Taxes on Buying Property in Madrid in 2026: Complete Guide

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What Taxes Are Paid When Buying a Property in Madrid? <\/h2>

Purchasing a property in Madrid in 2026 involves paying various taxes, depending on whether it is a new or second-hand property. The main taxes to consider are:<\/p>

• Value Added Tax (VAT):<\/b> Applied to new properties.<\/li>
• Property Transfer Tax (ITP):<\/b> Applied to second-hand properties.<\/li>
• Stamp Duty (AJD):<\/b> Paid on new properties and in some cases on second-hand properties.<\/li> <\/ul>

  Below, we explain each one in detail.<\/p>

  1. VAT on the Purchase of New Property<\/h3>

  If you buy a new property<\/b> directly from a developer, the tax to pay is VAT<\/b>. In 2026, the applicable VAT rates in Madrid are:<\/p>

  • 10%<\/b> for new residential properties.<\/li>
  • 4%<\/b> for officially protected housing (VPO) under special regime or public promotion.<\/li> <\/ul>

    Example: If you buy a new property for €300,000, the VAT will be:<\/p>

    €300,000 × 10% = €30,000<\/p>

    2. Property Transfer Tax (ITP) on Second-Hand Properties<\/h3>

    If you buy a second-hand property in Madrid, you must pay ITP<\/b>. Unlike other autonomous communities, Madrid maintains a single general rate of 6%<\/b> (one of the lowest in Spain), with several reductions depending on the buyer's profile:<\/p>

    • 6%<\/b> general rate, on the higher value between the deed price and the cadastral reference value.<\/li>
    • 5.4%<\/b> effective rate (10% discount on the fee) if the property is a primary residence and its value does not exceed €250,000.<\/li>
    • 4%<\/b> for large families purchasing their primary residence.<\/li>
    • 4%<\/b> if the buyer is under 35 years old and buys their first primary residence for less than €250,000.<\/li>
    • 100% fee discount<\/b> for those under 35 years old buying their primary residence (up to €250,000) in municipalities of the Community of Madrid with fewer than 2,500 inhabitants.<\/li> <\/ul>

      Example: If you buy a second-hand property for €300,000 (without reduction rights, as it exceeds €250,000), the ITP will be:<\/p>

      €300,000 × 6% = €18,000<\/p>

      3. Stamp Duty (AJD)<\/h3>

      The AJD<\/b> applies to the purchase of new properties and mortgages. In Madrid, the general rate is 0.75%<\/b> on the property price or the mortgage liability amount, with reduced rates of 0.4% and 0.5% for mortgages or lower-value properties.<\/p>

      Example: If you buy a new property for €300,000, the AJD will be:<\/p>

      €300,000 × 0.75% = €2,250<\/p>

      Other Costs Associated with Buying a Property in Madrid<\/h2>

      Besides taxes, when buying a property in Madrid, you should consider the following expenses:<\/p>

      • Notary:<\/b> Between €600 and €1,200.<\/li>
      • Property Registry:<\/b> Between €400 and €1,000.<\/li>
      • Agency:<\/b> Between €300 and €600.<\/li> <\/ul>

        How to Reduce Taxes When Buying a Property?<\/h2>

        There are some strategies to reduce the tax burden when buying a property:<\/p>

        • If you are under 35 years old and buy your primary residence for less than €250,000, you can access a reduced ITP of 4%<\/b> (or even a 100% discount in small municipalities).<\/li>
        • If you are part of a large family, you can also benefit from the reduced rate of 4%.<\/li>
        • In some cases, the purchase of officially protected housing has additional tax benefits.<\/li>
        • Consult with a tax advisor to confirm which discounts apply to you before signing.<\/li> <\/ul>

          Conclusion<\/h2>

          The taxes on buying a property in Madrid<\/b> vary depending on the type of property and the buyer's situation. Before purchasing, it is important to calculate the total cost and check if you are entitled to any of the discounts available in the Community of Madrid.<\/p>

          For more information, consult the regulations at the Agencia Tributaria<\/a> and the Community of Madrid<\/a>.<\/p>