How property purchase taxes differ between Spanish regions

Terms used

• ITP — The ITP is the regional transfer tax you pay when buying a resale home.
• IVA — The IVA is Spain's value-added tax, charged on new-build homes bought from a developer.
• AJD — The AJD is a regional stamp duty charged on the deed when you buy a new-build home.
• IGIC — The IGIC is the Canary Islands' indirect tax, used there instead of IVA.
• IPSI — The IPSI is the local indirect tax in Ceuta and Melilla, used instead of IVA.

Key rules

• Madrid resale: Madrid charges 6% transfer tax on resale homes.
• Resale or new-build: A resale home pays ITP, while a new-build pays IVA plus AJD, so check which one you are buying.
• Rates vary: The same price can cost thousands of euros more or less in tax depending on the region.
• Reduced rates: Under-35s, large families and disabled buyers may get lower rates, but with price and income limits.

Why the region changes your upfront cost

The tax on buying a home depends on where the home is. Each community sets its own rates, so the same price produces different upfront costs in different places. What you pay also depends on whether the home is resale or new-build.

• Resale home: you pay ITP, a transfer tax set by the region.
• New-build from a developer: you pay IVA on the price, plus AJD, a stamp duty set by the region.

You pay one or the other, not both. The checklist below walks you through the steps.

Resale homes: ITP by region

Madrid charges 6% on resale homes. Typical general rates elsewhere:

Catalonia applies a higher rate to part of very high prices. Extremadura uses 7% in some cases.

Example: on a €300,000 resale home, 6% is €18,000 in Madrid and 10% is €30,000 in Valencia. That is a €12,000 difference for the same price.

New-builds: IVA plus AJD

On a new-build in mainland Spain and the Balearics, IVA is 10% of the price. Up to two garages and annexes bought with the home also pay 10%.

In the Canaries, IGIC replaces IVA, at 7% on new homes. Some protected homes pay 0%. Ceuta and Melilla charge a local tax called IPSI instead, at local rates. Ask the local tax office for the current figure.

AJD is added on top, and the buyer pays it on a new-build deed. Typical regional rates:

• Basque Country, Navarre: 0.5%
• Madrid, Canaries: 0.75%
• La Rioja: 1%
• Andalusia, Balearics, Asturias: 1.2%
• Catalonia, Valencia, Aragon, Cantabria, Castilla-La Mancha, Castilla y León, Extremadura, Galicia, Murcia: 1.5%

On the mortgage deed, the lender pays the stamp duty, not you.

Reduced rates

Many regions cut the rate for under-35s, large families and disabled buyers. These usually come with a price cap, an income limit and a requirement that it is your main home.

• Andalusia: 3.5% ITP and 0.3% AJD, for homes up to around €130,000.
• Valencia: 4% ITP and 0.1% AJD, for homes up to €180,000.
• Canaries: 5% ITP, for homes up to €150,000.
• Catalonia: 5% ITP for large families and disabled buyers, within income limits.
• Aragon, Asturias, Cantabria, Castilla y León, Galicia, Murcia, Extremadura: usually 3% to 5% for under-35s or large families.

Madrid has no large young-buyer cut beyond its low 6% rate. Reduced-rate conditions change often, so ask the regional tax agency before you count on one.

Using this to choose a place

Work out the tax for your price in each region you are considering, and add it to the other purchase costs. Do this before you fall for a home, because tax alone can shift your budget by tens of thousands of euros.

Checklist

• Find out whether the home is resale or new-build, because that decides whether you pay ITP or IVA plus AJD.

• Look up the current ITP rate for the region where the home is, and apply it to the price.

• For a new-build, add IVA at 10% (IGIC at 7% in the Canaries) and the regional AJD rate to your budget.

• Check whether garages or annexes bought with the home are taxed at the same 10%.

• Ask the regional tax agency if you qualify for a reduced rate as an under-35, a large family or a disabled buyer, and check the price cap and income limit.

• Compare the total tax for the same price in each region you are considering, such as Madrid at 6% against a region at 10%.

Frequently asked questions

Do I pay both ITP and IVA when I buy?

No, Resale homes pay ITP (transfer tax). New homes from a developer pay IVA at 10% plus AJD (stamp duty) instead. The Canaries use a different tax on new homes, as covered above.

Does the mortgage add stamp duty to my costs?

Usually not: the lender pays the stamp duty on the mortgage deed. You pay stamp duty on a new-build purchase deed, at a rate set by the region, for example 0.75% in Madrid or 1.5% in Valencia.

Can I get a lower rate as a young buyer?

Yes, in many regions, if you are under 35, in a large family or disabled. For example, Andalusia charges 3.5% on homes up to about 130,000 euros, and Valencia 4% on homes up to 180,000 euros with income limits. Ask the regional tax agency about the price cap and income limit before you rely on it.