Lower Transfer Tax, Higher Wealth Allowance & Inheritance Relief in the Valencian Community
Buying or owning property in Spain is not just about location and price — tax timing matters.
From 2026, several important tax changes come into force in the Valencian Community, directly affecting buyers, investors and property owners in areas such as Costa Blanca, Torrevieja, Alicante and Benidorm.
These reforms impact three key areas:
- Property Transfer Tax (ITP)
- Wealth Tax (Impuesto sobre el Patrimonio)
- Inheritance and Gift Tax (Impuesto sobre Sucesiones y Donaciones)
Below is a clear, factual breakdown of what is changing, when it applies, and who benefits.
1. Property Transfer Tax (ITP): 10% → 9%
When purchasing a resale property in the Valencian Community, buyers currently pay 10% Property Transfer Tax (ITP).
What changes in 2026?
From 1 June 2026, a reduced 9% ITP rate will apply to properties with a purchase price of up to €1,000,000.
Important details:
- The reduction applies only to resale properties (not new builds with VAT).
- Properties above €1,000,000 are subject to higher progressive rates.
- The date of completion (not reservation) determines which tax rate applies.
Example:
- €300,000 resale property
- Before June 2026 → €30,000 ITP
- From June 2026 → €27,000 ITP
Saving: €3,000
For many buyers in Costa Blanca, this represents a real and immediate cost reduction.
2. Wealth Tax: Allowance Increased to €1,000,000
Spain levies a Wealth Tax on individuals whose net assets exceed a certain threshold.
This tax is regional, meaning allowances and rates vary by autonomous community.
What changes?
In the Valencian Community, the tax-free allowance increases from €500,000 to €1,000,000.
What this means in practice:
- Fewer residents and investors fall into the taxable bracket.
- Property owners with moderate portfolios may no longer be liable.
- The tax applies differently to:
- Residents (worldwide assets)
- Non-residents (Spanish assets only)
This change significantly improves the tax position for mid-level property investors and long-term residents.
3. Inheritance and Gift Tax: Expanded Family Relief
Inheritance and gift tax has long been a concern for foreign property owners in Spain.
The Valencian Community already offers very generous relief for close family members.
Current situation:
- Children, parents and spouses benefit from a 99% tax reduction.
What changes?
From 1 June 2026, siblings become eligible for new tax reductions, with further improvements planned.
Timeline:
- From June 2026: approx. 25% reduction for siblings
- From June 2027: approx. 50% reduction for siblings and certain extended family members
Key clarification:
This does not mean siblings immediately receive the same 99% relief as direct descendants, but it is a major step toward fairer family succession planning.
4. Regional Scope: Why This Matters for Costa Blanca
These reforms apply specifically to the Valencian Community, including:
- Torrevieja
- Orihuela Costa
- Alicante
- Benidorm
- Jávea, Calpe, Altea and surrounding areas
They do not automatically apply to other Spanish regions such as Andalusia or Catalonia.
For anyone focused on Costa Blanca real estate, this makes the region even more attractive compared to other parts of Spain.
5. Should Buyers Wait Until 2026?
This depends on individual circumstances.
Waiting may make sense if:
- You are buying a resale property under €1M
- Completion can realistically be scheduled after June 2026
- Tax optimisation is a priority
Buying earlier may still be better if:
- Prices are rising faster than the tax saving
- You find a property that perfectly matches your needs
- Rental income or lifestyle use outweighs the tax difference
In short: tax is important, but timing the market perfectly rarely works.
6. Summary: What Changed and Why It Matters
| Area | Before | From 2026 |
|---|---|---|
| ITP (Resale) | 10% | 9% (≤ €1M) |
| Wealth Tax Allowance | €500,000 | €1,000,000 |
| Inheritance (Direct Family) | 99% relief | Unchanged |
| Inheritance (Siblings) | Limited relief | 25% → 50% |
These reforms make property ownership in Costa Blanca more competitive, predictable and investor-friendly.
What This Means for Property Buyers in Costa Blanca
Spain remains one of Europe’s most attractive property markets, and the Valencian Community is clearly positioning itself as a tax-efficient region for buyers and families.
If you are planning to buy, invest or pass on property in Costa Blanca, understanding these 2026 changes is no longer optional — it’s essential.
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