What taxes are paid when buying a property in the Comunidad Valenciana?

Buying a property in the Comunidad Valenciana involves assuming certain tax expenses that should be known in advance. From direct taxes such as VAT or ITP, to notary and registration fees, the buyer must be clear on how much they are going to pay and why. In this article we detail all the taxes involved in a real estate transaction in this autonomous community.

Taxes depending on the type of property

The first major fiscal distinction depends on whether the property is new construction (obra nueva) or second-hand. This determines the main tax applied to the transaction.

New property: VAT and AJD

When buying a new property directly from a developer, VAT (Value Added Tax) is paid, which in the Valencian Community is 10 % of the purchase price. In addition, AJD (Stamp Duty – Actos Jurídicos Documentados), a regional tax, must also be paid, which in 2025 stands at 1.5 %.

For example, if you buy a new property for €300,000, you would pay €30,000 in VAT and €4,500 in AJD, making a total of €34,500 in taxes.

Resale property: ITP

If the property is second-hand, the buyer must pay ITP (Property Transfer Tax – Impuesto de Transmisiones Patrimoniales). In the Comunidad Valenciana, the general rate for 2025 is 10 % of the deeded value up to a purchase price of €1 million, and 11 % if the purchase price exceeds €1 million, although there are special cases that may benefit from a reduced rate.

Reduced ITP rates in 2025

There are allowances in ITP for certain buyer profiles or types of property. In some cases, tax can be reduced to 8 % or even 6 %, if certain requirements are met.

ITP at 8 %
Applies to individuals purchasing their primary residence with a price below €248,000 and whose annual income does not exceed €25,000 individually or €40,000 jointly.

ITP at 6 %
Available for large families, people with disabilities or buyers under 35 years of age acquiring their primary residence, always within established income and price limits.

Stamp Duty (AJD)

AJD is a regional tax that applies both to new property purchases and to transactions subject to a mortgage loan. The general rate in the Comunidad Valenciana is 1.5 %, although it may be reduced to 0.1 % in very specific cases (such as mortgages for a primary residence for young people or people with disabilities).

Taxable base of AJD
The taxable base varies depending on the type of transaction. If it is a purchase, it is calculated on the purchase price. If it is a mortgage, it applies to the mortgage liability, which includes principal, interest and other items.

Municipal Plusvalía Tax (IIVTNU)

The municipal plusvalía, or Tax on the Increase in Value of Urban Land (Impuesto sobre el Incremento de Valor de los Terrenos de Naturaleza Urbana), taxes the increase in land value since the last transfer. Although it is paid by the seller, the buyer should take it into account, since if the seller is not fiscally resident in Spain, this tax will be directly charged to the buyer.

Calculation and liability
Since 2022, this tax can be calculated by two methods: the objective method (based on coefficients) and the real method (based on actual gain). The taxpayer may choose whichever is more favourable. If the property has lost value, no tax is due.

Notary and registry fees

Although not taxes in the strict sense, notary and registry fees are part of the fiscal outlay when buying a property. In general, the buyer assumes these costs, which vary depending on the price and the length of the deed.

Notary
The average cost of the deed of sale usually ranges between €800 and €1,500, depending on the value of the transaction. Mortgage deeds also generate additional notary fees.

Land Registry
Registering the sale at the Land Registry has an approximate cost of 0.2 % to 0.4 % of the property price.

Fiscal expenses if there is a mortgage

When the purchase is financed with a mortgage, the buyer assumes specific expenses associated with this loan, although some taxes have changed following the new mortgage law.

Taxes paid by the bank
Since 2019, the bank pays the AJD on the mortgage deed. However, the buyer still assumes other expenses such as valuation, agency fees and part of the notary.

Property valuation
The official valuation, necessary to request a mortgage, usually costs between €300 and €600, depending on the financial institution and location.

Annual taxes after purchase

After buying, the new owner must pay a series of recurring taxes for owning the property, whether municipal, regional or state.

IBI (Property Tax – Impuesto de Bienes Inmuebles)
An annual tax levied on property ownership. Its amount depends on the cadastral value and the municipality. In coastal towns such as Altea or Benissa, it can range between €500 and €1,500 annually.

Waste collection fee
In many municipalities, there is an additional charge for waste collection, which ranges between €100 and €250 annually.

IRNR – Non-Resident Income Tax
If the buyer is not a tax resident in Spain and does not rent out the property, they must declare an imputed income under IRNR (Impuesto de la Renta de No Residentes). This is calculated as 1.1 % or 2 % of the cadastral value, depending on the update.

Other important tax aspects

In addition to the main taxes, it is important to know other factors that may affect the final cost or generate tax obligations in the medium term.

Declaration of market value
Since 2022, the Tax Authority can verify whether the deeded value matches the reference market value published by the Cadastre. If a lower value is declared, the buyer may be sanctioned and obliged to pay the difference in ITP or AJD.

Donations and inheritances
If the property is acquired by donation or inheritance, ISD (Impuesto de Sucesiones y Donaciones – Inheritance and Gift Tax) applies, with specific regional regulations. In the Comunidad Valenciana, there are allowances for direct descendants and spouses, but each case must be reviewed individually.

Can any tax be deducted?
In general, taxes paid when purchasing a primary residence are not deductible in the IRPF income tax return, unless the buyer had pre-2013 acquired rights. However, expenses may be included as part of the acquisition value for future sales, reducing taxable capital gains.

Investment property cases
If the property is purchased for rental or investment, some expenses may be deductible in IRPF or IS (Corporate Tax), depending on the buyer’s tax status.

Tips for planning the tax burden

Buying a property in the Comunidad Valenciana may involve an additional 10 % to 13 % on top of the price, depending on the type of property, buyer profile and whether a mortgage is involved. Proper planning of tax expenses is key to avoiding surprises.

Consult professionals
Before signing any contract, it is advisable to consult a tax advisor specialised in property transactions. At AREA Costa Blanca, we have experience and technical expertise to guide clients from the very first step.

Compare scenarios
It is not the same to buy a new property as a resale, or to pay in cash versus with a mortgage. Analysing different scenarios in advance allows the best choice in fiscal terms.

AREA Costa Blanca’s opinion

At AREA Costa Blanca we help dozens of foreign buyers every year to understand the real taxes and costs of buying in the Comunidad Valenciana. Our approach combines clarity, legal experience and personalised support throughout the entire process. We know that a smooth purchase starts with good tax information. That is why we work with transparency and foresight, so that every client makes informed and risk-free decisions.