What Is ITP (Impuesto de Transmisiones Patrimoniales)?
The ITP is Spain's property transfer tax. You pay it every time you buy a resale property. It is the single largest additional cost on top of the purchase price. Understanding this tax is essential before you sign anything.
ITP only applies to resale (second-hand) properties. If you buy a new-build directly from a developer, you pay VAT (IVA) instead. More on that in our guide on VAT for new-build properties.
ITP Rates by Region
Spain is divided into 17 autonomous communities, and each one sets its own ITP rate. Here are the most relevant regions for property buyers:
- Andalusia (Costa del Sol, Malaga, Marbella): 7%
- Valencia (Costa Blanca, Alicante): 10%
- Catalonia (Barcelona, Costa Brava): 10%
- Balearic Islands (Mallorca, Ibiza): 8% to 11% (progressive scale)
- Canary Islands (Tenerife, Gran Canaria): 6.5%
- Madrid: 6%
- Murcia: 8%
Andalusia's flat 7% rate makes the Costa del Sol one of the more affordable regions in terms of transfer tax. On a property worth EUR 300,000, that means EUR 21,000 in ITP alone.
How ITP Is Calculated
The tax is applied to the declared purchase price or the fiscal reference value, whichever is higher. Since 2022, Spain uses the "valor de referencia" system. The tax office compares your purchase price against their reference value. If their value is higher, you pay tax on the higher amount.
This means you cannot simply declare a lower price to save on tax. The authorities will catch it and send you a complementary tax bill, plus interest.
Example Calculation (Andalusia)
- Purchase price: EUR 250,000
- Fiscal reference value: EUR 240,000
- Taxable base: EUR 250,000 (the higher value)
- ITP at 7%: EUR 17,500
When Do You Pay ITP?
You must pay ITP within 30 calendar days after signing the title deed (escritura) at the notary. Your lawyer or gestor typically handles the filing and payment through the regional tax office. Missing the deadline triggers late payment surcharges of 5% to 20%, plus interest.
Reduced Rates and Exemptions
Several regions offer reduced ITP rates for specific buyers:
- Young buyers (under 35): Reduced rates in Andalusia (3.5%), Madrid (4%), and other regions
- Large families: Often qualify for the same reduced rates
- Social housing (VPO): Rates as low as 3.5% in many regions
- Disabled buyers (33%+ disability): Reduced rates in most regions
These reductions typically require the property to be your primary residence and come with minimum holding periods.
Estimate Your Total Costs
ITP is just one part of the total buying costs. Use our free calculator to estimate your total costs, including notary fees, registry fees, and lawyer costs. Budget 10% to 13% on top of the purchase price for a resale property.