The Costs & Taxes of Buying on the Costa Blanca — A Complete 2026 Breakdown

Two questions dominate every first conversation we have with UK buyers. The first: “what will it really cost me, on top of the price?” The second, asked with more anxiety every year since January 2025: “is Spain actually going to charge foreigners 100% tax?”

Both deserve straight answers. Here is the short one, then the detail.

The short answer

For a property in the Valencian Community — which is what the Costa Blanca is, for tax purposes — budget on top of the purchase price:

	Resale property	New build
Purchase tax	9% ITP	10% IVA + 1.4% AJD
Lawyer (~1% + IVA), notary, registry, gestoría	~1.5–2%	~1.5–2%
Total to budget	~10.5–11%	~13–13.5%

Add roughly another 1% if you’re buying with a Spanish mortgage (valuation plus any arrangement fee).

Worked example — an €800,000 resale villa in Jávea or Moraira, cash purchase:

Item	Basis	Approximate cost
ITP transfer tax	9%	€72,000
Independent lawyer	~1% + 21% IVA	~€9,700
Notary	official tariff	~€1,000–1,800
Land registry	official tariff	~€700–1,600
Gestoría	fixed fee	~€300–600
Total		~€84,000–86,000 (≈10.6%)

The same property bought as a new build would carry €80,000 of IVA plus €11,200 of AJD stamp duty instead of the ITP — roughly €104,000 all-in, or about 13%.

Now the question behind the question.

”Is Spain charging 100% property tax?” — what’s actually true

Status as of 7 July 2026: the proposed tax on non-EU buyers is not law. It has never been voted on, in either chamber of the Spanish parliament. The most recent dated reporting we could find (late May 2026) confirms the bill remains parked exactly where it was registered a year earlier.

What happened, in order:

January 2025. Prime Minister Pedro Sánchez announced twelve housing measures, one of which was to “limit purchases of housing by non-resident, non-EU foreigners” by raising the tax burden on such purchases “up to 100% of the property’s value”. English-language headlines compressed this into “Spain to charge foreigners 100% tax” — dropping two qualifiers that matter enormously.

Who it would actually cover. The proposal targets buyers who are both non-EU nationals and not resident in Spain. A UK national who is legally resident in Spain — on a Non-Lucrative Visa, Digital Nomad Visa or any other route — would not be in scope. New-build purchases would fall outside it entirely, because they are taxed through IVA rather than transfer tax. And the draft mechanism, when it finally appeared in a bill, was not “pay the property’s value again on top of the price”: it was a 100% tax rate against a taxable base with existing transfer tax creditable against it — in effect roughly doubling the purchase-tax cost, severe but very different from the headline.

May 2025. A bill (proposición de ley, parliamentary file 122/000196) was registered in the Congreso de los Diputados by the PSOE parliamentary group — notably a private member’s bill from the governing party’s own group, not a formal government bill.

Since then: nothing. The bill has never been scheduled for its mandatory first plenary vote, has no committee assignment, has never reached the Senate, and has not been published in the BOE (Spain’s official gazette — where a law must appear to exist). Reuters reported in March 2026 that it had stalled outright: the government lacks a parliamentary majority, coalition partner Junts withdrew support, and it was left out of the government’s January 2026 housing package. Legal commentators have separately argued it would collide with the Spanish Constitution’s bar on confiscatory taxation and with the EU’s free movement of capital rules, citing a 2014 European Court of Justice ruling against Spain on nationality-based tax discrimination.

What a UK buyer should actually do about it. Budget on today’s real rates — the ones in this guide — because those are the only rates that exist. If the measure ever moves, it must pass a full, public parliamentary process first; there will be months of visible notice, and this page will be updated the week anything changes. Buyers who remain nervous have two structural outs already noted above: new builds sit outside the proposal’s scope, and so does anyone who takes up Spanish residency before buying. What we’d counsel against is paying a premium, or rushing a purchase, to “beat” a tax that has spent eighteen months failing to reach a first vote.

Purchase taxes: what you pay on completion day

Resale property — ITP at 9%

Buying a second-hand home anywhere in the Valencian Community, you pay ITP (Impuesto de Transmisiones Patrimoniales). The regional government cut the general rate from 10% to 9% with effect from 1 June 2026, under Ley 5/2025 — a deliberate move to attract buyers, and worth roughly €8,000 on an €800,000 purchase compared with completions before that date.

Two details matter. First, the applicable rate is fixed by the date you sign the escritura (title deed) at the notary — not the reservation or private purchase contract. Second, above €1,000,000 the rate steps up to 11% — directly relevant at the top of the Costa Blanca North market. This band predates Ley 5/2025: it was introduced by Ley 8/2022, de 29 de diciembre, de medidas fiscales, de gestión administrativa y financiera, y de organización de la Generalitat, effective 1 January 2023, and Ley 5/2025 left it untouched — the 2025 law only cut the ≤€1,000,000 general rate from 10% to 9% and AJD from 1.5% to 1.4%.

(Reduced ITP rates — 6% and 4% — exist for young first-time buyers of modest primary residences, but the price caps of €180,000 mean they almost never apply to this market.)

New build — IVA at 10% plus AJD at 1.4%

A new home bought from a developer carries no ITP. Instead you pay IVA (VAT) at 10% — a state tax, identical across mainland Spain — plus AJD stamp duty, which the Valencian Community also cut on 1 June 2026, from 1.5% to 1.4%. Combined: 11.4% in tax before fees, against 9% for a resale. The gap is the main reason a like-for-like new build costs more to transact, and it’s not negotiable — both taxes are calculated on the deed price.

The professional fees

• Independent lawyer — the standard convention quoted to foreign buyers on the Costa Blanca is 1% of the purchase price plus 21% IVA, with fixed minimums for cheaper properties. Non-negotiable in our view as a line item: your lawyer is the only party in the transaction working solely for you.
• Notary — fees are set by official tariff and scale gently with price: roughly €1,000–1,800 at the €800,000 level.
• Land registry — also tariff-regulated, typically a little less than the notary: ~€700–1,600 in this bracket.
• Gestoría — the administrative firm that files the taxes and shepherds the deed to the registry (banks insist on one for mortgaged purchases): a fixed ~€300–600.
• Mortgage costs — since Spain’s 2019 mortgage law (Ley 5/2019), the lender pays the mortgage deed’s stamp duty, notary and registry costs. The buyer pays the property valuation (~€300–600, more on high-value homes) and any bank arrangement fee (0–2% of the loan; frequently waived).

What it costs to own, year by year

IBI — the council tax. Charged by your town hall on the cadastral value (an administrative value, usually well below market value), at a rate each municipality sets within a national band of 0.4%–1.1%. Confirmed Costa Blanca North rates: Dénia 1.05%, Calpe 0.867%, Altea 0.70%, Teulada-Moraira ~0.51%. Most Alicante-province municipalities delegate collection to SUMA, the provincial collection agency, with the payment window running roughly late July to early October; set up a direct debit and forget about it. Jávea (Xàbia) is the flagship exception on this coast: together with Alicante city and Elx, it is one of only three municipalities in the province that collect their own local taxes independently rather than delegating to SUMA. Jávea’s IBI is billed and payable via its own portal, xabia.tributoslocales.es, run by Gestión Tributaria Territorial — check there directly, not SUMA, for the current rate and payment dates. Typical bills for a quality villa run from several hundred euros to around €2,000 a year depending on town and cadastral value.

Non-resident imputed income tax — the one everyone forgets. If you own a Spanish home and are not tax-resident in Spain, the Agencia Tributaria taxes you annually on a notional rental value even if the property is never let: 1.1% of cadastral value (2% where the town’s values haven’t been revised since 2012) is deemed to be income, and that deemed income is then taxed at 24% for non-EU residents — which post-Brexit includes every UK owner — against 19% for EU/EEA residents. On a typical Costa Blanca villa this lands in the hundreds of euros a year, not thousands. It’s filed on Modelo 210, due by 31 December of the following year (the 2025 liability is due by 31 December 2026), and it is the single most commonly missed obligation among British owners.

Community fees. For an apartment in a complex with pool and gardens, typically €120–250 a month; a villa on an urbanisation with shared services, €100–300 a month; a detached villa on its own plot may pay nothing at all, and luxury developments with concierge services can exceed €500. One-off derramas (special assessments for major works) come on top — your lawyer should check the community’s minutes for any that are brewing before you buy.

Wealth tax — now largely irrelevant below €1M. The Valencian Community raised its wealth-tax exemption from €500,000 to €1,000,000 per person under the same Ley 5/2025, effective for wealth held at 31 December 2025 onwards, on top of a €300,000 main-home allowance for residents. A couple owning an €800,000 villa jointly sits €600,000 per head below the threshold before counting anything else. Above the exemption, Valencia applies its own progressive scale (0.25%–3.5%). Separately, the national solidarity tax on fortunes above €3 million (effectively ~€3.7M after allowances; rates 1.7%–3.5%, with regional wealth tax paid credited against it) remains in force for 2026 — relevant only at the very top of the market, and a conversation for a tax adviser, not a guide.

A favourable update worth flagging to non-resident owners: a TEAC (Tribunal Económico-Administrativo Central) resolution of 18 December 2025 — following Spanish Supreme Court rulings in October and November 2025 — extended the 60% IRPF/wealth-tax joint “shield” cap (which limits combined income and wealth tax liability) to non-resident taxpayers for the first time. UK owners who have paid wealth tax in recent years without the benefit of this cap may now have grounds for a refund claim.

Home insurance. Not legally required unless mortgaged (lenders require buildings cover). Typical Costa Blanca villa premiums of roughly €300–800 a year are widely quoted in advisory content.

When you eventually sell — a preview

Three things await the non-resident seller, covered fully in our selling guide but worth knowing before you buy:

• Plusvalía municipal — a town-hall tax on the growth in the land’s value while you owned it. Since the 2021 reform you may elect the lower of two calculations (an objective cadastral formula, or your real gain), and no tax is due if you can show no gain — but you must actively claim both; neither applies automatically. A rise in the calculation coefficients planned for 2026 was rejected by Congress in January 2026, so the 2024 table still applies. Quirk: when the seller is non-resident, the law makes the buyer the substitute taxpayer — which is why your lawyer retains the estimated plusvalía from the seller’s funds at completion.
• Capital gains tax at a flat 19% on the gain — and unlike the annual imputed-income tax, this rate is the same for EU and non-EU sellers alike; UK sellers are not penalised here. Acquisition costs (including the ITP you paid) and documented improvements are deductible.
• The 3% retention — the buyer must withhold 3% of the price and pay it to the tax office within a month (Modelo 211) as an advance on your CGT; you then file Modelo 210 to settle the true figure and reclaim any excess. Refunds are legitimate but slow — commonly 4–12 months.

Related reading

• The step-by-step purchase process, arras contracts and completion — see the companion buying-in-Spain guide (pillar in production)
• Visas, the 90/180 rule and residency after buying — see Visa & Residency Routes for Buying in Spain

Not tax advice

This article is for general information only and does not constitute tax, legal or financial advice. Spanish tax rates are set at state, regional and municipal level and any of the three can change with limited notice — the Valencian Community alone has changed its purchase-tax rates twice since 2025. Always confirm current figures with a qualified Spanish tax adviser or abogado before committing to a purchase or filing a return. Facts in this piece current as of 7 July 2026; the non-EU buyer-tax status reflects the latest dated reporting available (late May 2026).

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