The completion statement for a resale villa in Andalucía carries a line that surprises buyers who have not been properly prepared for it. It is not a negotiating point, not a fee that varies by agent, and not something that can be structured away. Impuesto sobre Transmisiones Patrimoniales — ITP — is a regional transfer tax levied on the buyer at the moment of acquiring a second-hand property. In Andalucía, the rate is 7% of the declared transaction value, or the fiscal reference value if that figure is higher. On a €5M residence, the liability is €350,000. It falls due within 30 working days of signing at the notary.
Understanding it properly, before an offer is made, is one of the more practical things a buyer can do.
What ITP is — and what it is not
ITP belongs to a family of indirect taxes on legal and economic transactions. It is not income tax, not wealth tax, and not the annual property charge (IBI). It is a one-time levy on the transfer of ownership, paid by the buyer, and it is administered at the regional level, which means the rate differs across Spain's autonomous communities. Andalucía set its rate at 7% in 2021, a reduction from the previous tiered structure, and it has remained there.
The tax applies specifically to resale property — what Spanish law terms a second transmission. If the property has previously been owned by an individual and is changing hands in the secondary market, ITP is the operative tax. New-build transactions follow a different route entirely, one that carries IVA rather than ITP. The distinction matters, and the two regimes should not be conflated.
The reference-value floor introduced in 2022
Prior to 2022, the ITP calculation used the declared transaction price as its base, subject to challenge by the tax authority if the declared value was considered below market. In practice, that challenge mechanism was slow and inconsistently applied.
From January 2022, the Catastro introduced a new fiscal instrument: the valor de referencia, a cadastral reference value assigned to each property and updated annually using transaction data and location coefficients. The reference value now operates as a statutory floor for ITP purposes. If the declared sale price is lower than the reference value, the tax is calculated on the reference value. If the declared price is higher, the tax is calculated on the declared price.
This matters most in high-demand zones where reference values have been revised upwards. In practice, for prime Marbella property transacting well above any cadastral estimate, the reference value is rarely the operative figure — the declared price governs. But buyers should confirm this for their specific asset before completion. The reference value for a given property is publicly searchable through the Sede Electrónica del Catastro using the property's cadastral reference number.
The calculation on a typical transaction
The arithmetic is straightforward. Andalucía's 7% applies to whichever base is higher — declared price or reference value. On a €3M villa, the ITP liability is €210,000. On a €5M villa, €350,000. On a €10M estate in La Zagaleta, where transaction values can extend well beyond that figure, the tax alone may represent a meaningful proportion of the total acquisition cost.
Buyers occasionally ask whether the declared price can be legitimately reduced to lower the tax base. In theory, the parties to a transaction may declare any price they agree. In practice, declaring a price materially below market invites scrutiny, exposes both parties to potential penalties, and — since the 2022 reforms — is constrained by the reference-value floor in any case. The more useful question is whether the total tax and cost stack — ITP plus notary fees, land registry fees, and legal costs — is properly reflected in the acquisition budget from day one.
For a complete picture of all the taxes that attach to Spanish property ownership at each stage, the [Spanish property tax guide for 2026](/guides/spanish-property-tax-2026) covers the full lifecycle from acquisition through to disposal.
The mechanics: abogado, notary, and the 30-day window
In a standard resale transaction in Andalucía, the buyer's abogado handles the ITP filing. The process runs as follows. Once the escritura de compraventa — the title deed — is signed before the notary, the 30-working-day clock begins. The abogado prepares the self-assessment form (Modelo 600), calculates the tax due, and presents both the form and payment to the regional tax authority, the Agencia Tributaria de Andalucía. Payment is typically made by bank transfer or certified cheque. The stamped and settled Modelo 600 is then submitted to the land registry as a prerequisite for registering the new ownership.
Without the settled ITP form, the registry will not process the title change. The practical sequence is therefore: notary signing → ITP payment → land registry inscription. A buyer who has not arranged funds for the tax at completion will find the registration process stalled.
In our experience, buyers who are new to Spanish transactions sometimes conflate the ITP payment with the notary fees, treating them as a single closing cost. They are distinct. Notary and registry fees are modest relative to ITP — typically 0.1% to 0.5% of the transaction value in aggregate — and are paid directly to those offices rather than to the tax authority.
We are not your tax adviser. This sets out the contour; specifics need a cross-border specialist.
ITP versus IVA and AJD on new-build
The alternative tax regime — applicable to new-build property acquired directly from a developer — replaces ITP with two separate charges: IVA (impuesto sobre el valor añadido, the Spanish equivalent of VAT) and AJD (actos jurídicos documentados, a stamp duty on notarised documents).
In Andalucía, IVA on residential new-build is 10%. AJD is currently 1.2%. Combined, a new-build buyer pays 11.2% of the transaction value in tax, compared with 7% for a resale buyer. On a €3M apartment acquired off-plan, that differential is €126,000. On a €5M property, it is €210,000. The gap is material and frequently underweighted in the conversations that happen early in a buyer's search.
This does not mean resale is always preferable to new-build — land, design, specification, and location govern the choice. But understanding that ITP is structurally cheaper than the IVA and AJD stack is relevant when comparing assets across both segments. A buyer holding two otherwise equivalent properties in mind — one resale, one new-build — is holding two different tax positions.
There are edge cases. Certain new-build transactions where the seller is a private individual rather than a developer may attract ITP rather than IVA. The distinction turns on whether the seller is acting in a business capacity. An abogado will confirm the applicable regime for any specific asset before heads of terms are agreed.
Timing within the acquisition process
ITP is a completion-stage cost, not a reservation cost. The initial reservation deposit and any subsequent private purchase contract (contrato de arras or contrato de compraventa privado) do not trigger the tax. It crystallises only at the moment of notarial completion.
Buyers who are operating with financing from a Spanish or international bank should note that mortgage lenders typically require evidence that the ITP has been settled, or at minimum that funds are held in escrow for the purpose, before releasing funds or completing their security registration. The sequencing with the lender's own AJD charge — which applies to the mortgage deed itself — should be clarified with the abogado in advance.
For buyers acquiring at the upper end of the Marbella market, where transactions are frequently structured through corporate vehicles for reasons unrelated to tax, the ITP regime may not apply in the same form. The transfer of shares in a Spanish property-holding company (SL or SA) is subject to different rules. This is a separate and genuinely complex area, and the observation here is simply that the analysis should not be assumed to carry across from direct purchase to corporate acquisition without specialist advice.
What to carry forward
The number is 7%. It applies to the declared price or the cadastral reference value, whichever is higher. It is due within 30 working days of notarial completion. It is handled by the buyer's abogado via Modelo 600. And it is, on any property above €1.5M, a six-figure sum that belongs in the acquisition budget from the first conversation.
For buyers considering both resale and new-build options, the comparison with the 11.2% IVA and AJD route is one of the clearer financial arguments available. It does not determine the decision, but it should inform it.
The broader lesson of the 2022 reference-value reforms is that the Spanish tax authority is progressively narrowing the gap between declared values and market values. That is neither surprising nor unique to Spain. It does mean that the era of meaningful opacity in property transaction pricing — which shaped behaviour in parts of this market for decades — has largely passed. Buyers who approach the transaction cleanly, with accurate declarations and properly funded closing costs, encounter fewer complications on the other side.