Monday, 5 October 2026
Andalusia is preparing to reduce the general property transfer tax applied to existing real estate, potentially lowering acquisition costs as residential prices across the Costa del Sol remain close to record levels.
The regional government plans to reduce the general ITP rate from 7% to 6.75% in 2027, with the measure expected to be incorporated into the region’s 2027 budget. Further reductions of 0.25 percentage points are intended to bring the rate to 6% over the following years. As the measures have not all been enacted, the later reductions remain policy plans rather than confirmed future tax rates.
For buyers, the first reduction would have a relatively limited financial impact compared with typical Costa del Sol property values. On a EUR 500,000 transaction, a reduction from 7% to 6.75% would save EUR 1,250, while a future 6% rate would reduce the tax by EUR 5,000 compared with today’s level. At EUR 1 million, the respective savings would be EUR 2,500 and EUR 10,000.
“This is an important signal for the market, particularly because we are not talking about a one-off relief measure, but about an announced policy of progressively reducing transaction costs,” said Tatiana Pękala, founder of Dream Property Marbella. She noted that the overall cost of completing an acquisition can be particularly relevant for international buyers comparing opportunities across different Spanish regions.
The proposed changes coincide with continued increases in Costa del Sol residential values. Idealista’s September data put average asking prices in Marbella at approximately EUR 5,967 per sqm, 3.2% higher than a year earlier, while Málaga province reached approximately EUR 4,317 per sqm, an annual increase of 6.6%. The figures represent advertised prices rather than values recorded in completed transactions.
The relationship between taxation and property prices means that postponing a purchase solely to obtain a lower tax rate does not necessarily result in a lower overall acquisition cost. A 1% increase in the price of a EUR 500,000 property represents EUR 5,000, compared with the EUR 1,250 saving generated by the first proposed tax reduction. “It may turn out that the saving on ITP is smaller than the difference in the price of a particular apartment or house,” Pękala said.
Transfer taxation varies considerably across Spain because rates are determined by individual autonomous communities. “In Spain there is no single ITP rate,” said Klaudia Rakoczy of Dream Property Marbella. She pointed to differences between Madrid, the Canary Islands and Catalonia, adding that a 6% general rate would place Andalusia among the regions with lower headline transaction taxes. The effect becomes increasingly significant on higher-value purchases, where each percentage point represents EUR 10,000 for every EUR 1 million of taxable value.
The proposed changes concern taxable purchases of existing property rather than the standard tax treatment of newly built homes bought directly from developers, which generally involves VAT and AJD. For Costa del Sol buyers, the planned ITP reductions would gradually lower one component of acquisition costs, but future property prices, the characteristics of the individual asset and the buyer’s applicable tax position will remain important in determining the total cost of a transaction.
