Posted in: Legal
Property Purchase Tax: from 1 June 2026, buyers purchasing resale properties in the Valencian Community have benefited from a reduction in Property Transfer Tax (ITP). The general rate has decreased from 10% to 9%. The measure forms part of wider regional tax reforms aimed at encouraging investment, supporting the property market, and reducing the financial burden on purchasers.
The change applies to second-hand or resale properties located in the Valencian Community, including popular areas such as Alicante, Valencia, Torrevieja, Orihuela Costa, Benidorm and Elche. Until now, most buyers paid 10% ITP on the purchase price or tax reference value of the property. From June 2026, this standard rate reduced to 9% for properties valued at up to one million euros. Properties exceeding one million euros will continue to attract a higher 11% tax rate.
Although a reduction of 1% may initially appear modest, in practice it can represent significant savings. A purchaser buying a resale property for €250,000 would previously have paid €25,000 in transfer tax. Under the new rate, the tax payable would reduce to €22,500, creating a saving of €2,500. For a property priced at €500,000, the saving increases to €5,000.
The reform is particularly important for international buyers and second-home owners. Many of whom continue to choose the Costa Blanca region for relocation, retirement, holiday homes and investment properties.
In addition to the ITP reduction, the regional government also lowered the AJD (Stamp Duty on notarised documents) from 1.5% to 1.4%. This reduction mainly affects buyers of new-build properties or purchasers signing mortgage deeds and other notarised legal documents.
Purchases completed before 1 June 2026 remain subject to the property purchase tax 10% rate, while completions from that date onwards benefit from the reduced 9% rate.
Anyone considering buying property should nevertheless obtain independent legal and tax advice before proceeding, as overall purchase costs will still include notary fees, land registry costs, legal fees and, where applicable, mortgage expenses. Buyers should also ensure that they understand whether the transaction involves a resale property subject to ITP or a new-build property subject to VAT and AJD instead. Property purchase taxes are important to understand.
Alongside the reduction of Property Purchase Tax or Transfer Tax (ITP) from 10% to 9% in the Valencian Community, there are several other important tax and financial changes that may affect residents, expats, investors and property owners during 2026.
One of the most significant developments is the planned increase in the Wealth Tax allowance in the Valencian Community. This may benefit many residents who own property or investments in Spain, particularly couples with jointly owned assets. We will advise when this comes into effect.
The Valencian government is also expanding tax reductions for inheritances and gifts between wider family members. Until now, the most generous reductions mainly applied between spouses, parents and children. We will advise when this comes into effect.
Spanish tax authorities continue to pay close attention to individuals spending significant periods in Spain while claiming tax residency elsewhere. Foreign nationals who spend extended time in Spain, own property here, or have family and financial ties in the country should ensure their residency position is properly reviewed.
This remains particularly important for retirees, remote workers and individuals dividing time between Spain and the UK.
As always, anyone purchasing property or planning tax arrangements in Spain should obtain independent legal and tax advice based on their individual circumstances.