Property Transfer Tax (ITP) in Madrid: What Foreign Buyers Pay

For buyers coming from the United Kingdom, one of the first numbers to pin down when budgeting a purchase in Madrid is Property Transfer Tax, usually shortened to ITP. Unlike VAT on a new build, ITP is set by the regional government rather than the state, so the percentage you pay depends entirely on where the property sits, not on a single nationwide rule.

At Sókerim we coordinate with your lawyer, notary and bank throughout the purchase, and help confirm the NIE and bank account you need before completion, so that ITP and every other cost are accounted for well before you sign.

Madrid province is centred on the Spanish capital, an inland city with no coastline, drawing buyers focused on urban life, business connections or investment rather than beach lifestyle. Many buyers are professionals relocating for work, families using international schools, or investors targeting rental demand.

Madrid-Barajas is one of Spain's main international airports, offering extensive global connections. Property in the city centre is mostly apartments, while outer areas of the province offer houses and chalets, and demand stays fairly constant through the year rather than following a summer season.

This section sets out dated, sourced figures for Madrid (province) — residents, advertised prices, access and climate — so you can see the place as it is now. They help you judge, realistically, whether Madrid (province) suits what you have in mind, whether living there, holidaying or renting it out.

The province of Madrid as a whole, not merely its capital city, had 7,113,886 registered residents on 1 January 2025, according to the INE annual census. This figure covers every municipality within the province, from its largest towns to its smallest villages. Foreign nationals make up 1,181,319 residents of the province of Madrid, roughly 17 per 100 inhabitants. The figure is meaningful without being overwhelming, and it shifts noticeably depending on which town in the province you look at.

Only 10,938 British nationals appear in INE's register for the whole province of Madrid on 1 January 2025, a small number of compatriots. The padrón only counts people living there most of the year, so second-home owners in the province are not included. Here are the largest foreign communities registered in Madrid (province) on 1 January 2025, drawn from the nationality figures INE publishes for each municipality.

For nationalities the census groups together rather than listing them individually, such as Germans, Italians, Dutch, Belgians or Scandinavians, we turn to the detailed INE register for Madrid province. Unlike the table above, this count dates from 1 January 2022, the most recent detailed edition.

Across the province of Madrid, 32,271 homes currently listed carry a median price of €3,920/m² and a median ticket of €360,000 in our price bank. Both figures sit above the €3,135/m² median we see across the 130 towns we track nationwide. Among current adverts, the central half cluster between €2,820 and €6,030 per square metre; some properties are listed well below this band, others well above it.

Based on the median asking price of €360,000 in Madrid (province), transfer tax works out at 6 % — around €21,600 — with a further €4,300 typically going on notary, registry and gestoría fees. Together these add up to roughly €25,900, a sum that must be available in cash before the loan is even drawn down. These are asking prices taken from adverts active on 2026-11-01, not confirmed sale prices. What a buyer actually pays is negotiated, and depends on the condition, exact location and orientation of each home.

This table sets out population, foreign residents per 100 people and median price per square metre for the towns we track in Madrid (province), highlighting how much local markets can vary.

Madrid (province) had an estimated 13,431 holiday-let dwellings in 05/2026, according to INE's experimental platform-based statistic, amounting to 51,387 bed places and about 2 per 1,000 residents. The low density suggests a market geared mainly towards permanent residents. In 2024, 474,935 tax-declared long-term tenancies in Madrid (province) produced a median rent of €800 a month, according to the Ministry of Housing's reference system. It is historical data for long-term contracts, unrelated to holiday-let income, and rents can fall as well as rise. Monthly rents for flats, drawn from the same official figures, cluster between €650 and €1,050 for the middle half of tenancies.

Before booking, confirm that Aeropuerto Adolfo Suárez Madrid-Barajas (MAD), the one commercial airport serving Madrid (province), has a connection from your home airport at the time of year you intend to fly, as this changes seasonally. The climate figures below were recorded in or near Madrid, the provincial capital, and conditions elsewhere in the province, inland, at altitude or on other islands, can differ noticeably. The mean temperature in January is 6.3 °C (average daily minimum 2.7 °C) and in August 25.1 °C (average daily maximum 31.3 °C), a cold winter for this country. Buyers should budget for proper heating and insulation. Rainfall is moderate: about 421 mm a year, spread over roughly 59 days with measurable rain. All figures are AEMET's official 1981-2010 normals for the Madrid, Retiro station, about 2 km away; expect small local variations, especially further inland or at higher elevation.

In the twelve months to 07/2026, 77,763 homes changed hands in the province of Madrid, INE figures show. Such activity tends to bring more reference prices and a larger selection for anyone searching. These are province-wide figures for Madrid, and they can differ substantially depending on the town and the property in question. Tell us about your plans and we will go through the numbers for your case.

The transfer tax on a resale home is set by each Spanish region. In Madrid the general rate is 6 %, and on top of it come notary, land registry and gestoría (roughly one more percent). On a new build you pay 10 % VAT plus stamp duty instead of the transfer tax. This money is not lent by the bank.

When you buy a resale home in Madrid, you do not pay VAT on the purchase price. Instead you pay Property Transfer Tax, known in Spain as ITP (Impuesto de Transmisiones Patrimoniales). This is a regional tax, set by the autonomous community where the property sits, and it is charged on the higher of the agreed price or the property's reference value used by the tax office. The buyer pays it, not the seller, and it falls due shortly after completion before the notary.

For British buyers used to Stamp Duty Land Tax in England or Land and Buildings Transaction Tax in Scotland, the mechanism will feel familiar: a single tax, paid once, calculated as a percentage of the transaction value, with no further transfer tax due afterwards. What differs is that Spain lets each region set its own rate and its own reductions, so the figure for Madrid is not the same as the figure for a neighbouring province, and it can change from one tax year to the next.

ITP only applies to resale homes. If you buy a new build directly from a developer in Madrid, the purchase is instead subject to VAT at 10 % plus a stamp duty (Actos Jurídicos Documentados), which is also set regionally and charged separately from VAT. Most of the properties British buyers consider through an agency, including flats being resold by a previous owner or homes bought for renovation, fall under ITP rather than VAT, so it is worth confirming which category your target property sits in before you calculate your budget.

Because the rate is regional and subject to change, we do not quote a fixed percentage here; your lawyer or gestoría in Madrid will confirm the exact figure that applies on the date you sign, together with any reduction that might apply if you are buying a primary residence, if you are under a certain age, or if the home qualifies as officially protected housing.

ITP is usually the largest single cost on top of the price, but it is not the only one. Notary fees and Land Registry fees are set by official scale and depend on the property's value and the length of the deed. A gestoría typically handles the tax filing and registration paperwork for a fixed fee, and while a lawyer is optional under Spanish law, we consider one usual and sensible for buyers coming from the United Kingdom who are not familiar with Spanish conveyancing.

None of these costs are refundable if a purchase falls through after the deposit contract is signed, so it is worth having funds confirmed, and your NIE already in hand, before you commit to a specific property in Madrid.

Beyond the tax itself, lenders and the Spanish tax office will want to see that your funds are clearly accounted for. For buyers coming from the United Kingdom we typically see a recent P60 and payslips, the last filed Self Assessment tax return, bank statements from the last three to six months, evidence of any existing loans or mortgage commitments, and a valid passport. Having these ready before you make an offer in Madrid avoids delays once the deposit contract is signed and the clock starts running towards completion.

Since the United Kingdom uses the pound rather than the euro, build in some margin for exchange-rate movement between the day you reserve a property and the day you transfer the balance; currency conversion costs are real money and should be part of your budget alongside ITP.

ITP is a one-off cost paid once at purchase, but owning a home in Madrid brings recurring obligations. Non-resident owners file an annual Modelo 210 return, municipal property tax (IBI) and community fees are due every year, and any rental income is taxed in Spain regardless of where you live. Spain and the United Kingdom have a double taxation agreement, so a local tax adviser should confirm exactly how rental income or any future gain must also be declared to HMRC.

If you later sell as a non-resident, remember the buyer withholds 3 % of the price on account of your Spanish tax, and a separate municipal capital-gains tax (plusvalía) applies on the increase in the land value. None of this replaces proper advice from a tax adviser familiar with both systems, but it gives you the full shape of what ITP is only the first step of.

Spain is a relatively short flight away from most UK airports, making regular visits to a Spanish property straightforward for owners based in Britain. Many British buyers are drawn to Spain for its climate, coastal lifestyle and established expatriate communities. One practical point to bear in mind is that Spanish inheritance law differs from UK rules, so it is worth taking specific advice on how it may affect the property and one's estate. Currency movements between sterling and the euro can also affect the overall cost of purchase and ongoing expenses.

Spain and the United Kingdom have a double taxation agreement in place, and a local tax adviser should confirm how rental income or gains from Spanish property must be declared and reported to HMRC.

As the United Kingdom is no longer an EU member state, British citizens may stay in Spain for up to 90 days in any 180-day period without a visa, and must apply for a visa or residence permit for longer stays.

Since the United Kingdom uses the pound sterling (GBP) rather than the euro, buyers should factor in exchange-rate movements and currency conversion costs when paying for a property or transferring funds to Spain.