Change of the Transfer Tax in the Valencian Community in 2026
The Valencian property market is entering 2026 with important tax changes that could directly benefit both national and international property buyers. From June 1, 2026, the Generalitat Valenciana plans to reduce the general Property Transfer Tax (ITP) rate from 10% to 9% for most resale property purchases. This measure is expected to stimulate the real estate market, improve access to housing, and make the Valencian Community even more attractive for investors and second-home buyers.
What is the Property Transfer Tax (ITP)?
The ITP (Impuesto de Transmisiones Patrimoniales) is the tax paid when purchasing a second-hand property in Spain. Unlike new-build properties, which are subject to VAT (IVA), resale homes are taxed through ITP.
This tax is paid by the buyer and represents one of the biggest additional costs when purchasing a property in the Valencian Community.
Until now, the standard ITP rate in Valencia has been 10%. However, this will change in 2026.
What Will Change in 2026?
From June 1, 2026:
- The general ITP rate will decrease from 10% to 9%
- Properties valued above €1 million will continue to pay 11%
- Stamp Duty (AJD) for new-build properties will also be reduced from 1.5% to 1.4%
This means buyers purchasing resale properties after June 1, 2026, could save thousands of euros depending on the property price.
Example of Savings
| Property Price | Old ITP (10%) | New ITP (9%) | Savings |
|---|---|---|---|
| €250,000 | €25,000 | €22,500 | €2,500 |
| €500,000 | €50,000 | €45,000 | €5,000 |
| €800,000 | €80,000 | €72,000 | €8,000 |
What About Luxury Properties Over €1 Million?
An important detail many buyers overlook is that the reduced 9% rate does not apply to luxury properties exceeding €1,000,000.
For these purchases, the ITP remains at 11% in 2026.
Luxury Property Examples
| Property Price | Applicable ITP Rate | Tax Amount |
|---|---|---|
| €999,000 | 9% | €89,910 |
| €1,050,000 | 11% | €115,500 |
| €1,500,000 | 11% | €165,000 |
This is especially relevant in premium Costa Blanca locations such as Moraira, Jávea, Benissa, Altea, and Denia, where many villas and frontline properties exceed the €1 million threshold.
Important: The Official Tax Value Matters
Another key point buyers should understand is that the tax authorities may calculate ITP based on the official reference value (valor de referencia catastral) rather than only the agreed purchase price.
For example:
- Purchase price: €980,000
- Official reference value: €1,020,000
In this situation, the buyer could still be required to pay the 11% rate because the taxable value exceeds €1 million.
This makes it extremely important for buyers and investors to verify the cadastral reference value before signing a purchase contract, particularly in high-demand luxury markets along the Costa Blanca.
Who Benefits the Most?
The reduction mainly benefits buyers of second-hand homes under €1 million, including:
- Families purchasing a primary residence
- International buyers relocating to the Costa Blanca
- Investors looking for rental properties
- Retirees purchasing holiday homes
- Buyers entering the market for the first time
Popular areas such as Moraira, Jávea, Denia, Calpe, Benissa, and Altea are expected to become even more attractive due to these lower acquisition costs.
Reduced Rates for Certain Buyers Remain
In addition to the new general rate, the Valencian Community continues to offer reduced ITP rates for specific groups:
- Young buyers under 35 years old
- Large families
- Single-parent families
- Buyers with disabilities
- Purchases of protected housing (VPO)
Depending on the situation, some buyers may benefit from reduced rates as low as 3%, 4%, 6%, or 8%.
What About New-Build Properties?
For new developments purchased directly from developers:
- VAT (IVA) remains at 10%
- AJD (Stamp Duty) decreases from 1.5% to 1.4%
Although the reduction is smaller than the ITP decrease, it still represents a saving for buyers of newly built villas and apartments.
Why Is the Government Making This Change?
The objective behind the tax reduction is to:
- Encourage property transactions
- Improve housing affordability
- Attract investment to the Valencian Community
- Boost economic activity in the real estate sector
The Costa Blanca remains one of the strongest real estate markets in Spain, especially among foreign buyers from Northern Europe. Lower taxes could further increase demand in coastal areas throughout Alicante and Valencia provinces.
Important Timing: June 1, 2026
One key point buyers should understand is that the reduced rate only applies to transactions completed from June 1, 2026 onward.
Any purchase finalized before that date will still be taxed at the current 10% rate. This means timing could become an important strategic factor for buyers planning to purchase property in the Valencian Community during 2026.
Final Thoughts
The 2026 reduction of the Property Transfer Tax in the Valencian Community is excellent news for the real estate sector. Buyers will benefit from lower acquisition costs, while sellers and agents may see increased activity as more purchasers enter the market.
However, buyers of luxury properties above €1 million should remember that the 11% tax rate remains unchanged. Careful financial planning and verification of the cadastral reference value will therefore be essential before completing any purchase.
Whether purchasing a permanent residence, holiday home, or investment property, these new tax measures make the Valencian Community even more competitive within the Spanish property market.