Purchase Costs in the Valencian Community

What additional costs should you expect when buying a property in Spain?

Anyone purchasing a property in the Valencian Community should take into account not only the purchase price but also the taxes and associated costs. The final amount depends mainly on whether the property is a resale property, a new-build home or a plot of land.

For a resale property, buyers should generally allow for purchase costs of between 11 % and 13 %. For new-build properties, the total costs are usually between 12 % and 14 % due to VAT and stamp duty.

Buying a Resale Property

When purchasing a resale property, Property Transfer Tax (Impuesto sobre Transmisiones Patrimoniales – ITP) applies. In the Valencian Community, the current general rate is 9 %, or 11% for properties priced at €1 million or more .

Additional costs usually include:

  • Notary fees
  • Land Registry fees
  • Administrative management fees (Gestoría)
  • Powers of attorney and translations, if required
  • Bank and financing costs

The direct acquisition costs are often around 10 % of the purchase price. In practice, however, buyers should allow between 11 % and 13 %, as additional expenses may arise for financing, legal advice, translations, powers of attorney or technical inspections.

Buying a New-Build Property

When purchasing a new-build property directly from a developer, Property Transfer Tax does not apply. Instead, buyers currently pay 10 % VAT (IVA) and 1.4 % Stamp Duty (AJD).

Notary, Land Registry and administrative management fees must also be taken into account. As a result, the total acquisition costs for new-build properties are generally between 12 % and 14 % of the purchase price.

Buying a Plot of Land

The taxation of a plot depends on whom the seller is.

  • Plot purchased from a private individual: 9 % Property Transfer Tax (ITP)
  • Plot purchased from a company or developer: 21 % VAT (IVA)

When purchasing land, it is particularly important to review the planning and tax situation in advance, as specific conditions may apply depending on the type of land and its intended use.

The Cadastral Reference Value (Valor de Referencia)

Property Transfer Tax in Spain is calculated by taking into account the so-called Valor de Referencia del Catastro (Cadastral Reference Value).

The Spanish Tax Authority requests this value for every property transaction and compares it with the purchase price stated in the title deed. The higher of the two values is always used for tax purposes.

If the Cadastral Reference Value is higher than the purchase price, the tax will be calculated on the reference value. If the purchase price is higher, the purchase price will be used instead.

For this reason, it is advisable to check the Cadastral Reference Value before signing a purchase contract in order to estimate the actual acquisition costs accurately.

Practical Examples

Resale property with a purchase price of €250,000

  • Property Transfer Tax (9 %): €22,500
  • Notary, Land Registry and Gestoría: approx. €1,500 to €2,000
  • Additional costs depending on the individual situation
  • Total purchase costs: usually between €27,500 and €32,500

Resale property with a purchase price of €400,000

  • Property Transfer Tax (9 %): €36,000
  • Notary, Land Registry and Gestoría: approx. €2,000 to €2,500
  • Additional costs depending on the individual situation
  • Total purchase costs: usually between €44,000 and €52,000

The actual costs will depend on factors such as financing, powers of attorney, translations and the specific circumstances of the transaction.

Conclusion

The purchase price of a property is only part of the overall investment. Buyers should also consider acquisition costs, tax implications and the review of all relevant documentation before signing a contract.

In particular, the Cadastral Reference Value can have a significant impact on the amount of Property Transfer Tax payable. Careful preparation helps avoid unexpected costs and allows buyers to calculate the true cost of their purchase more accurately.

We would be delighted to advise you personally on the expected acquisition costs and support you throughout the entire buying process. With more than 20 years of experience in Alcossebre and on the Costa del Azahar, Villas Azahar will assist you from the first viewing through to the completion of the purchase before a notary.