Whether you’re acquiring a sleek modern apartment by the coast or investing in a bespoke villa in the hills, buying property in Spain involves several region-specific taxes. The obligations vary depending on whether you are purchasing a new build directly from a developer or a resale property from a private individual. Additionally, the location of the property significantly impacts your final tax burden, with each autonomous region setting its own tax rates.
This guide explains the applicable taxes in Comunidad Valenciana (Costa Blanca), Murcia (Costa Cálida), and Andalucía (Costa del Sol), with an emphasis on clarity for both regular and luxury buyers.
Taxes on New Build Properties
A new build property in Spain is one that is purchased directly from a developer or builder and has never been previously occupied. These transactions are considered commercial sales, and as such, they are not subject to transfer tax (ITP), but to Value Added Tax (IVA) and Stamp Duty (AJD).
Comunidad Valenciana (Costa Blanca)
In Comunidad Valenciana, a buyer pays 10% IVA on the declared purchase price of a new build property. In addition to this, Stamp Duty (AJD) is charged at 1.5%.
However, there is a notable exception: if the buyer intends to use the property as a permanent residence and meets strict criteria (such as income level, property value threshold, and registration within a specific period), AJD can sometimes be reduced or even waived entirely. These exemptions are complex and should be evaluated case by case with a local legal expert.
For high-end homes, while the tax rate remains the same, the overall tax paid becomes significant due to the higher base value of the property. There is no room to negotiate on VAT or AJD, and prices are generally non-negotiable with developers, especially in prime locations.
Murcia (Costa Cálida)
Murcia also imposes 10% IVA on new build properties. Stamp Duty (AJD) is applied at 2%, which is higher than in most other Spanish regions.
This means the combined tax for new build purchases in Murcia is 12% of the declared sale price. For buyers considering newly constructed homes, it’s important to factor this into the total acquisition budget, particularly as the region does not offer AJD reductions as widely as Valencia.
Andalucía (Costa del Sol)
In Andalucía, buyers of new builds pay the standard 10% IVA. The AJD rate is currently 1.2%.
Although the overall tax burden is slightly lower than in Murcia, Andalucía’s popularity among both national and international buyers—particularly in the luxury sector—means that upfront taxes still represent a considerable amount. These rates apply to the dwelling itself as well as to any annexes such as storage rooms, parking spaces, or additional land included in the sale.
Taxes on Resale Properties
Resale properties, or second-hand homes, are not subject to IVA or AJD. Instead, they incur Transfer Tax (Impuesto de Transmisiones Patrimoniales, ITP). This tax is determined by the region in which the property is located and can vary significantly.
Comunidad Valenciana (Costa Blanca)
In Comunidad Valenciana, the standard ITP rate is 10% of the purchase price or the property’s assessed minimum fiscal value, whichever is higher.
However, in 2023, the regional government introduced a higher ITP rate of 11% for luxury properties valued at over €1 million. This additional tax tier targets high-end transactions and is important to consider for investors and second-home buyers operating in the upper market segment.
As with new builds, tax authorities will often assess the property against an indexed “minimum value” to ensure the declared sale price is not artificially low. If they find discrepancies, they can revise the ITP upward.
Murcia (Costa Cálida)
Murcia applies a flat 8% ITP on resale property transactions, one of the more affordable rates across Spain. There is no progressive scale, and the same rate applies regardless of property value.
This flat rate is particularly attractive for both regular and high-value transactions. It simplifies budgeting and reduces the comparative burden for buyers investing in larger, more expensive homes.
As in other regions, Murcia may review the declared value against its own internal appraisal models to confirm that the correct ITP has been applied.
Andalucía (Costa del Sol)
Andalucía offers one of the most buyer-friendly ITP regimes in Spain. In 2021, the regional government introduced a flat 7% ITP rate for all resale property purchases, replacing the previous progressive scale that ranged from 8% to 10%.
This single-rate system benefits luxury buyers most, as they now pay significantly less tax on high-end property purchases than they did under the former model. For example, a €2 million villa now incurs €140,000 in ITP, compared to €180,000 under the old progressive scale.
The simplified approach also speeds up transaction timelines and reduces complications with tax recalculations after closing.
Additional Costs in All Regions
Beyond the taxes mentioned above, property buyers should be prepared for a set of standard purchase-related costs, regardless of region:
- Notary fees: Vary with the property value and complexity; usually range from €600 to €1,000.
- Land Registry fees: Around 0.1% to 0.5% of the purchase price.
- Administrative (gestoría) fees: Often between €300 and €600 for document handling and tax filing.
- Mortgage fees (if financing): May include appraisal, registry, and notary costs. Since recent reforms, banks usually absorb many of these costs, but this should be verified in advance.
Ongoing Tax Obligations After Purchase
Owning property in Spain also comes with annual tax responsibilities:
- IBI (Impuesto sobre Bienes Inmuebles): A municipal property tax based on cadastral value. Typically between 0.4% and 1.1% annually.
- Basura or Residuo Sólido Urbano: Waste collection tax charged by the municipality.
- Non-Resident Income Tax (IRNR): If you are not a Spanish resident, you are liable for an annual tax based on either rental income (if the property is let) or a notional value (if kept vacant).
- Wealth Tax (Impuesto sobre el Patrimonio): May apply to high-net-worth individuals, especially if total assets in Spain exceed certain thresholds. Some regions like Madrid offer reductions or exemptions, but Comunidad Valenciana and Andalucía have reinstated or modified this tax periodically.
Key Takeaways for Regular and Luxury Buyers
While regular buyers are more likely to be affected by affordability thresholds and local incentives, luxury buyers must pay close attention to region-specific tax tiers, particularly for resale properties. For instance:
- A €300,000 resale flat in Murcia incurs just €24,000 in ITP (8%).
- A €2.5 million villa in Comunidad Valenciana could attract an ITP of €275,000 (11%).
- A €1.8 million new build in Marbella would trigger €180,000 in IVA and €21,600 in AJD (at 1.2%).
In each case, the choice of region can impact not only your lifestyle but your tax exposure. A well-informed buyer, guided by a qualified legal and tax advisor, can strategically select locations and structures that optimize both short-term costs and long-term ownership liabilities.
As specialists in real estate along the Spanish Costas. At Akunas we will be delighted to assist you with any inquiry you may have. Don’t hesitate to get in touch with us here — bespoke service has never been more accessible.