Taxes when buying property in Spain: ITP, IVA and AJD
In 30 seconds
On a Costa del Sol purchase, you pay one of two taxes. Which one depends only on who is selling. A resale from a private owner carries ITP at 7 % of the price. A new build from a developer carries IVA 10 % plus AJD 1,2 %, 11,2 % combined.
Who is selling you the property?
- A private owner, resale propertyITP at 7 % of the price, or of the reference value if that is higher.
- A developer, new buildIVA at 10 % plus AJD at 1,2 %, 11,2 % combined.
Which tax do you pay, and why does it depend on the seller?
IVA, Spanish VAT, is 10 % of the price on a brand new home. It applies whenever the seller is the developer, because a new-build sale is a business transaction subject to VAT rather than a transfer between private individuals.AJD is the Spanish stamp duty on the signed deed, a small percentage of the price, and in Andalusia it is paid alongside IVA on a new build. It is never paired with the resale transfer tax below; a purchase carries one tax family or the other, never both.ITP is the transfer tax paid when you buy a resale property, and in Andalusia it is 7 % of the price. It applies whenever the seller is a private individual rather than a developer, which is the ordinary case for a second-hand property.
Who is sellingWhat you pay
- A developer, on a new-build unit
- 10 % IVA plus 1,2 % AJD, 11,2 % combined. Fixed by national and regional law; nothing to negotiate.
- A private owner, on a resale property
- 7 % ITP, calculated on whichever is higher: your agreed price or the property’s official reference value. See below.
Do the lower rates you may have read about ever apply to you?
Spanish and Andalusian law both publish reduced tax rates below the headline rates, and a foreign buyer researching this topic will find them. They almost never apply to a holiday or investment purchase. It is worth knowing why, rather than hoping they do.The four rates below are stated as they are commonly described, rather than quoted from the official law text, so treat them as indicative. This costs you nothing in practice, because none of them is a rate you would be budgeting for.
| Reduced ITP, 6 % or 3,5 %Residents only | Reduced IVA, 4 %Social housing | Higher IVA, 21 %Land and commercial | |
|---|---|---|---|
| What it requires | The property becomes your vivienda habitual, your main and permanent residence, plus a value cap. | Reserved for officially protected social housing (vivienda de protección oficial). | Applies to a plot of land or a commercial unit rather than a residential dwelling. |
| Does it apply to an ordinary buyer | No. A non-resident buying a second home on the Costa del Sol does not qualify, whatever a listing implies. | No. Does not apply to ordinary new-build stock on this coast. | This is the one case where the rate is higher for the buyer, not lower. |
| What to do about it | Budget at 7 %. If an agent tells you a lower rate applies, ask them to put it in writing and have your lawyer check it. | Ignore it unless the unit is formally designated protected housing, which is stated in its own paperwork. | Check what you are buying. A plot or a commercial unit is taxed differently from a dwelling, and the listing does not always make that clear. |
The practical rule: budget at 7 % for a resale property and 11,2 % for a new build, and treat any lower figure you encounter as a special case that does not apply to you until a lawyer confirms otherwise in writing.
Why can the tax bill be higher than 7 percent of what you paid?
The valor de referencia is the reference value Spain sets for a property, and the resale transfer tax is calculated on it whenever it is higher than the price you paid. Since 1 January 2022, the tax base for ITP is legally the higher of the two figures, not simply the price written into the contract.It exists to stop a buyer and seller under-declaring a price to reduce the tax bill. Its effect on an honest buyer who has agreed a fair price is simple and automatic: if the Catastro’s own reference value is higher than what you agreed, the tax follows the reference value instead.
What buyers assumeWhat the reference value does
- The tax is 7 % of the price on the contract
- It is 7 % of whichever is higher: the contract price or the reference value. The two are usually close, and occasionally are not.
- A lower agreed price means a lower tax bill
- Only down to the reference value floor. Below that, the tax stays the same regardless of what the contract says, which is also why under-declaring the price achieves nothing but risk.
| Price you agreed | Reference value | |
|---|---|---|
| Base figure | 400.000 € | 430.000 € |
| ITP due7 % of the base | 28.000 € | 30.100 € |
Can I challenge the reference value if I think it is wrong?Yes, through the tax you pay: you can pay ITP on the reference value and then formally contest it, or in some cases request a correction. You must show the real market value is lower. This is a lawyer’s procedure, not a form you fill in yourself. It is worth raising before completion, if the figures look far apart, not after you have already paid.
What happens if you bring the purchase money as cash yourself?
Almost nobody funding a Spanish purchase should be carrying cash across a border, and the reason is not just practical. Spain treats a cash movement above a threshold as something you must declare in advance, separately from anything your bank or your lawyer asks about where the money came from.The rule that applies to a foreign buyer is Spanish law, not the EU regulation most articles quote. The EU rule (Reglamento 2018/1672) only governs the external EU border. Entering or leaving the EU with 10.000 € or more in cash must be declared automatically if you are carrying it, or disclosed on request if it travels unaccompanied. Moving from Czechia to Spain does not cross an external EU border, so that regulation does not apply to this trip.What does apply is Spanish law directly: under Ley 10/2010 and Orden ETD/1217/2022, a movement of 10.000 € or more per person, on a national or intra-EU journey, is declared on form Modelo S-1, filed in advance wherever the crossing has no customs post. A separate, higher 100.000 € threshold exists only for movements entirely inside Spain, and does not apply to a Czechia-to-Spain trip.
- Moving 10 000 € or more in cashWho decidesAnyone carrying itWhat it grantsTriggers the dutyIf noNothing to declare
- File Modelo S-1 in advanceWho decidesYou, before travellingWhat it grantsLawful, recorded movementIf noSeizure, plus a fine
- Confirm the cash payment ceiling with your lawyerWho decidesYour lawyerWhat it grantsNo cap on this paymentIf noYou risk breaching a ceiling nobody has confirmed for you
One more rule is worth flagging, rather than stating as settled: Spain also caps how much of a purchase price can be paid in cash, under Ley 7/2012 art. 7 as amended. As it is commonly described, the ceiling is 1.000 € where a business is a party to the transaction, or 10.000 € where the payer is a non-resident private individual. We have not read this figure in the official BOE legal text, so treat it as a strong sign that a large cash payment is restricted, and confirm the exact figure with your lawyer before you rely on it.
Sources
Do I still have to declare anything if I transfer the money by bank rather than carry it?A bank transfer is not a cash movement and Modelo S-1 does not apply to it. Your bank will still ask about the origin of the funds as part of ordinary anti-money-laundering checks, which is a different question from the one this section answers, and it is the one the FAQ page addresses under "Will I have to document where my money came from?" A bank transfer is also the route this site recommends: see the currency-transfer guide.
What to confirm before you rely on these rates
Four things, checked against your specific transaction rather than against a published rate.| Ask for | What it tells you | What a bad answer looks like |
|---|---|---|
| The property’s valor de referencia | The Catastro publishes it and your lawyer can check it before you sign anything. It tells you whether the 7 % will apply to the price you agreed, or to a higher number. | Nobody has looked, or a promise to "deal with it later". |
| Written confirmation of which tax family applies | Whether the seller is the developer (IVA and AJD) or a private owner (ITP) sounds obvious and occasionally is not, for example on a resale property of an unsold new-build unit still owned by the original developer. | An assumption based on how the property is marketed rather than on who is named as the seller in the contract. |
| How you plan to move the purchase funds | A bank transfer avoids the Modelo S-1 question entirely. If any part of the plan involves cash, this is the moment to raise the declaration duty and the payment ceiling, not after you have already crossed the border. | No plan beyond "I will bring it when I come". |
| Whether your situation touches wealth tax or non-resident income tax at all | Both exist, both are separate from the purchase-tax layer above, and both have their own pages: wealth tax and non-resident income tax. | Silence, or an assumption that buying is the only tax event. |
Bank transfer against carrying cash
Two ways the purchase money can physically arrive, and only one of them avoids a declaration.| Cash | Bank transfer | |
|---|---|---|
| Declaration duty | Modelo S-1, filed in advance, above 10.000 € per person. | None specific to the transfer. |
| Payment ceiling risk | Possibly restricted above a low threshold under Ley 7/2012 art. 7; confirm with your lawyer. | Not applicable; a transfer is not a cash payment. |
| Proving the origin of funds | Harder: cash has no paper trail of its own by the time it arrives. | A bank statement trail your own bank and the Spanish bank both already hold. |
| Practical risk of the trip itself | Carrying a large sum of cash across Europe, undeclared or declared. | None beyond the ordinary risk of travel. |
The rate, not your bill
Every rate above is current as of August 2026. We read it in the Andalusian and national tax law directly, rather than copying it from a commentary, and confirmed it against the 2026 Andalusian budget law, which changed neither the 7 % ITP rate nor the 1,2 % AJD rate. Andalusia sets its own ITP and AJD rates within the national framework. The same purchase in a different autonomous community can carry a different regional rate, even though the underlying national law is identical.This is general information about how the tax applies, not a calculation of what you personally owe. The reference value, the exact completion date and any special circumstance of your purchase all belong to your lawyer’s written advice, not to a published guide. One figure, the cash payment ceiling, is explicitly flagged as unverified rather than stated as settled: do not rely on the number without your own lawyer confirming it.Some topics are left to their own guides: the buying-costs guide covers the full cost total, including notary, registry and lawyer fees. The annual-costs guide covers IBI and the non-resident filing that starts the year after completion. The wealth-tax and inheritance guides cover those two separate tax questions in full.
Most common tax questions
- If I buy an unsold unit from a bank rather than a developer, which tax applies?
- It depends on who legally sells it to you, not on how it is marketed. A bank or a fund holding repossessed new-build stock is usually selling as a business. This can mean IVA still applies, even though the transaction looks like a resale property. This is the kind of case the checklist above exists to catch before completion, not after.
- Does the tax rate change if I buy through a Spanish company instead of personally?
- The purchase tax (ITP or IVA plus AJD) is calculated the same way, no matter who the buyer is. What changes when a company is the buyer is a different set of things entirely: ongoing corporate tax, annual filings, and how a future sale is taxed. That comparison is the topic of the buying-through-a-company guide.
- Is the AJD rate the same everywhere in Spain?
- No. AJD, like ITP, is a regionally set rate within a national framework, so a different autonomous community can set a different percentage. The 1,2 % figure above is specifically Andalusia's current rate, current as of August 2026.
