Terreta Spain, updated in May 2026
It has been official since June 1, 2026: the ITP (Impuesto sobre Transmisiones Patrimoniales), the main tax on the purchase of existing real estate in Spain, has been reduced from 10% to 9% in the Valencian Community. This measure stems from Law 5/2025, published in the Diari Oficial de la Generalitat Valenciana on May 31, 2025, and applies to all transactions formalized on or after June 1, 2026.
In short: If you sign the contract at the notary’s office on or after June 1, 2026, you’ll save one percentage point on your purchase.
- For a property priced at €300,000, that's €3,000 less.
- On a property worth €500,000, that comes to €5,000.
This is no small matter, given that closing costs account for an average of 10 to 13 percent of the property’s price.
Are you thinking about buying a home in Valence or elsewhere? Schedule a call with our experts.
Are you thinking about buying a property in Valencia, Madrid, or elsewhere? Contact our team of experts.
What is ITP?
The ITP (Impuesto sobre Transmisiones Patrimoniales) is a Spanish regional tax that applies to the purchase of a resale property—that is, a property that has already had a previous owner. The tax is payable by the buyer.
Key points to remember:
- The ITP applies only to used goods. For new goods, VAT (IVA) applies: 10% in most cases.
- The ITP is a regional tax: each autonomous community sets its own rate. That is why it ranges from 6% to 13%, depending on the region.
- It is calculated based on the sale price or the cadastral reference value (Cadastral Reference Value), whichever is higher.
- It must be paid within 30 business days of signing the deed of sale at the notary's office.
The Reduction in the ITP in Valencia: What the New Law Says
Law 5/2025 on Tax Measures of the Generalitat Valenciana, published on May 31, 2025, amended the ITP tax schedule in the Valencian Community, effective June 1, 2026.
The New Valencian Pay Scale
- For properties valued at up to 1 million euros, the ITP is reduced from 10% to 9%.
- For properties valued at more than 1 million euros, the ITP remains unchanged at 11%.
AJD Also Down
The AJD (Actos Jurídicos Documentados), which applies to notarized deeds—particularly in the case of a purchase financed by a mortgage—has been reduced from 1.5% to 1.4% in the Valencian Community effective June 1, 2026.
What Remains the Same
Existing reduced rates (for primary residences, first-time homebuyers, large families, and people with disabilities) remain in effect and may be applied in lieu of the general rate.
How much do you actually save?
For the purchase of an older property in the Valencian Community finalized on or after June 1, 2026:
Please note: we’d like to remind you that for amounts over €1,000,000, the rate increases to 11%.
It is the date the notarized deed is signed that matters
Good to know: To qualify for this reduced rate, the date the escritura pública (deed of sale signed at the notary’s office) is signed determines which rate applies—not the date the arras are paid. If you signed a preliminary agreement before June 1 but the deed is signed after that date, you qualify for the 9% rate.
ITP by Region: The Complete Table
The ITP varies significantly by Spanish autonomous community. Here is a comprehensive table of the general rates in effect in 2026:
| Region | General ITP Rate | Reduced tax rate for primary residence | AJD |
|---|
Note: These rates are for informational purposes only and are subject to change. Reduced rates are subject to specific conditions (income, age, family status). Always check with a local tax professional before signing.
Valencia's real estate market is becoming even more competitive
With an ITP of 9%, the Valencian Community ranks in the lower-middle range in Spain, well below Catalonia and the Balearic Islands (up to 13%), but above Madrid (6%) and Andalusia (7%).
For a foreign investor comparing several Spanish destinations, Valencia now offers:
- A more competitive tax system on purchases;
- A rapidly growing market;
- And rental returns that exceed the national average.
Are you interested in investing in Valence? Contact our team.
Why This Is Good News for Investors
The reduction of the property transfer tax (ITP) to 9% is part of an effort to make the Valencian Community more attractive to domestic and international buyers. In a context where prices are rising (+17% between May 2025 and May 2026, according to Idealista), reducing the tax burden on new buyers sends a strong signal.
In short, for the same budget, you’ve been able to buy more or spend less on fees since June 1, 2026.
Schedule a call with our experts.
Frequently Asked Questions
Does the ITP also apply to parking garages and basements?
Yes. The ITP applies to all existing real estate properties: apartments, houses, parking spaces, basements, commercial spaces, and land sold between private individuals. Please note: the rate varies depending on the type of property.
Is the ITP tax-deductible?
For an individual buyer: no. For a Spanish SL purchasing a property for rental purposes: yes, the ITP is part of the acquisition cost and can be included in the depreciable base. This is one of the advantages of the SL structure for investors. Check out our article:“Setting Up an SL for Your Investments in Spain.”
What happens if the assessed value is higher than the sale price?
The tax authorities may assess the ITP based on the cadastral reference value if it is higher than the declared price. Since 2022, the cadastral reference value (valor de referencia catastral) has been the official basis for the tax authorities. This value may be contested within four years.
Does the AJD also apply to purchases made without a loan?
The notary deed tax (AJD) applies primarily when a mortgage is taken out in conjunction with a purchase. For a cash purchase, the AJD is minimal or nonexistent, depending on the circumstances.
For more information:
– Our comprehensive guide to ITP in Spain
– The Steps Involved in Buying Real Estate in Spain
– Taxes on Real Estate Purchases in Spain
– Costs of Buying Real Estate in Spain: The Complete Guide
– Check out our comprehensive guide to the most profitable neighborhoods in Valencia
Sources: Law 5/2025, Official Gazette of the Valencian Regional Government, May 31, 2025
This article is for general informational purposes only and does not constitute personalized tax or legal advice. The tax rates and rules mentioned are those in effect as of June 2026 and are subject to change. Each situation should be reviewed with a Spanish tax attorney.
