The real math with ITP, plusvalía, and capital gains reinvestment rules.
Spain’s Impuesto de Transmisiones Patrimoniales (ITP) — the property transfer tax on resale homes — varies by region from 6% to 10%. Combined with notary fees and registry charges, total closing costs typically reach 10% of the purchase price. For new-build properties, IVA (VAT) at 10% applies instead, plus 1-1.5% in stamp duty (AJD).
Capital gains on your home are taxed at progressive rates from 19-28% unless you reinvest the full proceeds in a new primary residence within two years. This reinvestment exemption is Spain’s version of a primary residence exclusion — but it requires you to actually buy again, not just pocket the gain.
When selling, you’ll also face the plusvalía municipal — a local land value tax. Mortgage interest is not deductible for properties purchased after 2013. Banks typically finance up to 80% for residents and 70% for non-residents.