ITP Spain (Property Transfer Tax)
ITP is Spain's transfer tax on the purchase of resales — each autonomous region sets its own rate, so it can differ substantially depending on where the property is located.
What is ITP Spain (Property Transfer Tax)?
ITP is Spain's transfer tax on the purchase of resales — each autonomous region sets its own rate, so it can differ substantially depending on where the property is located. In the Valencia region, following the reform under Ley 5/2025, a tiered rate of 9% applies up to a certain purchase price, rising to 11% on the portion above it. The Canary Islands charge a noticeably lower 6.5% — a meaningful difference worth factoring into any decision between locations within Spain. Other autonomous regions set their own rates again, which can differ from both of these examples. ITP applies exclusively to the purchase of an already existing, resale property — buying a new-build directly from the developer instead triggers VAT (IVA) together with stamp duty (AJD), a different tax regime with its own logic. This new-build versus resale distinction is central to cost planning, not a minor technicality.
What matters about these two points
The answer box above states the case. The two points it is built from carry their own heading here — together with what each of them means in practice.
How much the rates vary by region
Choosing where in Spain to buy is therefore also a tax decision. Before comparing two properties in different regions, look up the rate that applies in each — on a six-figure purchase price, a single percentage point moves a five-figure sum.
Why only resale properties are affected
For the cost calculation this means: first establish whether the property is a first sale or resale, and only then start calculating. Getting the tax type wrong is not a rounding error but the wrong tax regime altogether.
Why ITP is often the largest single cost item
For a typical purchase price, ITP frequently exceeds all other closing costs (notary, land registry, tasación) combined — anyone who doesn't budget realistically for the specific region risks a noticeable funding gap right before signing. The exact rate for the relevant region should be confirmed early, not just before the notary appointment.
Reduced rates exist — but rarely reach non-residents
Several autonomous regions provide reduced ITP rates, typically for young buyers, large families, buyers with a disability, or the purchase of a main home. These reliefs are set regionally and vary widely in both conditions and size. For non-residents they generally do not apply, because almost every qualifying condition is tied to habitual residence or to using the property as a primary home — precisely what is missing with a second home or an investment purchase. Anyone who finds an attractively low rate quoted online for a particular region should therefore check whether it is the general rate or a reduced one attached to conditions. The gap between the two is wide enough to overturn a closing-cost calculation that looked comfortable.
When the tax office revalues the purchase
Since the reform the tax base is the cadastral reference value, not the agreed price. Where the price falls below that reference value, tax is charged on the reference value anyway — and a buyer who declares the price receives a supplementary assessment with interest and possibly a surcharge. The reference value can be looked up online before the purchase, and it belongs in the cost calculation before the deposit contract is signed, not after. The second point: the reference value can be challenged, but only after the event and with a valuation report, and the burden of proof sits with the buyer. For properties needing renovation, whose price is genuinely below the reference, this is a recurring and expensive dispute.
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