Spanish Property Transfer Tax (ITP) by Region Complete Guide

What is ITP (Impuesto de Transmisiones Patrimoniales)?

ITP is the property transfer tax paid by buyers when purchasing resale real estate in Spain.

Key facts:

• Who pays: The buyer (not the seller)
• When it applies: Resale properties only (not new builds)
• How much: 6-13% of property value, depending on region
• When to pay: Within 30 days of signing the purchase deed
• Where to pay: Regional tax office (Agencia Tributaria)

Think of ITP as Spain's equivalent to UK Stamp Duty or property transfer taxes in other countries—except the rates vary dramatically depending on which of Spain's 17 autonomous regions you buy in.

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ITP vs VAT: Which Tax Applies to Your Property?

This is critical: You pay EITHER ITP OR VAT, never both. Which one applies depends on whether you're buying resale or new build property.

Resale Properties: Pay ITP

ITP applies to:

• Second-hand properties
• Previously owned homes
• Properties being resold

Tax rate: 6-13% depending on region (see table below)

Example on €200,000 resale:

• Valencia: €20,000 ITP (10%)
• Madrid: €12,000 ITP (6%)
• Difference: €8,000

New Build Properties: Pay VAT + Stamp Duty

VAT (IVA) applies to:

• New construction
• Properties sold by developers
• First-time sales from builders

Tax rates:

• VAT (IVA): 10% of purchase price
• Stamp Duty (AJD): 1.5% of purchase price
• Total: 11.5%

Example on €200,000 new build:

• VAT: €20,000 (10%)
• Stamp Duty: €3,000 (1.5%)
• Total: €23,000

Bottom line: New builds typically cost more in taxes (11.5%) than most regional ITP rates, but you get a brand-new property with warranties.

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Complete Regional ITP Rates: All 17 Autonomous Regions

ITP rates vary dramatically by region. This is because Spain's autonomous regions have tax-setting powers. Here are the current rates for 2025:

Critical insight: The difference between Madrid (6%) and Valencia (10%) on a €300,000 property is €12,000. If you're deciding between similar properties in different regions, this can be a significant factor.

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How ITP is Calculated: The Purchase Price Isn't What Matters

Here's the catch most foreign buyers miss:

ITP is calculated on whichever is higher:

1. The actual purchase price you're paying
2. The official reference value (valor de referencia)

What is the "Valor de Referencia"?

Since 2022, Spain's tax authorities use an official reference value based on:

• Location
• Property size
• Market conditions
• Recent comparable sales
• Cadastral data

Why this matters:

• You can't dodge taxes by underreporting the price
• Tax office has their own valuation system
• If you report €150,000 but valor de referencia is €180,000, you pay ITP on €180,000
• Attempting to underreport triggers automatic investigation

Example:

• You agree to buy for €200,000
• Valor de referencia is €220,000
• You pay ITP on €220,000 (the higher amount)
• In Valencia (10%): ITP = €22,000 (not €20,000)

How to check valor de referencia:

• Request it from the Land Registry
• Your lawyer should obtain this during due diligence
• Online tools available at cadastre.es

Pro tip: Always budget ITP based on the higher of purchase price or valor de referencia, not just what you're paying.

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When to Pay ITP: Critical Deadlines

You MUST pay ITP within 30 days of signing the escritura (purchase deed).

Timeline:

1. Day 0: Sign purchase deed at notary
2. Days 1-30: Pay ITP at regional tax office
3. After payment: Register property at Property Registry

What happens if you're late?

Penalties for late payment:

• Days 31-90: 5% surcharge + interest (3.75% annual)
• Days 91-365: 10% surcharge + interest
• 1+ years: 15% surcharge + interest + possible investigation

Example of late payment cost:

• €20,000 ITP due
• Paid 2 months late
• Penalty: €1,000 (5%) + €125 interest
• Total: €21,125 instead of €20,000

Critical: You cannot register the property in your name until ITP is paid. Without registration, you don't legally own it and cannot:

• Sell the property
• Get a mortgage
• Prove ownership in disputes

Pro tip: Your lawyer typically handles ITP payment. Ensure they do this within the 30-day window.

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How to Pay ITP: Step-by-Step Process

Form required: Modelo 600 (ITP tax form)

Payment process:

Step 1: Complete Modelo 600

• Available from regional tax office
• Downloadable online in most regions
• Contains: property details, purchase price, buyer/seller info

Step 2: Calculate ITP Amount

• Purchase price (or valor de referencia if higher)
• Multiply by regional ITP rate
• Example: €200,000 × 10% = €20,000

Step 3: Make Payment

Payment methods:

• In-person at regional tax office
• Online payment (available in Madrid, Catalonia, Valencia, Andalusia)
• Bank transfer with tax reference
• Through your lawyer or gestoría (recommended)

Step 4: Obtain Stamped Receipt

• Tax office stamps your Modelo 600
• This proves payment
• Required for property registration

Step 5: Register Property

• Submit stamped Modelo 600 to Property Registry
• Along with purchase deed
• Complete registration (€400-800 fee)

Reality check: Most buyers use a lawyer or gestoría to handle this entire process. Cost: €300-600, but worth it to avoid mistakes and penalties.

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Reduced ITP Rates: When You Pay Less

Several Spanish regions offer reduced ITP rates for specific buyers:

1. Young Buyers (Under 35)

Regions offering discounts:

• Madrid: 4% ITP (instead of 6%) for under-30s
• Valencia: 8% ITP (instead of 10%) for under-35s
• Andalusia: Reduced to 3.5% for under-35s (first €130,000)

Conditions:

• Must be primary residence
• Income limits apply (usually <€30,000-40,000/year)
• Must retain property for minimum period (3-10 years)

2. Large Families

Discount available in:

• Valencia: 8% ITP
• Madrid: 4% ITP
• Catalonia: Reduced rates available

Requirements:

• Official large family certificate
• Primary residence only
• Income limits

3. Disabled Buyers

Special rates in most regions:

• Typically 4-5% ITP (vs standard 8-10%)
• Certificate of disability required (≥33% or ≥65% depending on region)

4. Rural Properties

Some regions incentivize rural purchases:

• Lower ITP rates (often 50% reduction)
• Must commit to living there
• Agricultural properties may qualify

5. Social Housing (VPO)

• Significantly reduced rates (2-4%)
• Designated affordable housing only
• Resale restrictions apply

How to claim reduced rates:

• Declare eligibility on Modelo 600
• Provide supporting documentation
• If rejected, you pay difference + interest
• Get lawyer confirmation before claiming

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ITP on Commercial Property

Commercial property has different rates:

Typical rates:

• Commercial properties: 6-11% (same as residential in most regions)
• Some regions charge higher rates for commercial
• Garages sold separately: Full ITP rate applies
• Investment properties: No special rates (same as residential)

Important: Even if buying as an investment, you pay residential ITP rates if it's a residential property. There's no "investment property" surcharge like in some countries.

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Foreign Buyer Considerations

Good news: Foreign buyers pay the exact same ITP rates as Spanish citizens.

What you need:

• NIE (foreigner tax ID number)
• Spanish bank account (for payment)
• Lawyer or gestoría to handle payment

No special treatment:

• No discounts for being foreign
• No surcharges either
• Exact same process and rates

Brexit note: UK buyers are now non-EU, but ITP rates are unaffected. You still pay the standard regional rate.

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ITP Refunds: When You Can Get Money Back

You can claim an ITP refund if:

1. Sale Falls Through

• Contract cancelled after deed signed
• Refund available within 4 years
• Must prove sale was legally reversed

2. Overpayment

• You paid ITP on higher amount than required
• Tax office re-assessed lower
• Reclaim within 4 years

3. Property Defects Reduce Value

• Major undisclosed defects found
• Court ruling reduces purchase price
• Proportional ITP refund available

How to claim:

• File claim with regional tax authority
• Submit supporting documentation
• Processing time: 6-12 months
• Success rate: ~60% for legitimate claims

Reality: Refunds are bureaucratic. Use a lawyer.

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Common ITP Mistakes (That Cost Thousands)

Mistake 1: Using Cadastral Value

Wrong: "Cadastral value is €150,000, so I'll pay ITP on that" Right: ITP is on purchase price or valor de referencia (usually higher) Cost of error: Paying ITP on €150,000 instead of €200,000 = investigation + penalties

Mistake 2: Missing the 30-Day Deadline

Cost: 5-15% penalty + interest On €20,000 ITP: Penalties of €1,000-3,000

Mistake 3: Underreporting Purchase Price

What people try: Report €180,000 purchase price when actually paying €220,000 What happens: Tax office knows via valor de referencia Penalty: 50-100% of evaded tax + interest + possible criminal charges

Mistake 4: Not Checking Regional Rates

Error: Assuming all Spain has same ITP rate Reality: 6% Madrid vs 13% Balearics on €500,000 = €35,000 difference

Mistake 5: Forgetting ITP on Parking Spaces

Reality: If garage/parking sold separately, it attracts full ITP On €30,000 parking space: €1,800-3,900 ITP depending on region

Mistake 6: Claiming Ineligible Reduced Rates

Risk: Claiming young buyer discount without meeting criteria Penalty: Pay difference + 5-15% penalty + interest

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ITP Quick Reference Summary

Key Facts:

• ✅ Applies to resale properties only
• ✅ Paid by buyer within 30 days
• ✅ Rates: 6-13% depending on region
• ✅ Calculated on higher of price or valor de referencia
• ✅ New builds pay VAT (10%) + AJD (1.5%) instead
• ✅ Reduced rates available for young buyers, large families
• ✅ Late payment: 5-15% penalties + interest
• ✅ Foreign buyers pay same rates as Spanish citizens

Budget Planning:

• Madrid property: +6% for ITP
• Valencia/Catalonia: +10-11% for ITP
• Always add €4,000-6,000 for notary, registry, lawyer

Example Total Cost (€250,000 Valencia resale):

• Purchase price: €250,000
• ITP (10%): €25,000
• Notary: €1,200
• Registry: €700
• Lawyer: €2,500
• Total: €279,400

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Conclusion

Spanish Property Transfer Tax (ITP) is one of your largest costs when buying resale property in Spain, ranging from 6% in Madrid to 13% in the Balearic Islands for luxury properties. On a €300,000 property, you're looking at €18,000-€39,000 in transfer tax alone.

Critical actions:

1. ✅ Check the ITP rate in your target region before budgeting
2. ✅ Obtain the valor de referencia to know the true tax base
3. ✅ Ensure payment within 30 days to avoid 5-15% penalties
4. ✅ Investigate reduced rates if you're under 35 or have a large family
5. ✅ Hire a lawyer to handle Modelo 600 and payment (€300-600)
6. ✅ Budget the total cost: ITP + notary + registry + lawyer = 10-15% above purchase price

Remember: You cannot legally own the property until ITP is paid and the property is registered. Don't let a missed deadline or calculation error cost you thousands in penalties.

Next steps:

• Calculate exact ITP for your region using the table above
• Request valor de referencia from your lawyer
• Budget 10-15% above purchase price for total costs
• Confirm payment timeline with your lawyer

The good news? Once you understand the system and have a competent lawyer handling the paperwork, ITP is straightforward. Budget correctly, pay on time, and you'll navigate this major property cost without issues.

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Related Guides:

• Hidden Costs Buying Property Spain: Complete Breakdown
• Mortgage Spain Non-Resident: Rates and Requirements
• NIE Appointment Spain: How to Book and Apply

Need Help? Browse our directory of English-speaking property lawyers in Spain to ensure your ITP is calculated correctly and paid on time.