Journal
Valencia Cuts Property Transfer Tax to 9%: What the 2026 Tax Reforms Mean for Costa Blanca Buyers
By Elia Living ·
Valencia's Biggest Tax Cuts in Years: What the 2026 Reforms Mean for Costa Blanca Property Buyers
The Valencian Government has passed its most wide-ranging package of tax reductions in years. The Ley de Medidas Fiscales 2026 (Fiscal Measures Law 2026), approved by the regional cabinet (Consell) in June 2026 and completing its passage through the Corts Valencianes by 31 July, delivers meaningful savings across several taxes that affect foreign buyers and owners of Costa Blanca property directly.
The headline measure for buyers is a cut in the Impuesto sobre Transmisiones Patrimoniales (ITP) — the property transfer tax paid on resale property — from 10% to 9% for properties valued up to €1 million. A related reduction drops stamp duty (Actos Jurídicos Documentados, AJD) from 1.5% to 1.4%. Both changes apply from 1 June 2026.
The ITP Cut: Real Savings at the Notary
ITP is the single largest tax cost most buyers face when purchasing a resale (second-hand) property in Spain's Valencian Community — which covers Alicante province and, with it, the Costa Blanca North in its entirety.
| Property price | ITP before June 2026 | ITP from June 2026 | Saving |
|---|---|---|---|
| €250,000 | €25,000 | €22,500 | €2,500 |
| €400,000 | €40,000 | €36,000 | €4,000 |
| €600,000 | €60,000 | €54,000 | €6,000 |
| €900,000 | €90,000 | €81,000 | €9,000 |
Properties valued above €1 million continue to attract the existing higher band of 11%, which is unchanged.
The 9% rate applies to any buyer of a qualifying resale property — resident or non-resident, domestic or foreign. There is no nationality condition. Purchase deeds signed at the notary on or after 1 June 2026 benefit automatically; completions before that date are not affected retrospectively.
Existing reduced ITP rates for specific categories — young buyers under 35, large families, and buyers with a recognised disability — remain available for those who qualify and may produce a lower rate still.
AJD Stamp Duty Also Falls
AJD applies to notarised deeds and is charged in addition to ITP on resale purchases, or in addition to IVA (VAT) on new-build purchases. The standard rate drops from 1.5% to 1.4% from 1 June 2026.
On a €400,000 purchase this saves an additional €400 — modest in isolation, but it adds up alongside the ITP saving. New-build properties continue to attract IVA at 10% rather than ITP, but buyers of new homes also benefit from the lower AJD rate.
IRPF Income Tax: Good News for Future Residents
For buyers who go on to become tax residents in Spain, the reform also cuts the regional portion of IRPF (personal income tax). The Valencian regional rate across the first eight income brackets — covering taxable income up to €100,000 — is reduced by between 0.2 and 0.6 percentage points, with the lowest bracket falling from 9% to 8.8%. The savings are greatest in the €32,000–€72,000 income band.
Some 2.7 million taxpayers across the region benefit, with total annual savings of around €160 million. The cuts apply retroactively from 1 January 2026 and will be reflected in the income tax return filed during the spring 2027 campaign. A second phase of further reductions is planned for income year 2027.
For buyers who own property in Spain but are not yet tax residents here, IRPF does not apply — you instead pay the Modelo 210 non-resident income tax. But for those considering a permanent move to the Costa Blanca, the Valencian Community has just become measurably more competitive against other Spanish regions.
Inheritance and Gifts: Built-In Protection for Your Family
The package also strengthens the Valencian Community's already generous inheritance and gift tax framework. Spouses, children, and parents inheriting from one another benefit from a 99% reduction in Impuesto sobre Sucesiones y Donaciones (ISD) — effectively near-zero regional inheritance tax among direct family members.
A new benefit introduced by the 2026 law allows parents to gift children up to €156,000 with significant ISD relief, designed to help the next generation access the housing market. Collateral relatives (siblings, nieces and nephews) now receive a 25% ISD reduction from June 2026, rising to 50% from June 2027.
Foreign owners of Spanish property should note that Valencian ISD rules apply to Spanish-situated assets regardless of where heirs live. The direct-family relief is available to foreign heirs inheriting a Valencian property.
The Bigger Picture: A More Attractive Region Just Got More Attractive
These reforms arrive as the Costa Blanca North continues to attract strong international demand. Jávea and Moraira crossed the €4,000 per square metre average earlier in 2026 — yet lower acquisition taxes mean your effective cost of entry has just fallen. For a buyer completing on a €500,000 villa today, the combined ITP and AJD saving compared with a pre-June purchase comes to roughly €5,500.
The Valencian Community has historically sat at the higher end of Spain's regional ITP spectrum. The move to 9% narrows the gap with regions such as Madrid (6%) and Andalucía (7%), while retaining the Mediterranean lifestyle — warm winters, world-class beaches, easy international connections — that neither can match.
The region's direction of travel is encouraging. A government that actively reduces the cost of owning property here is one that understands the value of attracting international buyers and residents — and that is good for everyone who has already chosen the Costa Blanca.
What to Do Next
If you are considering a Costa Blanca purchase in 2026, the practical steps remain the same — and the arithmetic now works a little more in your favour:
- Obtain your NIE — the Número de Identidad de Extranjero required for any Spanish property transaction.
- Budget for closing costs at roughly 10–13% of the purchase price (marginally lower than before thanks to the ITP and AJD cuts).
- Work with a buyer's agent who can navigate due diligence, coordinate legal checks, and ensure the correct tax rate is applied at completion.
Frequently asked questions
Does the 9% ITP rate apply to new-build properties? No. New-build homes attract IVA (VAT) at 10% rather than ITP. The ITP cut applies exclusively to resale (second-hand) properties. New-build buyers do benefit from the reduced AJD stamp duty rate of 1.4%.
I am buying a villa in Jávea for €750,000. How much does the new ITP rate save me? At 9% you pay €67,500 in ITP rather than the previous €75,000 — a saving of €7,500. The AJD reduction saves a further €750, bringing the total combined saving to €8,250 compared with a purchase made before June 2026.
I am a non-resident. Does the IRPF income tax cut affect me? Not directly. Non-residents pay Modelo 210 rather than IRPF. The ITP and AJD cuts apply to all buyers regardless of residency status. The IRPF reductions become relevant if and when you become a Spanish tax resident.
Does the Valencian inheritance tax relief apply when a foreign heir inherits a Spanish property? Yes. Valencian ISD rules apply to Spanish-situated assets regardless of where the heir lives. The 99% reduction for direct family members — spouses, children, parents — is available to foreign heirs inheriting a Valencian property.
When exactly did the lower ITP and AJD rates take effect? Both lower rates apply to purchase deeds signed at the notary on or after 1 June 2026. Completions before that date were subject to the previous rates (10% ITP; 1.5% AJD).
Are there even lower ITP rates for certain buyers? Yes. Existing reduced rates for young buyers under 35, large families, and buyers with a recognised disability remain in force alongside the new 9% general rate. Confirm the applicable rate with your solicitor before signing.