Why Foreign Buyers Keep Choosing Alicante (a View From the Ground)

Since the 1st of June 2026, buying a resale property in Alicante, Valencia or Castellón is taxed at 9 percent instead of 10. That is the headline, but honestly, it is just the headline. In the last few years this region has quietly done three things with its taxes that, put together, make it one of the most attractive corners of Spain either to buy a property or, if you already own one, to move here for good.

So, a bit about who is writing this. My name is Daniel Bertomeu and I work alongside my father Juan Bertomeu, a lawyer with offices in Moraira and Dénia and more than 30 years of experience with international clients. We are independent lawyers and tax advisors, and property purchases for non-residents are what we do every week. I also made a video on this exact topic, so if you prefer to watch me explain it on camera, it is here.

Now, three reasons. Property taxes, inheritance, and the wealth tax. Let's go.

Reason one: the property transfer tax dropped to 9 percent

Basically, the ITP, the Spanish property transfer tax, dropped from 10 percent to 9 percent in the Valencia region for purchases completed from the 1st of June 2026 onwards. So if you buy a 500,000 euro resale property today, you pay 45,000 euros in transfer tax instead of 50,000, assuming the price is at or above the property's official Catastro reference value, which is the minimum tax base. That is 5,000 euros staying in your pocket compared with May 2026.

But this reduction does not apply to every property or every situation, so let me give you the two conditions that matter.

Condition one: it only applies to resale homes. If you buy a brand new house directly from a developer, what we call obra nueva, you do not pay ITP at all. You pay 10 percent VAT plus stamp duty, which in this region is 1.4 percent. So the 10 to 9 cut is for the second hand market only.

Condition two: it only applies up to one million euros, and this is where most people get it wrong. The 9 percent rate applies while the property value stays at one million or below. The moment the value goes over that line, the entire purchase is taxed at 11 percent. Not just the part above the million. The whole thing. And by the way, that 11 percent band is not new; it has existed since 2023.

In our experience, the clearest winners of this reduction are apartments along the coast, especially in the south of Alicante province and in Castellón, where prices are lower than here in the north Costa Blanca, and detached villas outside the prime spots. Now, what are prime spots? Well, in Moraira, Jávea or Altea it is very common to see properties above one million euros. Those houses will not benefit from the cut.

One more thing, because I really want to warn you about something you could easily be tempted by. Let's say you agree with the seller to declare 900,000 euros on a house that is really worth 1.2 million. Do not do it. It is illegal, of course, but there is also a practical reason: the tax is calculated on the official reference value from the Catastro when that value is higher than the price. The tax office will simply regularise you at 11 percent on the real value, plus a financial penalty on top. It is not worth it.

Also, a small but important detail on timing. The cut applies to purchases where the transfer happens from the 1st of June 2026. What counts is the date you sign the deed, not the date of your reservation contract or when you paid the deposit.

Reason two: an inheritance tax that respects the family

Really, in my opinion, this is the biggest reason to buy in Alicante, Valencia or Castellón, or to move here, especially if you are above 60 and you have children or grandchildren. Let me explain you why.

Since May 2023, when you inherit from your closest family in this region, meaning parents, children, grandparents, grandchildren or your spouse, you receive a 99 percent reduction on the inheritance tax bill. In plain words: you pay roughly 1 percent of what the tax would otherwise have been.

Let me show you what that means. Take a house worth 500,000 euros, the same mid range property from before. Your father leaves it to you. Before this rule, the inheritance tax on a property like that could run well into five figures for many families, depending on the exact valuation and the heir's situation. Enough, in some cases, to force a family to sell the very house the parent spent a lifetime paying for. With the 99 percent reduction, you pay roughly 1 percent of whatever that bill would have been.

And there is more news. From the 1st of June 2026 the door opened to a second group: brothers and sisters, uncles and aunts, nephews and nieces. They now receive a 25 percent reduction on inheritance tax, and from the 1st of June 2027 that reduction climbs to 50 percent. Same half million property, different scenario: your brother inherits it. Without any reduction, his bill would be far heavier than a child's, because siblings do not enjoy the family scale that close relatives get. With the 25 percent reduction, a quarter of that bill disappears, and with the full 50 percent from June 2027, half of it. Exactly how a relative qualifies has its own fine print, so this is one to confirm case by case before you count on it.

Two more important things. First, these reductions also apply to gifts, for example a parent gifting a property to a child while alive, provided the gift is formalised in a public deed before a notary. Second, and this is the question everyone asks me: yes, this applies whether you are a Spanish tax resident or a non-resident. This was settled at European level, and non-residents have the right to apply the regional rules. There is fine print here too. The relief follows where the bulk of the Spanish assets sit, non-residents file with the national tax agency rather than the regional one, and the inheritance has to be declared on time. But the 99 percent itself is available to foreign families, and that is a big deal.

Reason three: the wealth tax got friendlier

Now, if you are from America, the Netherlands or Germany, you might find it strange that Spain taxes you just for owning assets. It exists, and it is called the wealth tax. Spanish tax residents pay it on their worldwide wealth: houses in or outside Spain, bank accounts, investments, everything. Non-residents only pay it on the assets they own in Spain, which usually means the property and maybe a bank account.

So what changed? Until recently, the exempt minimum in the Valencia region was 500,000 euros per person. From the 2025 wealth tax year, the one declared in 2026, that minimum doubled to one million euros per person for residents of the region. For a married couple living here, that is two million euros combined before this tax touches them.

Okay, Daniel, but I am a non-resident. Does the million apply to me? Well, no, and I want to be very clear because most people get this wrong. As a non-resident you fall under the state rules, and the state exempt minimum is 700,000 euros per person. Do not assume the Valencian million transfers to you automatically, because it does not.

There is one more piece, and it matters for a very specific type of person. Spain has a cap, often called the 60 percent rule, that limits your combined income tax plus wealth tax to 60 percent of your taxable income. When the combined bill goes beyond that, your wealth tax is reduced, and the reduction can reach up to 80 percent of the wealth tax bill. Never more than 80 percent, so you always pay at least a fifth of it. Honestly, it took me a long time to understand this rule properly.

For years this cap was only applied to residents. That changed very recently: the Spanish Supreme Court ruled in late 2025 that non-residents have the right to it too, and the tax agency has applied that criterion since spring 2026. Now, let me be honest with you: this shield only bites if you have high wealth and low income. Think of a widow living here with a paid off house and savings built over a lifetime, but a modest pension as her only income. For her, the cap can cut the wealth tax bill by up to 80 percent. For a typical holiday home owner with a normal income, it usually changes nothing.

And not everything is good news. Spain also has a solidarity tax on large fortunes that can affect wealth in Spain above three million euros. My honest opinion: if your wealth is up to around three million, the numbers in this region now look very convenient. Above that, you simply need a good tax advisor to run your numbers before you decide. There is also the Beckham regime for people who move here to work, which can keep your foreign assets out of the Spanish wealth tax (you would still pay it on what you own in Spain), but it has strict conditions and deserves its own conversation.

So, is it worth living in Alicante?

I would say taxes in Spain are relatively high. But now that I know a lot of foreign clients, I would also say taxes are high all across Europe, and this region has made three deliberate moves in the buyer's favour: a lower purchase tax, an inheritance tax that respects the family, and a wealth tax that leaves ordinary estates alone. Very few places in Europe combine that with 300 plus days of sun.

If you are thinking about buying here, start with our guide to buying property in Spain as a non-resident, which walks through the whole process step by step. And if you are already narrowing down towns, we keep local guides for the two places where we have our offices, Moraira and Dénia. If you want help with a purchase or with planning around inheritance and wealth tax, you contact us, we give you a price, and if you accept it, we help you.

One last thing. Everything above is general orientation, not tax or legal advice for your specific situation, because every family and every property is different. Juan makes me say it, because this is a law firm.