Since June 1, purchasing a home in the provinces of Alicante, Valencia, and Castellón has become more affordable. This change primarily benefits buyers of resale properties, as the general Property Transfer Tax (ITP) rate has been reduced from 10% to 9%, with exceptions for certain high-value transactions.
Impact on Purchase Costs
To illustrate, for a resale property priced at €180,000, the tax at the previous 10% rate would have been €18,000. With the new 9% rate, the tax decreases to €16,200, resulting in a saving of €1,800 for the buyer.
While this reduction mainly affects resale properties, buyers of new-build homes will see no change in VAT, which remains at 10%. However, the general Stamp Duty on Documented Legal Acts (AJD) has been slightly lowered from 1.5% to 1.4%, potentially offering savings on high-value purchases. To qualify for these tax reductions, purchase agreements must be signed on or after June 1.
Key Considerations Before Signing
This tax adjustment comes at a time when securing a home is a significant concern for many families, especially young and first-time buyers. Although the reduction in taxes does not address broader challenges such as high property prices, limited supply, or financing difficulties, it does help reduce the upfront costs associated with buying a home.
Buyers should carefully evaluate each transaction before signing, as varying rates, tax incentives, and special provisions may apply depending on the buyer’s profile, property value, and whether the property will serve as the main residence. Additionally, higher tax rates still apply to certain high-value residential properties, meaning not all purchases will benefit equally from these reductions.