Increase in the ITP in the Valencian Community

Until recently, purchasing a second-hand home in the Valencian Community was subject to a standard 10% ITP. However, under the new fiscal reform, properties exceeding one million euros are now taxed at 11%, representing a 1% increase in tax costs for high-end resale homes.

This change can lead to a significant additional expense. For example, for a home priced at €1,200,000, the buyer's ITP payment would increase from €120,000 to €132,000—an extra €12,000 in taxes alone.

Impact on the Real Estate Market

The Valencian Community, particularly the Costa Blanca, has traditionally been a highly attractive destination for both national and international buyers, especially those interested in luxury properties. With this ITP increase, purchasing high-value second-hand homes becomes significantly more expensive, potentially slowing down transactions and shifting demand towards the new-build market.

New Builds: A More Attractive Alternative

Given this scenario, purchasing a new-build property is emerging as a more appealing option, as these properties are not subject to the ITP but instead to VAT, which remains fixed at 10%, regardless of the property's price. Additionally, new builds offer several key advantages, such as:

• Modern design and energy efficiency: Newly built homes adhere to contemporary construction standards, ensuring better thermal and acoustic insulation.

• Lower maintenance costs: As new properties, they require less maintenance and fewer repairs in the first years.

• Developer guarantees: Buying a new-build home includes structural and quality guarantees, protecting buyers from unexpected issues.

With the recent increase in ITP for homes exceeding one million euros, purchasing a second-hand property in the Valencian Community has become significantly more costly. This tax change, combined with the inherent advantages of new builds, reinforces the idea that investing in newly developed properties is a smarter and more profitable long-term decision.

If you're looking for a home on the Costa Blanca and want to avoid these rising tax costs, GestaliHome offers a wide selection of new-build properties with the best conditions on the market. Contact us today and find your dream home!