By COSTA HOUSES Luxury Villas S.L ®
Updated in June 2026 · 8 min. read
Buying a property on the Costa Blanca requires more than simply analysing the sale price. In 2026, buyers must distinguish between new-build property, resale property, luxury real estate, transactions involving non-residents, holiday rentals, patrimonial investment and possible additional costs such as notary, Land Registry, administrative processing or financing.
From 1 June 2026, the purchase of a resale property in the Valencian Community is taxed, as a general rule, at 9% ITP. When the value of the property transferred exceeds €1,000,000, the applicable rate is 11%. In new-build property, the transaction is normally subject to 10% VAT and also to AJD, whose general rate in the Valencian Community becomes 1.4% from that same date. Law 5/2025 of the Generalitat confirms these changes with effect for taxable events accrued from 1 June 2026. (boe.es)
In markets such as Jávea, Moraira, Dénia, Benissa, Calpe, Altea, Alicante and Valencia, where national buyers, international clients, developers, holding companies and investors coexist, understanding these taxes properly helps avoid mistakes, anticipate costs and protect the transaction before signing a reservation agreement, deposit contract or public deed.
The taxation of a real estate purchase depends mainly on whether the property is new-build or resale.
The Spanish Tax Agency distinguishes between used property, where the buyer pays Transfer Tax before the corresponding regional tax authority, and new-build property, which is subject to VAT. (sede.agenciatributaria.gob.es)
Type of transaction | Main tax | General rate 2026 |
|---|---|---|
New-build property | VAT | 10% |
New-build property | AJD | 1.4% |
Resale property | ITP | 9% |
Luxury resale property | ITP | 11% |
Main residence rental | VAT | Exempt |
Holiday rental with hotel-type services | VAT | 10% |
Real estate agency fees | VAT | 21% |
This table is for general guidance only. Each transaction must be reviewed according to the type of property, the seller’s status, the cadastral reference value, the intended use, the purchase structure and the available legal documentation.
ITP is the main tax on the purchase of resale properties. On the Costa Blanca, it directly affects buyers of resale homes in Jávea, Moraira, Dénia, Benissa, Calpe, Altea, Alicante, Valencia and the rest of the Valencian Community.
From 1 June 2026, the general ITP rate in the Valencian Community is 9% for property acquisitions. However, when the value of the property transferred, or the real right created or assigned over the property, exceeds €1,000,000, the applicable rate is 11%. (boe.es)
Price or taxable value | ITP rate | Approximate amount |
|---|---|---|
€500,000 | 9% | €45,000 |
€750,000 | 9% | €67,500 |
€950,000 | 9% | €85,500 |
€1,000,000 | 9% | €90,000 |
€1,200,000 | 11% | €132,000 |
€2,000,000 | 11% | €220,000 |
In the luxury villa market, this difference is especially important. A transaction above €1,000,000 may be subject to 11% ITP, so the buyer should calculate the real cost before committing to a reservation or signing a private contract.
When buying a new-build property directly from a developer, the transaction is not subject to ITP, but to VAT. As a general rule, new-build residential property is taxed at 10% VAT, which is added to the purchase price.
In addition, in the Valencian Community, Stamp Duty — AJD, Impuesto de Actos Jurídicos Documentados — must also be considered. From 1 June 2026, the general AJD rate becomes 1.4%. (boe.es)
Concept | Rate | Approximate amount |
|---|---|---|
Purchase price | — | €1,500,000 |
VAT | 10% | €150,000 |
AJD | 1.4% | €21,000 |
Main taxes total | — | €171,000 |
Notary, Land Registry, administrative processing if applicable, valuation in the case of financing and other costs linked to the formalisation of the transaction must be added to these amounts.
Resale property is normally not subject to VAT, but to ITP. This applies even if the seller is a company, provided that the transaction is a second or subsequent transfer and there are no special circumstances requiring a different tax treatment.
One of the most common mistakes is assuming that “if a company sells, there is always VAT”. This is not necessarily the case. What matters is not only who sells, but the nature of the property, whether it is a first or subsequent transfer, the use of the asset, the seller’s tax status and the possible existence of a waiver of the VAT exemption.
When buying a resale property, ITP is not always calculated solely on the price agreed between buyer and seller. Article 10 of the consolidated text of the ITPAJD Law establishes that, in the case of real estate, the value will be the cadastral reference value provided under the cadastral regulations at the date the tax becomes due. If the declared value, agreed price or consideration is higher than the reference value, the higher amount is taken as the taxable base. (boe.es)
This means that before signing a reservation agreement or deposit contract, it is advisable to check whether the property has a cadastral reference value and whether it exceeds the real purchase price.
In a unique property, a renovated villa, a Mediterranean finca, a home with sea views or a property in a prime area, the reference value may not reflect all the real nuances of the asset. However, from a tax perspective, it may determine the taxable base.
For this reason, in high-value properties in Jávea, Moraira, Dénia, Benissa or Altea, it is advisable to review this figure before negotiating the final price, structuring the deposit contract or calculating the total acquisition cost.
Key aspect | New-build property | Resale property |
|---|---|---|
Main tax | VAT | ITP |
Usual rate | 10% | 9% or 11% |
AJD | Yes | Generally no |
Usual seller | Developer | Private individual or company |
Main risk | VAT + AJD | Reference value |
Impact in luxury market | High due to price | High if over €1,000,000 |
This comparison helps explain why two properties with the same price may have different tax costs. A new-build villa priced at €1,200,000 is not analysed in the same way as a resale villa priced at €1,200,000.
In addition to VAT, ITP or AJD, the buyer must also anticipate other formalisation costs.
The most common are notary fees, Land Registry fees, administrative processing if financing or professional processing is involved, and valuation when applying for a mortgage. In transactions with international buyers, there may also be costs linked to translations, powers of attorney, bank account opening, fiscal representation or legal coordination.
Transaction | Main taxes | Other costs |
|---|---|---|
Resale up to €1,000,000 | ITP 9% | Notary, registry, gestoría |
Resale above €1,000,000 | ITP 11% | Notary, registry, gestoría |
New-build property | VAT 10% + AJD 1.4% | Notary, registry, gestoría |
Purchase with mortgage | Depending on property | Valuation and financing costs |
The Costa Blanca attracts buyers from the Netherlands, Belgium, Germany, France, Switzerland, the United Kingdom, the United States and other international markets. For these profiles, Spanish taxation must be explained clearly before signing.
A foreign buyer needs an NIE to formalise the purchase and pay taxes. In addition, if buying from a non-resident seller, the 3% withholding on the agreed consideration must be reviewed. The Spanish Tax Agency states that the buyer of a property owned by a non-resident must withhold and pay 3% as an advance payment of the tax corresponding to the non-resident seller, through Form 211. (sede.agenciatributaria.gob.es)
This point is especially relevant in luxury transactions, where both buyer and seller may be non-residents and the transaction requires coordination between agency, lawyer, tax adviser, notary and bank.
The rental of a property intended for stable and permanent use as a main residence is exempt from VAT. This rule changes if the property is used for professional, business or incorrectly structured corporate purposes.
For example, a property rented as a professional office, consultation room, office or corporate accommodation without specific identification of the final user may lose the exemption and become subject to VAT. The Spanish Tax Agency indicates that mixed use as housing and professional office may be taxed at 21%. (sede.agenciatributaria.gob.es)
Does the contract truly reflect permanent residential use, or is there professional, business or mixed use?
This distinction must be clarified from the outset, especially in high-value properties rented to executives, companies, holding companies or international clients.
Holiday rentals deserve special attention in areas such as Jávea, Moraira, Dénia, Benissa, Calpe and Altea, where rental yield forms part of the analysis for many owners and investors.
The key is to distinguish between the mere letting of the property and the provision of services typical of the hotel industry.
The Spanish Tax Agency states that, if services typical of the hotel industry are provided, the rental of a tourist apartment is not exempt from VAT and must be taxed at the reduced rate of 10%. (sede.agenciatributaria.gob.es)
Service | VAT risk |
|---|---|
Continuous reception | High |
Periodic cleaning | High |
Periodic linen change | High |
Catering or breakfast | High |
Cleaning only at check-in and check-out | Low |
Linen change only at check-in and check-out | Low |
The tax classification must be reviewed according to the actual operating model, the services offered, the tourist licence, the operational management and the contractual documentation.
Commercial premises and offices usually have a different tax treatment from residential property. The rental of commercial premises is subject to VAT at 21% as a general rule.
In a sale and purchase, the situation may vary depending on whether the premises are new, used, transferred by a private individual, company, business owner, developer or investor. It may also be necessary to analyse whether a waiver of the VAT exemption or reverse charge mechanism applies.
This point is relevant in mixed-use assets, commercial premises converted into housing, lofts, properties with a change of use, buildings with several units or properties partially linked to an economic activity.
In certain transactions between businesses or professionals, especially involving commercial premises, warehouses, offices, plots or assets linked to an economic activity, it may be possible to waive the VAT exemption.
Why can this be attractive? Because VAT may be deductible if the buyer has the right to deduct, whereas ITP is usually a final cost.
In these transactions, the reverse charge mechanism may apply. This means that the seller does not charge VAT in the ordinary way; instead, the buyer self-assesses the tax under the applicable tax rules.
Real estate agency fees are, as a general rule, subject to 21% VAT.
This applies whether the client is a private individual, company, developer, investor or foreign buyer, provided that it is a professional service subject to Spanish VAT.
Professional fees must be defined in writing from the beginning of the transaction, indicating the taxable base, applicable VAT, moment of accrual and payment conditions.
As a general guide, a buyer of resale property in the Valencian Community should budget the purchase price plus the corresponding ITP, which from 1 June 2026 is 9% as a general rule and 11% when the value of the property exceeds €1,000,000, in addition to notary, registry and other costs.
For new-build property, the buyer should budget the purchase price plus 10% VAT, 1.4% AJD from 1 June 2026 and the additional formalisation costs.
Type of purchase | Price | Main tax | Approximate tax cost |
|---|---|---|---|
Resale property | €750,000 | ITP 9% | €67,500 |
Luxury resale property | €1,200,000 | ITP 11% | €132,000 |
New-build property | €750,000 | VAT 10% + AJD 1.4% | €85,500 |
Luxury new-build property | €1,500,000 | VAT 10% + AJD 1.4% | €171,000 |
These calculations do not include notary, Land Registry, administrative processing, valuation, financing or possible specific legal or tax costs.
Before committing any amount of money, the buyer should know whether the transaction is subject to VAT, ITP or AJD; whether the property is new-build or resale; whether the value exceeds €1,000,000; whether there is a cadastral reference value; whether the seller is resident or non-resident; whether there are charges, mortgages, urban planning issues or documentary limitations; and whether the intended use will be main residence, second home, holiday rental, investment or professional activity.
In high-value properties, this review should be carried out before signing, not afterwards.
In today’s real estate market, especially in the premium segment, clients are not simply looking for an agency to publish a property. They are looking for judgement, anticipation, confidentiality and the ability to detect risks before they become problems.
COSTA HOUSES Luxury Villas S.L ® works from a patrimonial perspective of the real estate transaction. Each property requires an individual reading: legal situation, documentation, taxation, positioning, commercial narrative, buyer profile, reference value, applicable taxation and negotiation strategy.
The aim is not to replace the tax or legal adviser, but to coordinate the transaction with the relevant professionals so that buyer and seller can make informed, secure decisions aligned with the true value of the asset.
From 1 June 2026, the general ITP rate in the Valencian Community is 9% for property acquisitions. If the value of the property transferred exceeds €1,000,000, the applicable rate is 11%. (boe.es)
For resale property, the buyer pays ITP. From 1 June 2026, the general rate is 9% in the Valencian Community, except for properties valued above €1,000,000, which are taxed at 11%. Notary, registry and other formalisation costs must also be added.
For new-build property purchased directly from a developer, the buyer normally pays 10% VAT and also AJD. In the Valencian Community, from 1 June 2026, the general AJD rate is 1.4%. (boe.es)
For real estate, the taxable base is determined by taking the cadastral reference value at the date the tax becomes due. If the agreed price, declared value or consideration is higher, the highest of these amounts is used. (boe.es)
In the Valencian Community, if the value of the property exceeds €1,000,000, the applicable ITP rate is 11%. This is why luxury villa transactions must be reviewed with particular care before signing a reservation agreement or deposit contract.
As a general rule, no. Second and subsequent transfers of property are usually taxed through ITP, not VAT, except in specific cases that must be analysed individually.
Yes. If purchased directly from a developer, new-build residential property is normally subject to 10% VAT. In addition, in the Valencian Community, AJD must be taken into account, with a general rate of 1.4% from 1 June 2026.
It depends. If only the property is made available, it may be exempt from VAT. If services typical of the hotel industry are provided, it may be subject to 10% VAT. (sede.agenciatributaria.gob.es)
The buyer must review whether the 3% withholding must be applied and paid through Form 211 when buying a property owned by a non-resident seller.
Yes. Taxation should be reviewed before assuming financial commitments, especially in transactions involving new-build property, investment, holiday rental, companies, non-resident sellers or luxury villas above €1,000,000.
Buying a property on the Costa Blanca in 2026 requires more precision than ever. Knowing the sale price is not enough. It is necessary to understand whether the transaction is subject to VAT, ITP or AJD; whether the property exceeds €1,000,000; whether there is a cadastral reference value; whether the seller is resident or non-resident; and what the actual use of the property will be.
In areas such as Jávea, Moraira, Dénia, Benissa, Calpe, Altea, Alicante and Valencia, where many transactions involve international buyers, companies, patrimonial investment, new-build property, holiday rentals and high-value assets, real estate taxation must form part of the strategy from the very beginning.
COSTA HOUSES Luxury Villas S.L ® accompanies owners, buyers and investors with a strategic, professional and discreet vision, coordinating each transaction with the relevant tax and legal advisers whenever the structure of the purchase requires it.
Informative content updated in June 2026. Real estate taxation may vary depending on the autonomous community, type of transaction, seller status, property value, intended use, buyer’s legal structure and applicable regulations at the time the tax becomes due. Before signing a transaction, each specific case should be verified with specialised tax and legal advice.
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