Real Estate Taxes in 2025: What You Need to Know

The real estate sector is constantly evolving, and real estate taxes associated with the purchase, sale, and ownership of property are no exception. Staying informed about current tax regulations is essential, as they can significantly impact the financial decisions of both individuals and businesses. This blog post from FORCADELL covers the key taxes and updates to keep in mind this year.

Transfer Tax (ITP)

The Transfer Tax applies to the transfer of property rights (ownership, usufruct, bare ownership, etc.) in second or subsequent transactions between individuals or entities not acting as business professionals. It is applicable in cases such as the purchase of a second-hand property, the rental of a property, or the sale of used vehicles between individuals.

It is calculated as a percentage of the reference value (obtainable on the cadastral website) of the property, regardless of the transaction value in the deed. For 2025, some regional governments have announced tax rate reductions for specific groups, such as young people.

Value Added Tax (IVA)

When purchasing a new property, the buyer must pay VAT (IVA) at a rate of 10%, as well as the Stamp Duty (Impuesto de Actos Jurídicos Documentados) at 1.5%. The VAT is calculated by multiplying the property price by the applicable rate. The buyer pays the VAT directly to the seller, who then remits it to the tax authorities.

The current rates are: 10% on the sale of residential properties, 4% for officially subsidized housing under special regimes or public promotion, and 21% for other types of properties.

Property Tax (IBI)

Property Tax (Impuesto sobre Bienes Inmuebles) applies to all property owners.

In 2025, some local administrations have revised cadastral values. For instance, residents in Spain’s seven largest cities and the capitals of Catalonia will notice little change in the main tax managed by municipalities. Among the six major cities, only Madrid has reduced its tax rate again, from 0.442% to 0.428% of the cadastral value. It is also advisable to check for available discounts, such as those for properties with high energy certification.

Municipal Capital Gains Tax

This tax applies to the increase in the value of urban land at the time of transfer, whether through sale (inter vivos) or inheritance (mortis causa). Recent legal adjustments allow taxpayers to choose between the objective or real calculation method, depending on which is more favorable.

Notably, depending on the situation, transfers through inheritance or donation may have tax advantages.

Personal Income Tax (IRPF)

When selling a property, the gains obtained are included in the IRPF taxable base. Tax benefits may apply if the profit is reinvested in purchasing a new primary residence or if the seller is over 65 years old.

In 2025, new tax brackets have been introduced for capital gains exceeding certain thresholds.

Taxes for Investors and Companies

Businesses and individuals investing in real estate should also consider:

Staying up-to-date with real estate taxes is crucial for optimizing your financial decisions. It is always advisable to consult an expert, such as the FORCADELL team, to guide you in managing your properties and maximizing the return on your assets.