Property Transfer Tax in Valencia Just Dropped to 9%: What It Means for You

If you are buying a resale property in the provinces of Alicante, Valencia or Castellon, here is the headline: the property transfer tax, the ITP, is now 9 percent instead of 10. The lower rate applies to purchases completed from 1 June 2026 onwards, and it comes from the Valencian regional law Ley 5/2025. On a typical purchase that is thousands of euros staying in your pocket.

But that is just the headline. There is a 1,000,000 euro line where the rate jumps to 11 percent, a very specific rule about which date counts, and a detail about how the taxable amount is calculated that catches a lot of foreign buyers by surprise. So let me walk you through all of it.

My name is Daniel Bertomeu and I work alongside my father Juan Bertomeu, a lawyer with more than 30 years of experience. We are independent lawyers and tax advisors with offices in Moraira and Denia, in the province of Alicante, and we work mostly with international clients buying on this coast. When the new rate kicked in I recorded a short video about it for our German-speaking clients, and you can watch it here if you prefer German.

What exactly changed on 1 June 2026

The ITP, in Spanish Impuesto sobre Transmisiones Patrimoniales, is the tax you pay when you buy a second-hand property in Spain. It is a regional tax, so every autonomous community sets its own rate. In the Comunitat Valenciana, which covers Alicante, Valencia and Castellon, the general rate was 10 percent for years.

Now, the regional government approved Ley 5/2025, and its article 33 cuts the general rate to 9 percent. The important part is the wording of that article: the 9 percent applies to taxable events accrued from 1 June 2026 inclusive. In plain English, if your purchase completes on or after that date, you pay 9 percent. If it completed before, you paid 10 percent. Simple as that.

And to be clear, because a second regional law arrived this summer and it is a question that comes up a lot: the Ley 3/2026, in force since July, does not touch this rate. As far as the transfer tax is concerned, it only adjusts the wording of some reduced rates for buyers with a recognised disability. The 9 percent stands.

Let me show you with real numbers

Take a resale apartment in Valencia city for 800,000 euros. Under the old rate, the ITP was 10 percent, so 80,000 euros in tax. Under the current rate it is 9 percent, so 72,000 euros. Same property, same price, and you pay 8,000 euros less than a buyer who completed in May 2026.

Same logic on a smaller budget. A 350,000 euro townhouse in Denia now carries 31,500 euros of ITP instead of 35,000. That is 3,500 euros saved.

The 1,000,000 euro line, and why it is not new

Now, second scenario. You are buying a villa in Moraira, Javea or Altea for 1,200,000 euros. Here the reform does not help you at all, because when the value of the property goes above 1,000,000 euros, the rate is 11 percent. And be careful with how this works: the whole purchase is taxed at 11 percent, not just the part above the million. On 1,200,000 euros that is 132,000 euros of ITP.

One thing worth being clear about, because it causes a lot of confusion: this 11 percent band is not part of the 2026 reform. It has existed since 1 January 2023. The only thing that changed on 1 June 2026 is the general rate below the million, from 10 to 9 percent. Above the million, nothing moved.

Okay, Daniel, so what if I buy the villa and the plot next door as two separate purchases of 600,000 euros each, and I stay under the million twice? Well, the law thought of that before you did. Article 13.Ocho of the regional tax law (Ley 13/1997, the same article the 2026 reform amended) says that purchases related to the same registered property, made from the same seller within three years, are treated as a single transaction. So 600,000 plus 600,000 becomes 1,200,000, and the whole thing lands on the 11 percent. Do not build your plan on splitting the deal.

The date that counts is the deed, not the deposit

This is a very common question, so let me be very precise. The cut-off is the accrual date, which for a property purchase means the date of the transmission, in practice the day you sign the public deed at the notary. It is not the date of the arras, the private deposit contract. It is not the date you transferred the money. It is not the date you file the tax form.

So if you signed an arras contract in April 2026 and completed at the notary on 15 June 2026, congratulations, your purchase accrued after 1 June and you pay 9 percent. And the reverse is also true: a deed signed on 20 May 2026 pays 10 percent even if you filed the tax in June. The deed date decides everything.

You do not always pay 9 percent on the price you paid

Here is the detail that surprises almost every foreign buyer. The base of the ITP is not automatically the price on your contract. For some years now, Spain uses the valor de referencia, a reference value that the Catastro assigns to each property. The rule is that you pay tax on the higher figure: the reference value, the declared value or the agreed price, whichever is the largest.

Let me give you an example. You negotiate well and buy a house in Calpe for 300,000 euros, but the Catastro reference value of that house is 320,000 euros. Your ITP is 9 percent of 320,000, which is 28,800 euros, not 9 percent of 300,000. In our experience this is one of the first things worth checking before you make an offer, because it changes your real budget. The reference value is public and can be checked in advance.

Why the reduced rates are probably not for you

If you start reading Spanish sources you will see reduced ITP rates of 8, 6, 4 and even 3 percent for certain buyers. The honest answer for most readers of this blog: those rates are almost never available to a non-resident. They are built around the concept of vivienda habitual, your main home under Spanish income tax rules, and most carry income limits from the Spanish IRPF on top.

So if you are buying a holiday home or an investment property while living in the UK, Germany or the Netherlands, your rate is the general one. That means 9 percent, or 11 percent above the million. I would love to tell you otherwise, but I think it is my duty to talk according to the law, and planning your budget on a reduced rate you will not get is a bad start.

And if you are buying a new build, forget the ITP

One last clarification, because people mix these two constantly. The ITP is only for resale properties. If you are buying a new build directly from the developer, you do not pay ITP at all. You pay 10 percent VAT, which is a national tax and did not change, plus the stamp duty called AJD.

By the way, the same regional law also cut the AJD, from 1.5 percent to 1.4 percent, again for purchases completing from 1 June 2026. And no, if you buy a resale you do not pay AJD on top of the ITP. It is one or the other, never both on the same purchase. Adding 1.4 percent on top of the 9 percent is probably the most common calculation mistake in foreign buyers' budgets.

So, what should you do with all this

If you are in the middle of a purchase in Alicante, Valencia or Castellon right now, the numbers are working in your favour compared to anyone who completed before June 2026. Just remember the three checks before you sign anything: confirm the deed date is what drives your rate, check the Catastro reference value against your price, and if you are anywhere near the million mark, look carefully at how the deal is structured, because the 11 percent takes no prisoners.

If you want the full picture of the whole buying process, taxes included, we wrote a complete guide on buying property in Spain as a non-resident that walks through every step. And if you are looking at a specific property and you want the numbers checked before you commit, contact us and we will run the numbers for that specific purchase. This is the coast we work on.

One last thing. Everything above is general information based on the rules in force in July 2026, not personal tax advice for your specific case. Juan makes me say it, because this is a law firm. But it is also simply true: rates, reference values and personal circumstances change case by case, so have your numbers checked before you sign.