Legal & Tax · 8 min

Valencia Community Cuts Property Transfer Tax to 9%: What Resale Buyers Save

20 May 2026 · Hansson & Hertzell

The Valencia Community has reduced ITP — the tax on resale property purchases — from 10% to 9% from June 2026. On a €300,000 property, that's €3,000 back in your pocket.

The Valencia Community government has reduced the Impuesto de Transmisiones Patrimoniales (ITP) — the transfer tax applied to resale property purchases — from 10% to 9%, effective June 2026. This is a meaningful change for anyone buying a resale property on the Costa Blanca, which falls entirely within the Valencia Community.

We always recommend buyers confirm current tax rates with their independent Spanish lawyer before exchange, but this reduction is a genuine positive development for the resale market.

What ITP Is and Who Pays It

ITP is the property transfer tax paid by the buyer on all resale (second-hand) property transactions. It applies to any property that has been previously owned and is being transferred between parties. It is one of the main costs of buying property in Spain beyond the purchase price.

ITP does not apply to new-build properties. New builds are subject to IVA (VAT) at 10% plus AJD stamp duty at 1.5%. The ITP reduction only affects resale buyers.

What You Actually Save

The 1% reduction sounds small. On larger purchases it is not:

| Purchase Price | Old Tax (10%) | New Tax (9%) | Saving | |---------------|--------------|--------------|--------| | €150,000 | €15,000 | €13,500 | €1,500 | | €250,000 | €25,000 | €22,500 | €2,500 | | €350,000 | €35,000 | €31,500 | €3,500 | | €500,000 | €50,000 | €45,000 | €5,000 | | €750,000 | €75,000 | €67,500 | €7,500 |

For buyers purchasing a €400,000 resale villa — one of the most common price points in our market — the saving is €4,000. That covers a year of community fees, a kitchen renovation, or simply stays in your account.

The Full Cost Picture for Resale Buyers (Updated)

Buying a resale property in the Valencia Community now costs approximately:

• ITP: 9% (was 10%)
• Notary fees: 0.5–0.8%
• Land registry fees: 0.3–0.5%
• Independent legal fees: 0.5–1%
• Total additional costs: approximately 11–12% (was 12–13%)

On a €300,000 purchase, you should budget around €33,000–€36,000 in total additional costs beyond the purchase price.

Does This Make Resale More Attractive vs New Build?

The tax gap between resale (ITP) and new build (IVA + AJD) remains:

• Resale: 9% ITP + ~1% fees = ~11% total additional costs
• New build: 10% IVA + 1.5% AJD + ~1% fees = ~12.5% total additional costs

The gap has narrowed slightly with this reduction, but resale was already marginally cheaper on tax. The bigger differences remain elsewhere: resale gives you an established property in a known neighbourhood with real comparable prices; new build gives you modern energy standards, customisation, and a developer warranty.

Timing Your Purchase

If you were close to signing on a resale property and had budgeted at 10% ITP, you now have three options: keep the saving in cash, use it to reduce your offer slightly, or apply it to initial renovation costs. In practice, many of our buyers who've heard about the reduction are using the news as a prompt to move forward on properties they'd been deliberating over — the saving removes a meaningful chunk of hesitation.

What This Means for the Costa Blanca Market

Tax reductions of this kind tend to stimulate transaction volume more than prices, at least in the short term. More buyers who were sitting on the fence find the arithmetic works. Sellers who'd been frustrated by low offers see more credible buyers engaging. We expect activity through Q3 2026 to be strong partly as a result of this change.

Our Recommendation

If you've been tracking a property and the budget has been tight, speak to us now. The 1% reduction may be exactly what makes the numbers work. If you're planning a purchase later in 2026, confirm the current rate with your lawyer — tax regulations can change and your independent legal advisor should be your primary source.

We're available for a confidential discussion about any property on our portfolio or the wider market. Contact us directly.

Frequently Asked Questions

What is ITP and why is Valencia reducing it?

ITP (Impuesto de Transmisiones Patrimoniales) is the transfer tax paid when buying a resale property in Spain. Valencia is reducing it from 10% to 9% from 1 June 2026 to attract buyers, compete with cheaper regions like Andalusia, and stimulate the property market.

How much will I save with the Valencia ITP reduction?

On a €250,000 property, you save €2,500. On €400,000, you save €4,000. On €600,000, you save €6,000. The new 9% rate applies to the full purchase price, so the saving scales directly with the property value — real money on any significant purchase.

Does the ITP reduction apply to new build properties?

No. New build properties in Spain are subject to IVA (VAT) at 10% plus AJD (stamp duty) at 1.5% — a total of 11.5%. The ITP reduction only applies to resale (second-hand) properties where the seller is a private individual or non-developer entity.

When exactly does the 9% ITP rate come into effect?

The new rate applies from 1 June 2026. The determining date is the notarial signing date (escritura), not when you reserve or exchange contracts. If your signing is scheduled before 1 June, you will pay the old 10% rate — worth negotiating the date if you are close to the deadline.

Does the ITP reduction apply across the whole of Costa Blanca?

Yes. The entire Costa Blanca falls within the Valencian Community (Comunitat Valenciana), which includes the provinces of Alicante, Valencia, and Castellón. All resale property purchases in Alicante province — which covers the Costa Blanca — benefit from the reduction.

How does Valencia's ITP compare to other Spanish regions?

Andalusia (Málaga, Marbella) charges 7% ITP. Murcia (Mar Menor) charges 8%. Valencia now charges 9%. The Canary Islands charge 6.5%. So Valencia remains slightly above the cheapest regions but significantly below the old 10%, making it more competitive for buyers comparing across Spain.

Do I still need a lawyer if buying at the new lower tax rate?

Absolutely. The tax reduction makes buying more affordable but doesn't change the legal process. You need an independent Spanish lawyer to check title deeds, confirm no debts or charges, review contracts, and oversee the notarial signing. Legal fees (around 1% of purchase price) are a small price for security.

Can I buy now and sign later to take advantage of the lower rate?

Yes. Many buyers sign a private purchase contract (contrato de arras) now — typically with a 10% deposit — and schedule the notarial signing for after 1 June 2026. This locks in the property at today's price while qualifying for the lower ITP. Discuss timing with your lawyer.

What other costs should I budget for beyond ITP?

Beyond ITP at 9%, budget for: notary fees (€600–1,500), land registry (€400–900), independent legal fees (around 1% of purchase price), and bank transfer costs if sending funds from abroad. Total acquisition costs: approximately 11–12% above the purchase price for resale properties.

Is now a good time to buy on the Costa Blanca given the ITP change?

The ITP reduction is a meaningful cost saving, but timing should also consider the broader market. Costa Blanca property values have grown 6–9% annually in recent years. Waiting for the tax saving while prices rise may cost more than it saves. The best approach is to find the right property, then time the signing strategically if near the June date.

Does ITP apply if I buy through a company or SL?

If you buy a property as a business asset through a Spanish SL (Sociedad Limitada), the transaction structure and applicable taxes differ. In some cases, IVA applies rather than ITP. This is a complex area — always take specialist tax advice before structuring a purchase through a company.

What is plusvalía and does the ITP reduction affect it?

Plusvalía (Impuesto sobre el Incremento del Valor de los Terrenos de Naturaleza Urbana) is a land value tax paid by the seller, not the buyer. It is based on the official land value increase over the period of ownership. The ITP reduction only affects the buyer's tax liability — it has no bearing on plusvalía.

How do I prove I qualify for the 9% ITP rate?

The notary records the date of the transaction and the applicable tax. You simply need to sign after 1 June 2026. There is no separate application or declaration — the tax return (Modelo 600) filed with the Valencian tax authority (ADIF/ATCV) will automatically apply the rate in force on the signing date.

Are there any conditions or income thresholds attached to the new 9% rate?

No. Unlike some regional ITP reductions (which apply only to first-time buyers, young buyers, or properties under a certain value), Valencia's reduction to 9% is universal — it applies to all buyers, any nationality, any purchase price, for resale properties in the region.

Where can I find out more about buying on the Costa Blanca?

Hansson & Hertzell are resale specialists across the full length of the Costa Blanca. We work with trusted independent lawyers, mortgage brokers, and tax advisers. Contact us for a free consultation on buying in the current market.