For any foreign buyer looking to purchase property in Torrevieja or other areas of the Valencian Community, understanding the taxes payable during the transaction is crucial. Knowing them from the outset allows you to avoid surprises and accurately calculate the total cost of the investment. The Valencian Community has unique tax regulations that distinguish it from other regions of Spain, making a clear guide essential, especially for those coming from different tax systems.
Property Transfer Tax (ITP)
When buying a second-hand home, the buyer must pay the ITP, which in the Valencian Community is currently 10% of the price of the home.
There are reduced rates of 8% for certain cases (young people, large families or people with disabilities), but they usually only apply if the buyer is a tax resident in Spain.
VAT and Stamp Duty on new homes
If the property is newly built, the taxes change:
VAT: 10% of the purchase price.
AJD (Documented Legal Acts): 1.5% in the Valencian Community.
This tax is levied on the signing of the deed and its registration. Foreign buyers are often unaware of this double taxation, so proper planning is crucial.
Other tax costs to consider
- Municipal capital gains tax
Although this tax is paid by the seller, it is important for the buyer to understand it to avoid confusion, especially when the seller and buyer are negotiating who will assume certain expenses.
- Notary and registry costs
These aren’t taxes, but they do affect the final cost. They usually range from 800 to 1,500 euros depending on the property price.
- Future taxes as a property owner
Foreign buyers should be aware that, once they have purchased the property, they will have to pay:
IBI (annual municipal tax)
Non-Resident Income Tax (IRNR) if they are not tax residents in Spain
Why is it important to have legal advice?
For many international buyers, these taxes can be unfamiliar or difficult to understand. At A&G Lawyers, we explain each step clearly, verify the amounts are correct, and guide the buyer through the entire process to avoid errors or overpayments.
If you are thinking of buying a home on the Spanish coast, knowing the taxes is essential for a safe and well-planned purchase.
Request an appointment with A&G Lawyers and receive comprehensive advice on the expenses and taxes of your future home.
