Valencia Cuts Property Transfer Tax: Major Tax Reform Announced

The President of the Valencian Generalitat, Carlos Mazón, has announced a reduction in the property transfer tax (ITP) from 10% to 9%, according to Spanish Property Insight. The measure will apply to all property buyers regardless of age or social status. It remains unclear whether foreign buyers will be eligible for the new rate.

Valencia's Comprehensive Housing Initiatives

Existing tax benefits introduced last year will remain in place. Young buyers under 35 and vulnerable groups (including single parents and individuals with disabilities) will continue to benefit from reduced rates of 6% and 8%, respectively. According to Mazón, these measures have already helped 21,000 young people purchase homes, saving a total of €27.8 million — or between €1,000 and €2,000 per buyer.

The government also plans to reduce the stamp duty (AJD), which currently stands at 1.5%. The tax reform is accompanied by large-scale construction initiatives. In 2024, more than 1,200 units of social housing were built under the Plan Vive program, including 191 properties in Alicante. For 2025, over 2,000 additional units are planned, with approximately 40% reserved for buyers under 35.

In Alicante’s Rabasa district, 34 townhouses are under construction, including two specially adapted for people with disabilities. The €2.8 million project is scheduled for completion in 24 months. The government is also refurbishing abandoned housing stock. In the Miguel Hernández district of Alicante, renovation of 20 apartments has been completed, with an additional 16 residential units and 6 commercial spaces planned for the second phase.

In addition, the Valencia Finance Institute (IVF) continues to offer a guarantee program covering up to 95% of a property's value. Over 1,000 people have already benefited from this support. Mazón emphasized that this reform is one of the three key pillars of the region’s housing policy, stating that Valencia will no longer be the Spanish region with the highest property taxes. The Olive Press notes that these reforms were introduced amid growing criticism of rising home prices and protests in over 40 cities across Spain.

Tax Reforms in Other Spanish Regions

Other regions are also adjusting their property tax policies. In Andalusia, authorities have expanded benefits for families with children, introducing a reduced ITP rate of 3.5% for properties priced up to €180,000. Taxes on rural properties and housing in depopulated municipalities have also been lowered. These measures aim to stimulate home purchases outside large urban centers and support young families.

In contrast, Catalonia has raised its ITP rate for properties valued over €1 million. The stamp duty (AJD) was also increased from 1.5% to 2%. Some tax exemptions previously available for mortgage-backed purchases have been eliminated. These measures are part of Catalonia's fiscal consolidation strategy, targeting premium property transactions to boost tax revenue.

Conclusion

In 2025, Spain has accelerated property tax and housing market reforms. While regions like Andalusia and Valencia are easing regulations, Catalonia is tightening them. Meanwhile, rental markets are also under scrutiny: several regions have begun imposing restrictions on short-term rentals. In Barcelona, authorities plan to completely stop issuing licenses for tourist accommodations by 2028, favoring hotel development instead.

Overall, Spain’s national and regional housing policies are shifting toward tighter control over real estate markets and curbing speculative activity. These changes also affect foreign buyers, making Spain’s property market less attractive for some investors.