The 2026 Tax Break: What the ITP Reduction Means for Costa Blanca Property Buyers

The Costa Blanca property market enters the second half of 2026 with a clear tailwind for buyers: lower transaction taxes in the Valencian Community.

From 1 June 2026 the regional government has reduced the general Property Transfer Tax (ITP) on resale properties from 10% to 9% for homes up to €1 million. Stamp Duty (AJD) on notarial deeds also drops from 1.5% to 1.4%.

On a €400,000 resale purchase that is a direct saving of €4,000 in ITP alone. For a €700,000 villa the saving is €7,000. These are real, immediate reductions in the cost of buying that were not available in 2025.

Why this matters now

Interest rates have stabilised and in many cases eased since the peaks of 2023–2024. Combined with continued strong demand from Northern European buyers and very limited new supply in the most desirable coastal towns, the market remains firm. Prices are still expected to rise in the low-to-mid single digits in most areas, with premium pockets in the North (Moraira, parts of Jávea, Altea Hills, Benissa Costa) continuing to outperform.

The tax cut lowers the effective purchase price at exactly the moment when financing is becoming slightly more affordable again. For buyers who have been on the fence because of high upfront costs, this is one of the most concrete positive changes in several years.

Who benefits most

Resale buyers under €1 million — The 9% ITP rate applies to the general rate on second-hand homes up to that threshold. Above €1 million the higher rate (usually 11%) still applies.

Buyers in the Valencia Region — This includes the entire Costa Blanca (Alicante province). Neighbouring regions like Murcia have their own (often lower) rates, but the Valencian cut makes the Costa Blanca more competitive than it was last year.

Investors and lifestyle buyers alike — The saving is the same whether you are buying a holiday home or a rental investment. For investors the lower entry cost improves the overall return on capital from day one.

New-build purchases are taxed differently (10% IVA + AJD), so the ITP cut does not apply to off-plan or new construction from developers. If you are choosing between a finished resale and a new build, the tax math now tilts further toward resale in many cases.

Timing your purchase

The reduction came into force on 1 June 2026.

• Purchases completed before that date were still charged at the old 10% / 1.5% rates.
• Purchases signed and completed after 1 June benefit from the lower rates.

If you are already in advanced negotiations on a property, your lawyer will have advised on the exact timing of the escritura (deed signing). In practice, most buyers who were ready in early 2026 but waited are now seeing the benefit.

The market has not suddenly become “cheap” because of this change — prices are still moving upward in desirable locations — but the one-off saving is meaningful and permanent. It is the equivalent of negotiating several thousand euros off the price without having to ask the seller to reduce their asking price.

Practical checklist for the tax change

1. Confirm the property qualifies as a standard resale (not new build, not commercial, not land).
2. Verify the declared value in the escritura matches the actual purchase price (tax is calculated on the higher of the two in most cases).
3. Ask your lawyer to model the exact ITP + AJD + notary + registry + gestor fees for your specific price and municipality.
4. If you are financing, check whether your bank’s valuation and the tax authorities’ valuation are aligned — differences can affect how much tax you actually pay.
5. Factor the saving into your total cost of purchase when comparing properties or locations. A €450k villa in Moraira with the new tax rate can have a lower effective entry cost than the same villa would have had in 2025.

Other costs that still matter

The tax cut is welcome, but it sits alongside the usual 10–13% of additional purchase costs on the Costa Blanca:

• Notary, registry and gestor fees (typically €1,500–€3,500 all-in)
• Legal fees (1–1.5% if you use a lawyer — strongly recommended)
• Ongoing costs: IBI (property tax), community fees, insurance, maintenance, and any renovation or energy upgrade work

The new lower ITP makes the total upfront outlay more manageable, which is particularly helpful for buyers using a mortgage or who want to keep more cash for furnishing, upgrades or reserves.

Bottom line

The June 2026 ITP and AJD reductions are one of the most buyer-friendly policy changes the Costa Blanca has seen in recent years. They directly reduce the cost of entry for resale properties without changing the underlying supply-and-demand dynamics that continue to support prices in the best locations.

If you have been watching the market and waiting for a clearer signal, this is a tangible improvement in the numbers. It does not mean every property is a bargain, and it does not remove the need for proper due diligence on licences, energy performance, community finances and legal title. But it does mean that, all other things being equal, the effective price of buying a resale home on the Costa Blanca is now lower than it was twelve months ago.

Speak with our team for current opportunities and precise costings that include the new tax rates. We will show you the real numbers for the properties you are considering, including exactly how much the June 2026 change saves you on each one.