New reduction in the Property Transfer Tax in the Valencian Community: How much money do you save when buying your house on the beach?

Buying a home on the Mediterranean coast has always been a decision that combines quality of life with a sound investment. However, in addition to the property price, there are several expenses associated with the purchase that can significantly impact the final cost. Among these, one of the most important is the Property Transfer Tax (ITP) , which applies to the purchase of resale properties.

The Valencian Community has recently approved a tax reform that reduces this tax and establishes new benefits for certain groups. This measure represents direct savings for thousands of buyers wishing to purchase a home in this area, one of the most sought-after locations for both national and international buyers.

If you are considering buying a house by the sea, understanding how this tax break works can help you better plan the transaction and more accurately calculate the real cost of the purchase.

Tax reform on the Costa Blanca: What exactly has changed with the ITP?

The Property Transfer Tax is a regional tax levied on the purchase of second-hand properties . Its amount is calculated by applying a percentage to the property's value, so any change in the tax rate has a direct impact on the buyer's finances.

The reform approved by the Valencian regional government introduces a reduction in the general tax rate and expands certain tax advantages for specific groups. The aim is to facilitate access to housing and improve the competitiveness of the Valencian real estate market compared to other autonomous communities.

In an area like the Costa Blanca , where the demand for housing remains high and where thousands of real estate transactions take place every year, this price reduction represents a particularly interesting opportunity for those looking to acquire a second home or establish their home permanently.

Goodbye to 10%: The new general rate of 9% for second-hand homes

The main change is the reduction of the general Property Transfer Tax (ITP) rate from 10% to 9% for the purchase of second-hand homes. Although a difference of one percentage point may seem small at first glance, the savings can be considerable when applied to the total value of the property.

For example:

• €200,000 house:

  • Previously: 20,000 euros of ITP.

  • Now: 18,000 euros of ITP.

  • Savings: 2,000 euros.

• €500,000 house:

  • Previously: 50,000 euros of ITP.

  • Now: 45,000 euros of ITP.

  • Savings: 5,000 euros.

This saving can be used for other expenses associated with the purchase, such as renovations, furniture, equipment, or even to reduce the amount of financing needed.

Reduced rates: Groups that pay even less tax in the Valencian Community

In addition to the general reduction, Valencian regulations include reduced rates for certain groups who meet specific requirements. These measures aim to facilitate access to primary housing and offer tax support to families and individuals with particular needs.

Bonuses for young people under 35 (Primary residence)

One of the groups that benefit most from the reform are young buyers.

The difficulty in accessing housing is one of the main concerns of younger generations, especially in areas with high real estate pressure. To encourage first-time homeownership, the Valencian Community maintains more advantageous tax conditions for those under 35 who meet the requirements established by law.

Thanks to these reduced rates, the tax cost of the transaction can be significantly lower than the standard rate. For many buyers, this difference can mean the possibility of owning a home several years earlier than expected.

Special rates for large families, single-parent families and people with disabilities

Valencian legislation also includes tax benefits for groups requiring special protection. These include:

• Large families.

• Single-parent families.

• People with recognized disabilities.

• Certain cases of social vulnerability contemplated by regional legislation.

The purpose of these measures is to adapt the tax burden to the personal circumstances of each buyer and to facilitate access to housing suited to their needs.

Officially protected housing (VPO): How does this reform affect them?

Social housing (VPO) can also benefit from more favorable tax treatment, provided the conditions stipulated by regional regulations are met. The Valencian Community maintains reduced tax rates for certain transactions related to this type of property, especially when it is intended as a primary residence and the buyer meets the required criteria.

However, the conditions may vary depending on the housing protection status and the buyer's personal circumstances. Therefore, before finalizing the purchase, it is advisable to review which tax benefits apply in each case and what documentation will be required to prove them.

Seeking expert advice during this phase is highly recommended, as proper planning allows you to take full advantage of the benefits provided by current legislation and avoid errors that could affect the tax settlement.

Does this change affect newly built homes?

The answer is, in general, no . The Property Transfer Tax applies to the purchase of second-hand homes, while newly built homes are normally taxed by VAT and the Stamp Duty (AJD) , except in certain cases provided for by tax legislation.

In practice, this means that those who purchase a new home directly from the developer will not be able to benefit from the reduction of the general ITP rate to 9%, since the transaction will be subject to a different tax regime.

Evaluating all these factors together allows for a more informed decision that is tailored to the needs of each buyer.

Plan your secure purchase on the coast with Larrosa & Co

Buying a home involves much more than just finding the right property. It's a process that includes legal, tax, urban planning, and financial aspects that should be reviewed in detail before signing any contract.

At Larrosa & Co we accompany our clients throughout the entire buying process on the Costa Blanca, offering personalized advice that covers everything from the search for the property to the signing before a notary.

Our team helps analyze each transaction individually, clearly explaining applicable taxes, associated purchase and sale expenses, and potential tax advantages based on the buyer's profile. This way, our clients can make decisions with greater peace of mind and confidence , knowing the true cost of their investment at all times.

Furthermore, thanks to our in-depth knowledge of the Costa Blanca real estate market , we help both national and international buyers find homes that suit their objectives, whether as a primary residence, second home, or investment.

Conclusion: The ideal time to buy in the Mediterranean

The recent reduction in Property Transfer Tax is good news for those considering buying a second-hand home in the Valencian Community. The decrease in the general rate from 10% to 9% reduces the tax burden of the transaction and offers savings that can reach several thousand euros, depending on the property's value.

If you're considering buying a property on the Costa Blanca , understanding how this reform affects your specific situation can help you optimize your investment from the outset. Analyzing the tax implications, calculating all associated costs, and seeking professional advice are essential steps for a secure purchase and maximizing the benefits offered by current regulations.

At Larrosa & Co, we offer our extensive experience in the Mediterranean coastal real estate market to guide you through every step of the process and help you find the perfect home to suit your needs. Contact our team today and rest assured that every decision is based on sound, well-planned research.

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