When you buy a resale property in Spain, the biggest single tax you’ll pay is ITP. Here’s what it is, how much it costs, and when it applies.
When I was calculating the cost of buying my Alicante flat, the single largest additional expense after the purchase price was a tax I hadn’t fully anticipated: ITP. It’s the Spanish equivalent of stamp duty — but the rate is higher than most UK buyers expect.
What is ITP?
ITP — Impuesto sobre Transmisiones Patrimoniales — is the property transfer tax paid when buying a resale property in Spain. It applies to second-hand properties purchased from a private seller, as opposed to new builds which are subject to IVA (VAT) instead.
For the vast majority of UK buyers purchasing existing apartments or houses in Spain, ITP is the tax that applies.
How Much is ITP?
ITP is a regional tax, which means the rate varies depending on which autonomous community the property is in. In the Valencia region — which covers Alicante, Valencia city, and Castellón — the standard rate is 10% of the purchase price.
On an €85,000 property, that’s €8,500 in tax alone. On a €200,000 property, €20,000. It is not a small number and needs to be budgeted for from the start.
Other regions have different rates — Andalusia charges 7%, Madrid 6%, Catalonia up to 10%. Always check the rate for the specific region you’re buying in.
When is ITP Due?
ITP must be paid within 30 days of completion. It is filed and paid via Modelo 600 — a tax declaration submitted to the regional tax authority. In practice your gestor handles this on your behalf as part of the post-completion process.
Missing the 30 day deadline results in surcharges and interest, so it’s important your gestor is instructed and ready to file promptly after completion.
Is ITP Based on the Purchase Price or Cadastral Value?
Officially ITP is calculated on the declared purchase price — what you actually paid. However, the Spanish tax authority can challenge this if they believe the declared price is significantly below the property’s real market value. They may apply a minimum reference value (valor de referencia) introduced in 2022, and charge ITP on whichever is higher.
In practice, for a straightforward purchase at a realistic market price this is rarely an issue. Your gestor will flag any concern.
ITP vs IVA — New Build vs Resale
If you’re buying a new build property directly from a developer, ITP doesn’t apply. Instead you pay IVA (Spain’s VAT) at 10% on residential properties, plus a separate stamp duty (Actos Jurídicos Documentados — AJD) of around 1.5% in the Valencia region.
The total tax burden is similar either way. The key distinction is whether you’re buying from a private seller (ITP) or a developer (IVA + AJD).
The Bottom Line
ITP is unavoidable when buying a resale property in Spain and at 10% in the Valencia region it’s a significant cost. Budget for it from the start, instruct your gestor to file Modelo 600 promptly after completion, and factor it into your overall purchase calculations.
Want to see all the costs of a Spanish property purchase in one place? The Real Costs of Buying Property in Alicante breaks down every expense including ITP with actual figures from a real purchase.