Frequently Asked Questions

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If you buy a second-hand home, you do not pay VAT. Instead, you pay the Property Transfer Tax (known as Impuesto de Transmisiones Patrimoniales or ITP).

This is a regional tax, meaning the exact amount depends entirely on the Autonomous Community where the property is located. Generally, standard standard rates sit

between 6% and 10%.

Standard ITP Rates by Popular Region (2026):

• Catalonia, Valencia, Galicia: 10% (Note: Valencia is dropping its general rate to

9% for properties under €1 million starting June 1, 2026).

• Cantabria: 9%

• Balearic Islands, Murcia, Aragón, Extremadura: 8%

• Andalusia, La Rioja: 7%

• Madrid, Canary Islands: 6% to 6.5%

• Basque Country: 4%

💡 Tax Relief & Reductions: Most regions offer significantly lower ITP rates (often

dropping down to 3% to 5%) if you meet specific criteria, such as being under 35/40

years old, buying a primary residence, being a first-time buyer, or qualifying as a large

family.

If you are buying a brand-new home directly from a developer, you will pay two distinct taxes instead of ITP:

• VAT (IVA): This is a flat 10% nationwide tax applied to the purchase price (it

drops to 6.5% or 7% if you are buying in the Canary Islands).

• Stamp Duty (AJD): Legally called Actos Jurídicos Documentados, this tax

covers the signing of the legal documents. Like ITP, this is a regional tax and

ranges from 0.5% to 1.5% depending on where the property is located (e.g.,

Madrid is 0.75%, while Catalonia and Valencia sit at 1.5%).

Total Tax on a New Build: Typically 10.5% to 11.5% of the purchase price.

Summary Checklist: What Else to Budget For?

Taxes are the bulk of your closing costs, but you must also factor in a few additional legal fees to formalize the deed (Escritura):

1. Notary Fees: Regulated by law, usually between 0.2% and 0.5% (typically €600

– €1,000).

2. Land Registry Fees: Regulated by law, usually between 0.1% and 0.25%

(typically €400 – €650).

3. Legal Fees (Gestoría / Lawyer): Highly recommended for foreign buyers to

navigate the legal paperwork. A good real estate lawyer typically charges around

1% of the purchase price.

Note on Market Value: Be aware that Spain calculates these taxes based on the higher of two numbers: the actual purchase price or the official government-calculated market value (Valor de Referencia de Catastro). Your lawyer will check this value before you sign to avoid any surprise tax bills later on.