ITP tax in Andalusia 2027 – announced reduction. Is it worth waiting to buy property?
The ITP tax is one of the most important costs when purchasing a property from the secondary market in Andalusia. In September 2026, the Junta de Andalucía announced another change in rates. From 2027, the basic ITP rate is to be reduced from 7% to 6.75%, while at the same time price limits for selected preferential rates are to be raised.
For those planning to buy property on the Costa del Sol, a natural question arises: is it worth waiting until 2027 to pay a lower ITP tax?
The answer is not as obvious as it might seem.
What will you find in the article?
ITP tax in Andalusia: What will change in 2027?
Currently, the general rate of Impuesto sobre Transmisiones Patrimoniales (ITP) in Andalusia is 7%. This rate was reduced in April 2021 and applies to transactions subject to the property transfer tax, primarily purchases of second-hand properties.
The Junta de Andalucía has announced that the 2027 budget will include a reduction of the general rate:
7% → 6.75%
This means a reduction of the tax by 0.25 percentage points.
At the same time, there are plans to increase the property value limit for which preferential rates related to the purchase of one’s own home can be applied: from 150,000 to 200,000 euros. For certain groups, the limit allowing application of the 3.5% rate is also to be raised. These limits apply solely to tax residents of Spain and do not apply when buying a holiday home.
The change mainly concerns properties from the secondary market. New properties bought from developers are generally subject to a different tax system, primarily VAT (IVA), not ITP. Here, nothing changes—the rate remains 10% of the transaction value.
Important: the announced changes are to enter the Andalusian budget for 2027.
How much can you save thanks to a lower ITP?
At first glance, a reduction from 7% to 6.75% may seem attractive. However, it is worth converting this into specific amounts.
Assuming a taxable base of 500,000 euros:
- ITP at 7% = 35,000 euros
- ITP at 6.75% = 33,750 euros
- difference = 1,250 euros
For a property priced at 1 million euros, the difference would be 2,500 euros.
However, it should be remembered that the actual taxable base does not always correspond to the price entered in the contract. In Andalusia, among other things, the valor de referencia (reference value) established by the cadastre is important. If the declared price or value is higher than the reference value, the taxable base may be the higher of the two values. Therefore, for a specific transaction, the ITP tax should always be calculated based on the current situation of the given property.
Property prices rise faster than the ITP tax falls
Here arises the most important issue for those considering a purchase on the Costa del Sol. According to the latest INE data, in Q2 2026, property prices in Spain were on average 12.2% higher than a year earlier. In Andalusia, the annual increase was 11.9%. However, prices of second-hand properties across Spain increased by 12.9%.
The announced reduction of the basic ITP rate is 0.25 percentage points.
This of course does not mean that property prices in Andalusia will increase by exactly 11.9% next year, we do not have a crystal ball. The point is to show the difference between the current price dynamics and the scale of the planned tax reduction.
For example, if a property currently costing 500,000 euros rose in price by 5% within a year, its price would be 525,000 euros. The saving from the lower ITP rate would be about 1,312 euros, while the property itself would cost 25,000 euros more.
Therefore, waiting for the ITP reduction does not have to be a beneficial strategy.
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Is it worth waiting to buy property until 2027?
There is no single answer for every buyer. If someone has already found a property that meets their needs in terms of location, quality, price, and investment potential, the decision to postpone the purchase only to benefit from the ITP reduction should also take into account the risk of the property’s price increasing.
The tax reduction is concrete and easy to calculate. The property price, however, may change much more than the amount of tax savings.
It is also worth remembering that in the real estate market, not only the purchase price matters. Location, standard, availability of a specific project, financing costs, rental potential, and the possibility of later resale are significant.
Therefore, the decision to purchase should not be based solely on whether the ITP tax in Andalusia will fall from 7% to 6.75%.
We discuss all the costs related to buying property on the Costa del Sol in the 13th episode of our podcast Dream Property Talks – Costa Unfiltered.
What else will change in property tax in Andalusia?
The planned change also includes limits for preferential rates.
Currently, when buying a property intended as vivienda habitual, that is one’s own home, in certain situations it is possible to apply a 6% rate for property values up to 150,000 euros. For certain groups, including people younger than 35, a 3.5% rate applies under appropriate conditions.
According to announcements, in 2027 the limit for the 6% rate is to be raised to 200,000 euros, and the limit for the 3.5% rate also to 200,000 euros. For people with disabilities and large families, a limit of 300,000 euros will apply.
These preferences are directed to people buying property as their main residence, not a typical investment property or a second home on the Costa del Sol.
ITP tax and purchasing property on the Costa del Sol
For a foreign investor, the most important thing is primarily to determine what type of property they are buying and what tax will apply to the specific transaction.
When buying an apartment or house from the secondary market, we basically analyze the ITP. When buying a new property from a developer, the tax situation is different and primarily involves VAT and AJD (Stamp Duty).
Therefore, before making a decision, it is worth calculating the entire transaction cost, not just the property price.
Summary
The announced reduction in the ITP tax in Andalusia for 2027 is a beneficial change for buyers, but its scale is relatively small. Given the current dynamics of property prices, the mere prospect of a lower ITP may not be a sufficient reason to postpone a purchase. If there is a property well matched to the buyer’s needs, it is worth analyzing the entire transaction and its potential, not just the moment when the tax rate changes by 0.25 percentage points.
Sources: INE, Junta de Andalucía
