Costs and taxes when buying a home in the Valencian Community

Buying a property in the Comunitat Valenciana involves much more than agreeing a price with the seller. There are taxes to pay, documents to review, formalities to handle, and expenses to calculate in advance so you don’t get any unpleasant surprises on signing day.

This guide is designed so that any buyer — resident or non-resident, Spanish or foreign — can clearly understand what they will pay, which documents they need to review, and what mistakes are worth avoiding. Without unnecessary technical jargon, but without skipping anything important.

💡  Golden rule: in addition to the home price, set aside an extra 10% to 12% to cover taxes, notary fees, the Land Registry and management costs. The exact percentage will depend on whether the property is new or used, whether you have a mortgage, and whether you can apply any reduced rate.

1. How much will I pay in taxes?

The most important tax depends on whether you’re buying a second-hand home or a newly built one. These are two different taxes with different rules.

Second-hand property: Transfer Tax (ITP)

When buying a used home, the buyer pays the Transfer Tax on Property Transfers (ITP). In the Comunitat Valenciana, from 1 June 2026, the applicable rates are:

•      9% as a general rule for most purchases.

•      11% when the value of the property exceeds €1,000,000.

However, reduced rates may apply if certain requirements are met. The main ones are:

•      8%: first habitual home for young people under 35, or official protected housing under the general regime, when the property value exceeds €180,000 and the income and intended-destination requirements are met.

•      6%: the same scenarios as above when the value does not exceed €180,000.

•      4%: habitual home for large families or single-parent families, people with disabilities, women who are victims of gender-based violence, or protected housing (VPO) under the special regime, when the value exceeds €180,000.

•      3%: the same scenarios as in the 4% case when the property value does not exceed €180,000.

⚠️  Being part of one of these groups is not enough: you must also meet the property value limits, the buyer’s income limits, make the home your habitual residence, and formalise the purchase in a public deed within the legal timeframe. If you have any questions, consult a tax advisor before signing.

New-build property: VAT (IVA) and Stamp Duty (AJD)

If you buy directly from the developer, you don’t pay ITP; you pay VAT. For new homes, the general VAT rate is 10%. For official protected housing under the special regime or public promotion, a reduced 4% rate may apply if the requirements are met.

In addition to VAT, for new builds you also pay the Tax on Documented Legal Acts (AJD). In the Comunitat Valenciana, from 1 June 2026, the general AJD rate is 1.4%. For the purchase of a habitual home documented in a public deed, a reduced rate of 0.1% may apply if the requirements are met.

2. The rest of the costs: notary, Land Registry and management

Besides taxes, there are other expenses that are part of the buying process. They don’t have a fixed percentage because they depend on the property price, the deed’s length and the specific formalities, but it’s important to know them.

Notary fees

The sale must be formalised before a notary through a public deed. The cost depends on the declared price, the number of pages (folios) and the copies required. In practice, the buyer usually covers most of the costs of the sale deed unless otherwise agreed.

💡  If you have a mortgage, the lending institution typically covers a large part of the costs of setting up the mortgage loan in line with the current regulations. You pay the appraisal and, where applicable, copies or services you have arranged yourself.

Property Registry (Registro de la Propiedad)

Once the deed has been signed, it must be registered with the Property Registry. This step is essential: registration protects your ownership rights against third parties and gives you legal certainty as the new owner. The cost depends on the declared value and the applicable registry fees (aranceles registrales).

Property management/agents (Gestoría)

When there is a mortgage, a management office (gestoría) is often involved to process taxes, submit the deed to the Property Registry and handle the subsequent documentation. Without financing, you can carry out these formalities yourself, although many buyers choose a gestoría for convenience and security.

Real estate agency fees

In some cases there may be fees for real estate intermediation services. They are not always charged to the buyer, nor do they have the same amount at every agency. Ask explicitly before signing any reservation, deposit (arrha) or purchase commitment.

3. Costs paid by the seller, not you

There are taxes and expenses that belong to the seller, not the buyer. Knowing them helps you understand the transaction better and avoid misunderstandings.

•      Municipal capital gains tax (Impuesto sobre el Incremento de Valor de los Terrenos de Naturaleza Urbana): this is the seller’s responsibility.

•      Release from the Registry of prior charges, such as an old mortgage belonging to the seller: this also falls to the seller, unless there is an express agreement to the contrary.

⚠️  If the seller is a non-resident in Spain, there is a 3% withholding on the sale price. This does not increase the purchase price for the buyer, but it does mean it must be handled correctly: the buyer may be required to withhold and pay that amount to the Tax Agency (Agencia Tributaria). If the seller is foreign, confirm this point with your advisor before signing.

4. Documents you should review before signing

Before handing over a deposit, signing a deposit agreement (contrato de arras), or committing to a mortgage, there are certain documents you should review without exception. Not doing so is one of the most common and costly mistakes in a property purchase.

Simple Property Registry certificate (nota simple)

This is the first document you should request. The nota simple tells you who the legal owner is, whether there are mortgages, foreclosures/embargoes, easements, tax charges (afecciones fiscales) or other encumbrances on the property. It must be up to date.

💡  If a charge appears, it doesn’t automatically mean you can’t buy the property. But it does mean you must understand what it is, and that the charge must be cancelled or regularised before or at the time of signing.

Cadastral reference and reference value

Check that the cadastral reference matches the actual property and the Registry description. Important: the cadastral reference value may affect the minimum tax base you are taxed on for ITP or AJD. If that value is higher than the price you pay, you may have to pay tax on that higher amount, unless you contest it through the legal channels.

Energy efficiency certificate

The seller must provide the registered energy efficiency certificate and the energy label. It should be available, at the latest, on the day the deed is signed before the notary.

IBI receipt

The most recently paid IBI receipt confirms the tax ownership details, the cadastral reference and the cadastral value. The notary will usually request information from SUMA Gestión Tributaria about any possible outstanding debts if the property belongs to a municipality managed by that body.

Certificate from the homeowners’ association

If the home is part of a homeowners’ association, the seller must provide a certificate proving that payments are up to date. But that’s not enough: it’s also worth reviewing the monthly fees, the approved or expected special assessments (derrams) and the most recent minutes.

⚠️  If you plan to use the property for tourist rentals, review the homeowners’ association bylaws and the most recent minutes. Since 2024, associations may limit or prohibit holiday rentals by a qualified majority. If the association has already restricted them, you should know before buying.

Habitability certificate or equivalent documentation

In the Comunitat Valenciana, check that the property has the habitability documentation required in each case. For new or refurbished homes, the relevant licence or responsible declaration for first occupation will be important. For existing homes, review the available documentation and its validity, especially if you need to arrange utilities.

Planning/development status

This point is especially important for detached houses, villas, properties on non-developable land, and any property with extensions, swimming pools, enclosed terraces or buildings that may have been carried out without a licence. Make sure there are no open planning proceedings, orders requiring restoration to legal status, or restrictions on use. If you have any doubts, ask the town hall (ayuntamiento) for planning information.

Rental agreements

The property must be delivered vacant, unless you expressly agree to buy it with a tenant. If there is a tenancy, review the contract, its duration, the rent, the deposit (fianza), the rights of preferred acquisition, and whether payments are up to date.

Utilities and condition of the building

Request recent electricity, water and gas bills to check that utilities are connected and that there are no debts. In older buildings, also check whether there is a pending Building Technical Inspection (Inspección Técnica de Edificios, ITE) or any detected deficiencies that could lead to future special assessments.

5. The deposit agreement (arras contract): more important than it seems

The deposit agreement (contrato de arras) is the private document signed before the public deed. It is used to reserve the home, set out the main conditions of the transaction and make clear what happens if either party fails to comply.

It’s not just a reservation. It can create important obligations for both the buyer and the seller, and it’s worth reading it very carefully before signing.

At a minimum, the deposit agreement should include:

•      Purchase price and the amount handed over as the deposit.

•      Maximum deadline to sign before the notary.

•      The status of charges/encumbrances on the property.

•      Allocation of expenses between buyer and seller.

•      The home’s occupancy status.

•      Consequences of non-compliance for each party.

⚠️  If the purchase depends on the bank granting you the mortgage, include this explicitly in the deposit agreement. If it isn’t agreed, you could lose the amount handed over even if the bank denied the loan for reasons unrelated to you.

6. Common mistakes worth avoiding

These are the most common mistakes in a property purchase in Spain, especially among first-time buyers or foreign buyers:

•      Calculating only the purchase price and forgetting taxes, notary fees, the Land Registry, management/agency costs and the appraisal.

•      Signing a deposit agreement without reviewing the nota simple or checking whether there are charges.

•      Not asking about approved or pending special assessments (derrams) in the homeowners’ association.

•      Not including in the deposit agreement what happens if the bank doesn’t grant the mortgage.

•      For non-resident buyers: leaving the NIE, notarial power of attorney, or tax planning for the very last moment.

•      Not checking the planning/development status for villas, plots, or homes with added constructions.

7. If the buyer is foreign or a non-resident

Buying a property in Spain as a foreigner or non-resident is both possible and common in places such as the Marina Alta. However, there are additional formalities you should know about in advance to avoid delaying the transaction.

The NIE: the first step

Every foreign buyer needs an NIE (Foreigner Identification Number) to sign the purchase, pay taxes and carry out any formalities in Spain. It can be requested in Spain at the National Police (Policía Nacional) or at the Spanish consulate of the country where you reside.

💡  Having an NIE does not automatically make you a tax resident in Spain. These are different concepts with different tax implications.

Bank account

Opening a bank account in Spain is not always legally necessary, but it makes paying taxes, utilities, homeowners’ association fees and a mortgage far easier. In addition, all payments must be documentarily justifiable under anti-money laundering prevention regulations.

Notarial power of attorney

If you can’t travel to Spain to sign, you can grant a notarial power of attorney to a trusted person so they can sign on your behalf. If the power of attorney is granted outside Spain, it may require apostille, sworn translation and prior review by the Spanish notary. Discuss this in advance.

Tax obligations after the purchase

Once you are the property owner in Spain, tax obligations may arise even if you don’t rent the home. If you do rent it, you must declare the income. If you don’t rent it, there may be imputed rental income (renta inmobiliaria imputada) under Non-Resident Income Tax (IRNR). For transactions of significant amounts, the Wealth Tax may also be relevant.

⚠️  Analyse your tax situation before buying, not afterwards. In high-value transactions, the tax implications for non-residents can be significant, and it’s wise to plan them with a specialised advisor.

Address for tax notifications in Spain

It’s highly recommended to set an address for notifications in Spain or to have an advisor who manages communications from the Tax Agency (Hacienda), the town hall (ayuntamiento), the homeowners’ association and utilities. Not responding to a notification can result in surcharges or loss of deadlines.

Buy with confidence: the value of professional support

A properly handled property purchase requires reviewing taxes, documentation, charges/encumbrances, the planning/development status, financing and future obligations. When everything is in order, the process is smooth and without surprises. When something goes wrong, the consequences can be expensive and difficult to undo.

That’s why, especially in transactions involving financing, non-resident buyers, older homes, properties with charges, or doubts about planning/development status, having professionals who know the market and local regulations well makes a real difference.

In the Comunitat Valenciana, you can check that a real estate agency is registered with the Register of Real Estate Intermediation Agents of the Comunitat Valenciana, created to ensure transparency in the sector and consumer protection.

At COSBA, we accompany our clients throughout the entire process: from the first visit to the signing before the notary. We coordinate the documentation, spot possible issues before they become an obstacle, and explain each step clearly. If you have questions about buying a home in Dénia or the Marina Alta, contact us without obligation.

This guide is for general information only and may contain errors, omissions or become outdated due to regulatory changes or the specific circumstances of each transaction. For any decision with tax or legal implications, always consult a qualified professional.

Frequently asked questions about purchase costs when buying a home in the Comunitat Valenciana

How much should I have saved, in addition to the property price?

As a general rule, between 10% and 12% additional to the purchase price. For second-hand housing, ITP (9% from June 2026) is the largest cost. For new builds, VAT (10%) plus AJD (1.4%). On top of that come notary fees, the Land Registry, management/agency costs and, if there is a mortgage, the appraisal.

Is ITP in the Comunitat Valenciana 10% or 9%?

From 1 June 2026, the general ITP rate in the Comunitat Valenciana is 9%. Before that date it was 10%. For properties with a value above €1,000,000, the rate is 11% in both cases.

Can I apply a reduced ITP rate if I’m under 35?

Yes, if you meet the requirements. Young people under 35 can apply a 6% rate (if the value doesn’t exceed €180,000) or an 8% rate (if it does exceed), provided it is their first habitual home and they meet the established income limits. Consult a tax advisor to verify your specific situation.

Can a foreigner buy a property in Spain?

Yes, there are no restrictions based on nationality. They need an NIE, which can be arranged in Spain or at the Spanish consulate of the country where they reside. It’s advisable to process it in advance because timeframes may vary.

What is the deposit agreement (arras contract) and when is it signed?

It’s the private contract signed before the public deed. It reserves the property, sets the purchase conditions and lays out what happens if either party doesn’t comply. It is usually signed after agreeing the price and before going to the notary. It’s not just a reservation: it has real financial consequences for both parties.

What happens if the bank doesn’t grant me the mortgage after signing a deposit?

It depends on what you agreed in the deposit agreement. If no clause was included, you could lose the amount handed over. That’s why it’s essential to expressly state in the deposit agreement what happens if financing is not granted.