Spanish Property Purchase Taxes Explained: ITP, IVA and AJD for UK Buyers (2026)
A client of mine was two weeks from signing on a €480,000 resale apartment in Marbella when his solicitor told him the number he’d forgotten to budget for: €33,600 in purchase tax alone, due within 30 days of completion. He had the deposit. He had the purchase price. He did not have the tax money sitting in a Spanish account ready to go.
It’s one of the most common shocks for British buyers on the Costa del Sol. Spain’s property purchase taxes are real, they are non-negotiable, and they are on top of everything else in the cost breakdown. This guide tells you exactly what you will pay, how the system works, and how to handle it without panic.
The two systems: resale versus new-build
Spain uses two completely different tax regimes depending on whether you are buying a resale property or a brand-new one direct from a developer.
Resale property: you pay Impuesto de Transmisiones Patrimoniales (ITP): the Property Transfer Tax.
New-build from a developer: you pay IVA (Spanish VAT) plus Impuesto sobre Actos Jurídicos Documentados (AJD), known as Stamp Duty.
You cannot mix them. The type of property determines which system applies, automatically. The key distinction is whether VAT has already been paid on the property. Resale properties have been through the IVA system once; resale buyers pay ITP instead. New-builds coming directly from a developer haven’t been through the system as a completed sale, so you pay IVA as the first buyer.
There is a narrow exception: if a developer or property professional (empresa) is selling a resale property in the course of business, IVA may apply. Your abogado will confirm which applies to your specific transaction.
ITP: the resale purchase tax
What rate applies in Andalusia?
Andalusia, which covers the Costa del Sol, sets its own ITP rate. Since 2021 it has been a flat 7% on the declared purchase price. Previously the region used a sliding scale; the flat 7% was introduced to simplify matters.
A handful of other Spanish regions charge 8%, 10% or more, so always confirm the regional rate when buying outside Andalusia.
What does it apply to?
ITP is charged on the escritura de compraventa (title deed) purchase price. It is based on the declared value at the notary, but the Agencia Tributaria de Andalucía (ATJA) has the right to challenge the declared price if it thinks you’ve undervalued the property. They use reference values (valores de referencia) published by the Dirección General del Catastro, broadly market-based benchmarks updated annually.
If your purchase price is below the cadastral reference value, the ATJA may assess ITP on the reference value instead. This caught a number of buyers off guard after the reference value system was reformed in 2022. Your abogado should check the reference value for any property before you sign.
Worked examples: ITP on resale
| Purchase price | ITP at 7% | Approximate total acquisition cost |
|---|---|---|
| €200,000 | €14,000 | €14,000 + notary + land registry + abogado |
| €350,000 | €24,500 | €24,500 + notary + land registry + abogado |
| €500,000 | €35,000 | €35,000 + notary + land registry + abogado |
| €750,000 | €52,500 | €52,500 + notary + land registry + abogado |
| €1,000,000 | €70,000 | €70,000 + notary + land registry + abogado |
As a rule of thumb, budget 10-12% of the purchase price on top for all acquisition costs combined (ITP, notary, land registry, gestoria, abogado). The full cost breakdown guide has detailed numbers by price band.
How and when do you pay ITP?
ITP is paid via Form 600 (Modelo 600 in Andalusia). Your gestoria or abogado will almost always handle this on your behalf; it is included in their completion service.
The deadline is strict: 30 working days from the date of the escritura. Miss it and you face surcharges of 5% (within 3 months), 10% (3-6 months), 15% (6-12 months), or 20% plus interest after 12 months. The ATJA also has the right to add a penalty on top of the surcharge.
Payment is made online via the ATJA portal or at a registered financial institution. The stamped Form 600 receipt is then presented to the land registry to register the transfer. Without it, the Land Registry will not complete registration. That means you don’t have full legal title even though you’ve signed the escritura.
IVA and AJD: new-build purchase taxes
When you buy direct from a developer (whether off-plan or a completed new-build), you pay Spanish VAT (IVA) rather than ITP.
IVA rate on residential property
10% IVA applies to residential new-build property in Spain. There is no regional variation here: it’s a national tax and the rate is the same everywhere.
4% super-reduced IVA applies to officially designated “protected housing” (Viviendas de Protección Oficial, VPO). These are social-housing-adjacent schemes with price caps. You are unlikely to encounter VPO property as a British buyer on the Costa del Sol’s open market.
AJD: the stamp duty
On top of IVA, new-build buyers also pay Impuesto sobre Actos Jurídicos Documentados (AJD) on the escritura. In Andalusia, AJD is currently set at 1.2% of the declared purchase price. This is lower than in some other regions (Madrid is 0.75%; Catalonia is 1.5%).
So in Andalusia, buying a new-build means:
– 10% IVA
– 1.2% AJD
– Total: 11.2%
Worked examples: IVA + AJD on new-build
| Purchase price | IVA at 10% | AJD at 1.2% | Total tax |
|---|---|---|---|
| €250,000 | €25,000 | €3,000 | €28,000 |
| €400,000 | €40,000 | €4,800 | €44,800 |
| €600,000 | €60,000 | €7,200 | €67,200 |
| €900,000 | €90,000 | €10,800 | €100,800 |
Resale vs new-build: which costs more in tax?
At the same purchase price, new-build costs significantly more in purchase tax: 11.2% versus 7%. On a €500,000 property that’s a difference of €21,000 in tax alone.
The new-build premium in purchase taxes is one reason resale properties often offer better short-term value for buyers who don’t have a specific reason to buy new (off-plan growth potential, energy rating, exact specification, payment plan structure). The new-build vs resale ROI guide covers this trade-off in full.
How and when is IVA paid?
IVA on new-builds is collected by the developer at the point of signing the escritura. The developer then accounts for it to the Spanish tax authority. From your perspective, it’s simply added to the total you pay at completion; there’s no separate form to file yourself.
AJD, however, is filed on Form 600 (the same form as ITP, with a different section marked). Again, your gestoria handles this. Deadline: 30 working days from escritura.
Reduced rates and exemptions: what UK buyers should know
First-home buyers in Andalusia
Andalusia offers a reduced ITP rate of 3.5% for first-home purchases under €150,000, where the buyer is under 35 or has a disability. The catch: you must be tax resident in Spain at the time of purchase to qualify.
As a British buyer purchasing a holiday home or investment property, you will almost certainly be a non-resident, so the standard 7% applies. If you are relocating permanently to Spain and will be applying for residency, discuss timing with your abogado. Do not hold up your purchase in order to chase a reduced rate unless the maths clearly justify the wait.
Large families and other reductions
Andalusia also offers a reduced 3.5% ITP for large families (familia numerosa) and certain disability categories. Again, residency is typically required. Worth asking your abogado if it might apply to you, but don’t bank on it.
Commercial property and garages
Garages and commercial property are typically taxed at the standard ITP or IVA rate, but rules vary. A garage sold separately from a residential unit can sometimes attract a higher stamp duty rate. Confirm with your abogado for any non-standard purchase.
Common mistakes to avoid
1. Confusing the list price with the total cost. The purchase tax is on top of the agreed price. If your offer is €400,000 on a resale, you need €428,000+ available, and that’s before notary, land registry, abogado and gestoria fees.
2. Assuming the rate is the same as another buyer’s experience. A friend who bought in Catalonia or the Canary Islands paid a different ITP rate. Always confirm the current Andalusian rate with your abogado before you budget.
3. Missing the 30-day payment deadline. The clock starts from the escritura date, not from when you return to the UK. If you sign on a Friday, the clock is already running. Your gestoria should file Form 600 within a week of completion.
4. Declaring below market value. Some buyers historically undervalued properties at the notary to reduce ITP. The reference value system has largely closed this door. If the ATJA challenges your declared price, you face the original tax bill plus interest, plus potential penalties. Don’t do it.
5. Not checking the reference value before signing. If the reference value exceeds your purchase price, you’ll be assessed on the higher figure even if you paid less. This can make a seemingly good deal more expensive in tax terms than expected.
FAQs
Can I reclaim any of the purchase tax if I later sell?
No. ITP and AJD are not reclaimable. They do, however, form part of your allowable acquisition cost when calculating capital gains tax on any future sale, which reduces your taxable gain. Keep your Form 600 receipts. The capital gains tax guide explains this in full.
What if I’m buying with a Spanish mortgage?
A mortgage itself triggers its own AJD on the mortgage deed (the escritura hipotecaria). Since the 2018 Mortgage Law, the bank pays this AJD on the mortgage, not the buyer. You pay only the property AJD on the purchase escritura.
Do I pay ITP before or after I get the keys?
The notary signing (escritura) and key handover happen simultaneously on completion day. ITP is then due within 30 days of that date. You get the keys before ITP is formally paid to the tax authority, but the form must be filed and paid promptly to complete land registry registration.
What happens if the deal falls through after signing the arras but before escritura?
You haven’t paid ITP yet (it’s due on the escritura, not the arras). No purchase tax liability arises if the transaction doesn’t complete. You may, however, have contractual penalties under the arras agreement. That’s a separate matter. The contrato de arras guide covers your rights in that scenario.
Can I pay in sterling?
No. Spanish taxes are denominated in euros and must be paid from a Spanish bank account or by cheque issued by a Spanish institution. This is another reason to have your Spanish bank account set up and funded in euros well before completion day.
The practical checklist before completion
Before you sign the escritura, confirm with your abogado or gestoria:
- Which tax regime applies: ITP (resale) or IVA + AJD (new-build)?
- The current applicable rate in Andalusia
- Whether the cadastral reference value exceeds your purchase price
- That Form 600 will be filed within the 30-day deadline
- That the purchase tax amount is included in your completion funds, sitting in a Spanish euro account ready to go
Ready to start looking?
Purchase taxes are one part of the overall cost picture for buying on the Costa del Sol. Before you put in an offer, it’s worth understanding exactly what you’ll pay, because it affects how much property you can actually afford.
We work with British buyers across Estepona, Marbella, Benahavís, Sotogrande and the wider Costa del Sol. If you’d like a straight-talking overview of all the costs involved in a purchase at your budget, get in touch and we’ll walk through the numbers with you.
Tax rules change. Always confirm current rates and deadlines with a qualified Spanish abogado or gestor before completing any property transaction.
