Valencian Community Cuts Property Transfer Tax (ITP) in 2026: What Buyers Need to Know

The Valencian Community has announced a significant reduction in the Property Transfer Tax (Impuesto de Transmisiones Patrimoniales – ITP) applicable to second-hand property purchases. These changes, introduced by Law 5/2025, will take effect progressively and represent a meaningful tax saving for homebuyers from 1 June 2026.

The reform is aimed at improving access to housing, supporting vulnerable groups, and increasing competitiveness in the regional property market.

ITP vs VAT: Which Tax Applies When Buying Property in Spain?

It is essential to distinguish between ITP and VAT (IVA), as they apply to different types of property transactions:

• ITP applies only to resale properties (second-hand homes purchased from a private individual).
• VAT applies to new-build properties purchased directly from a developer or promoter.

The 2026 tax reform in the Valencian Community only affects ITP. The VAT rate for new properties remains unchanged:

• VAT on new residential properties: 10%
• VAT on new-build properties is payable nationwide and is not affected by regional ITP rules.

General ITP Rate in the Valencian Community from June 2026

As of 1 June 2026, the general ITP rate for resale property purchases in the Valencian Community will be reduced:

• General rate: 9% (previously 10%)
• Luxury properties: 11% for properties with a declared value exceeding €1,000,000

This reduction applies primarily to the acquisition of habitual residences and represents a substantial saving for buyers compared to the previous tax framework.

Reduced ITP Rates for Special Groups

The Valencian tax system continues to offer favourable reduced rates for specific social and economic groups, provided that certain conditions are met.

Young Buyers (Under 35)

• ITP rate: 6%
• Applies to the purchase of a first habitual residence
• Maximum property value: €180,000

Large Families and Single-Parent Families

• ITP rate: 3%
• Property must be the habitual residence
• Maximum property value: €180,000

Buyers with Disabilities

• ITP rate: 4%
• Applies mainly to protected housing (VPO) or properties meeting specific value and accessibility conditions

Rural Land for Professional Farmers

• ITP rate: 4%
• Applies to non-developable rural land
• Buyer must qualify as a professional farmer
• Effective from 30 June 2026

Payment Deadline and Filing Obligations

The ITP must be paid within 30 working days from the date of signing the public deed of sale.

• Tax form: Modelo 600
• Where: Valencian Regional Tax Authority

Failure to file and pay within the deadline may result in surcharges and penalties.

Progressive Reduction under Law 5/2025

The reduction of the general ITP rate is part of a progressive tax reform established by Law 5/2025. The objective is to gradually reduce the tax burden on property transactions while maintaining higher taxation for high-value assets.

Frequently Asked Questions (FAQs)

Does ITP apply to all property purchases in Spain?

No. ITP applies only to resale (second-hand) properties. If you purchase a newly built property directly from a developer, the transaction is subject to VAT instead of ITP.

What is the VAT rate on new-build properties in Spain?

The VAT rate for new residential properties remains at 10% throughout Spain, including the Valencian Community. This rate is not affected by the 2026 ITP reform.

When does the new 9% ITP rate apply?

The reduced general rate of 9% applies to qualifying resale property purchases completed from 1 June 2026 onwards.

Do non-residents benefit from the reduced ITP rate?

Yes. The general ITP rate applies regardless of residency. However, some reduced rates (such as those for young buyers or families) require compliance with specific personal and residency conditions.

What happens if the property value exceeds €1,000,000?

Properties with a declared value exceeding €1,000,000 are subject to an increased ITP rate of 11%, even after the 2026 reform.

Is professional advice recommended?

Yes. Spanish property taxation is complex and varies by region and personal circumstances. Professional tax advice is strongly recommended before completing any transaction.

ITP Rates Across Spain: Regional Comparison

Property Transfer Tax in Spain is regulated at a regional level, meaning that rates vary depending on the autonomous community. The table below provides an indicative comparison of general ITP rates applicable to resale properties.

Note: Reduced rates may apply depending on the buyer’s age, family status, disability, or property characteristics.

Conclusion

The 2026 ITP reform strengthens the position of the Valencian Community as an attractive destination for property buyers, particularly in the resale market. While VAT on new-build properties remains unchanged at 10%, the reduced ITP rate offers meaningful savings for purchasers of second-hand homes.