On June 27, 2025, a major tax reform will come into effect in Catalonia, directly impacting anyone considering buying a home. Decree Law 5/2025 introduces a new progressive structure for the Property Transfer Tax (ITP), applicable to the purchase of second-hand properties.
The reform is designed to align taxation with the buyer's financial capacity, but it also represents a significant increase in the tax burden for higher-value transactions. In this context, it's especially important to understand how the tax landscape is evolving in Catalonia.
How does the ITP work now?
Until now, the ITP in Catalonia was applied at a flat rate of 10% for most transactions. Under the new legislation, however, the tax becomes progressive based on the property’s purchase price:
New ITP brackets in Catalonia (from June 2025):
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Up to €600,000: 10%
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€600,001 to €900,000: 11%
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€900,001 to €1,500,000: 12%
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Over €1,500,000: 13%
This tax is applied in brackets — not as a flat rate on the total amount. That means different portions of the price are taxed at different rates.
Additionally, certain transactions — such as the purchase of entire buildings or purchases made by large-scale property owners (defined as those holding more than 10 properties) — will be subject to a special rate of 20%.
What about new-build homes?
Unlike second-hand homes, new-build properties are not subject to the ITP. Instead, they are taxed under a separate regime:
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VAT (Value Added Tax): 10%
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Stamp Duty (AJD in Spanish): 1.5% in Catalonia
This taxation scheme remains unchanged under the reform, meaning new-builds continue to offer a stable fiscal framework. This predictability can be an advantage when planning the total cost of a property purchase.
Tax comparison: second-hand vs. new-build
Let’s compare how these taxes apply to a property valued at €800,000:
For a second-hand home:
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First €600,000 at 10% → €60,000
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Remaining €200,000 at 11% → €22,000
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Total ITP: €82,000
For a new-build home:
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VAT at 10% → €80,000
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AJD at 1.5% → €12,000
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Total taxes: €92,000
Although the overall tax burden may be slightly higher for new-builds in some cases, buyers benefit from a clear and predictable system, which helps reduce uncertainty when planning their investment.
Does this mean second-hand properties are no longer worth it?
Not at all. Many second-hand properties still offer excellent value in terms of location, resale potential, immediate availability, and renovation opportunities. However, it’s true that homes priced above €600,000 will now be affected by the new progressive tax system, something buyers should consider when budgeting.
At our agency, we provide personalized advice for every transaction to ensure buyers understand the full tax implications and can optimize their investment—whether they're buying new or second-hand.
Understanding the tax impact of a property purchase is just as important as finding the right home. If you're looking to buy in Catalonia, get in touch with us for tailored guidance.
