When: Within 30 days after signing the title deed

Example: If you buy a €200,000 resale apartment in Alicante, your ITP will be €20,000.

3. VAT (IVA) and Stamp Duty (AJD) – For New Builds

If you’re buying a brand-new home, the taxes are different. Instead of ITP, you’ll pay:

• 10% VAT (IVA)

• 1% – 1.5% Stamp Duty (Actos Jurídicos Documentados, or AJD)

In the Valencian Community, the AJD is set at 1.5%.

Example: A €250,000 new build villa in Finestrat will incur:

• €25,000 in VAT

• €3,750 in stamp duty

• Total taxes: €28,750

These are paid to different administrations but usually handled by your notary or legal rep.

4. Who Pays These Taxes?

The buyer is responsible for paying all taxes related to the purchase unless otherwise negotiated. Taxes are paid in addition to the sale price and legal fees—not included in the listing price.

5. Annual Property Taxes to Consider

After the purchase, you’ll still have to deal with annual taxes. The most important are:

a. IBI – Local Property Tax

• Paid yearly to the town hall

• Based on the cadastral value (not the purchase price)

• Average: €300 – €1,000 per year depending on location and size

b. Non-Resident Income Tax

• Applies if you don’t live in Spain full time

• Even if you don’t rent it out, a “deemed income” is calculated, usually 1.1% of cadastral value taxed at 19% for EU citizens or 24% for others

6. Other Costs & Fees When Buying a House in Spain

While taxes are the biggest chunk, here are other common costs you’ll face:

All combined, you should budget an extra 12% – 14% of the property price to cover everything.

7. What If You’re Buying With a Mortgage?

If you’re financing your purchase:

• You’ll have extra fees: bank valuation, opening fee, and possibly life insurance.

• The bank pays part of the stamp duty, but you may still face small admin costs.

• Bertrade can help negotiate better conditions and explain your TAE/APR costs in detail.

8. Regional Tax Differences in Spain

Property taxes vary by autonomous community. Some regions offer reductions for:

• First-time buyers under 35

• Families with multiple children

• People with disabilities

• Properties in rural or depopulated zones

The Valencian Community, home to cities like Alicante and coastal gems like Finestrat, offers stable and competitive tax rates, especially compared to other areas like Catalonia or the Balearic Islands.

9. What About Capital Gains Tax?

This only applies when you sell, but worth noting in advance:

• 19% to 28% depending on your profit

• Exemptions exist if you’re over 65 and selling your main residence

If you’re buying with future investment in mind, talk to a financial advisor to plan exit strategy taxes ahead.

10. FAQs (without calling them FAQs 😉)

Do you pay taxes when buying a house in Spain?

Yes. The main ones are ITP for resale homes or VAT + stamp duty for new builds.

How much are the taxes when buying?

Typically 10% – 11.5%, plus another 2% – 3% in legal and admin fees.

Can I reduce the tax burden?

Only if you qualify for specific regional incentives. Otherwise, you’ll pay the standard rate.

Is now a good time to buy?

With no major tax increases confirmed and attractive rates in the Costa Blanca region, many buyers are locking in purchases before potential policy changes.

11. Tax Reforms and Rumours: Should You Be Worried?

Here’s what’s going on right now:

✅ No changes approved for property purchase taxes in the Valencian Community
✅ 10% ITP on resales remains stable
✅ 10% VAT + 1.5% AJD on new developments still applies

🕵️‍♂️ Rumours floating around:

• 21% VAT on short-term rentals (still under discussion)

• Extra taxes for non-EU buyers (no proposal passed)

Bertrade’s advice? Don’t get distracted by the headlines. Stick to what’s confirmed and rely on local professionals (like us) to keep you informed.

12. Final Advice: Don’t Go It Alone

Understanding taxes in Spain is doable, but the fine print often trips buyers up. If you’re not fluent in Spanish bureaucracy (and even if you are), working with a local expert can save you time, stress and thousands of euros.

At Bertrade, we guide you every step of the way—from offer to notary—with full transparency on what you’ll pay and when. You’ll never be left wondering “what’s next?”

Let Bertrade guide you home

Choosing between dozens of listings online is one thing. Walking through a home that just feels right is something else. At Bertrade, our job is to bring you that feeling—whether it’s on your first viewing or your fifth.

We know that buying property is a big step. We also know that it can be one of the best decisions you’ll ever make. That’s why we’re here—to guide, support, and make the process feel exciting, not stressful.

So if Luxury Villas Costa Blanca are on your radar, reach out. Schedule a call. Let’s talk about what you need, what you want, and what’s possible.

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