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Taxes when buying a home in Madrid: ITP, VAT and AJD

Purchase taxes · Comunidad de Madrid

Resale property: general ITP rate of 6%. New build: VAT and Madrid AJD.

In the Comunidad de Madrid, a usada property is generally taxed at 6% under Transfer Tax (TPO/ITP). A first sale of a new home subject to VAT generally incurs 10% IVA and, where the variable AJD charge applies, a home purchase by an individual is subject to Madrid rates of 0,2%, 0,4%, 0,5% or 0,75% depending on the property's protected status and value.

View rates and benefits National tax framework
Last reviewed9 August 2026
JurisdictionComunidad de Madrid
StatusVerified official sources

Tax summary

Which tax applies when buying a home in Madrid

This guide applies to properties located in the Comunidad de Madrid, not only in the municipality of Madrid. The tax classification begins by distinguishing between new-build homes subject to IVA and sada first transfer.

ITP
6%

Resale · standard

General Madrid rate for the taxable transfer of real estate where the transaction is subject to TPO.

FN
4%

Large family

Reduced rate for a property that will become the main residence of a large family, subject to all legal requirements.tui

IVA
10%

New build · standard

The currently published standard national VAT rate for the sale of a home where the transfer constitutes a supply subject to VAT.

AJD
0,2–0,75%

Home purchase by an individual

Madrid rates based on protected-housing status and value. 0,75% applies to homes valued above €180.000.

Madrid does not have a single figure that applies to every purchase: 6% is the general TPO rate for real estate, but specific tax benefits exist, and new builds follow the VAT + AJD route. First identify the transfer, buyer, intended use of the home and tax base; then apply the benefit that actually applies.

Second-hand property · standard ITP

The general Madrid rate for real estate is 6%

Article 28 of the consolidated text on taxes transferred to the Comunidad de Madrid establishes a 6% as a general rule for transfers of real estate and for the creation or assignment of certain rights in rem over them.

  • In a purchase subject to TPO, the liable party is generally the purchaser.
  • The 6% is the starting point for a standard residential orsada purchase.
  • Before calculating, the taxable base must be determined correctly.
  • Benefits for a primary residence, large families or certain companies have their own requirements.

Example · property orsada €300.000

Assumed tax base€300.000
Standard TPO rate6%
ITP in the example: €18.000 Simplified example without tax benefits, assuming that €300.000 is in fact the taxable base.

Primary residence · tax relief

An individual may reduce the TPO liability by 10% if the property does not exceed €250.000

Individuals acquiring a property that will constituite their primary residence may apply a tax relief of 10% of the tax liability for TPO, exclusively where the value of the acquired property is equal to or less than €250.000. This limit includes appurtenances and parking spaces transferred jointly.

10%

It is a tax liability relief

It is not an “ITP of 5,4%” set by law. The applicable tax liability is calculated first, and then the 10% relief is applied when the conditions are met.

250

Value limit

The benefit applies only if the value of the acquired property is equal to or less than €250.000,, including appurtenances and garages transferred jointly.

HAB

Primary residence use

The property must meet the legal definition and requirements of a primary residence, including the required occupancy and period of residence, except where statutory exceptions apply.

Example · primary residence orsada €200.000

Standard liability: €200.000 × 6%€12.000
Tax relief: 10% of €12.000− €1.200
Resulting liability in the example: €10.800 The calculation assumes that all conditions are met and that €200.000 is the applicable tax base.
Incompatible with the 4% rate for large families.

Madrid law prevents this 10% TPO relief from being combined with the reduced 4% rate provided for primary residence purchases by large families.

Large family

ITP may be reduced to 4% when the new home will be the family’s main residence

Madrid applies a reduced rate of 4% to the transfer of a property that is to constitute tui the habitual residence of a large family, provided that the requirements of Article 29 are met simultaneously.

  • The taxpayer must hold large-family status and be able to provide proof of it.
  • The property must constituir the family's main residence.
  • If a previous main residence was owned by any of the holders, it must be sold within the two years before or after the new acquisition.
  • The prior sale is not required when an adjoining property is acquired to combine it with the main residence and create a single, larger home.
  • The property must be occupied within the statutory period and retained as the main residence for the required period, except in the cases provided for.

Example · taxable base €300.000

Standard ITP 6%€18.000
Large-family ITP 4%€12.000
Example difference: €6.000 The 4% is only correct when all the legal requirements for the benefit are proven.

Under 35 · small municipalities

The main-residence tax relief may reach 100% of TPO in a very specific territorial scenario

The tax liability relief increases from 10% to 100% when the main residence is acquired by a taxpayer under 35 years of age and is located in a municipality with fewer than 2.500 inhabitants as at 1 January of the year before the tax accrual date, according to data published by the INE. The property value must be equal to or less than €250.000.

<35

Age

The purchaser must be under 35 years of age under the terms required by the regulations.

Population

The reference is the official INE figure as at 1 January of the year before the tax accrual date.

≤250

Maximum value

The acquired property must have a value equal to or less than €250.000,, including jointly transferred appurtenances and garages.

HAB

Main residence

It must be occupied and retained as the main residence in accordance with the legal conditions.

It is not advisable to publish a fixed list of municipalities as though it were permanent.

The regulation refers to the INE's official population on a specific date. Territorial eligibility must be verified for the year of purchase and the exact municipality.

Professional purchase for resale

There is a 2% for certain real-estate companies, but it is not a general rate for companies

Article 30 provides for a reduced rate of 2% for certain purchases of homes by companies subject to real-estate sector accounting rules, where the purpose is resale and strict conditions are met.

ACT

Business activity and inventory

The property must be recorded as current assets for sale, and the main business activity must fall within construction, development or own-account real-estate buying and selling.

PUB

Public deed

The deed must state that the acquisition is made for the purpose of selling the property.

3Y

Resale within three years

The entire property and its appurtenances must be sold within the statutory period, and the subsequent sale must meet the taxability requirements set out in the regulation.

An SL that purchases a property does not automatically qualify for the 2%.

The benefit depends on the business activity, accounting treatment, stated purpose, subsequent transfer and time limit. There are also express exclusions.

New build · VAT

The ordinary first sale of a new home is generally subject to 10% VAT

The Spanish Tax Agency currently publishes a 10% VAT rate as a general rule for the sale of homes subject to this tax. Certain special-regime or publicly promoted protected housing may be taxed at 4% when the requirements are met.

  • A first sale by the developer usually follows the VAT + AJD route.
  • A usada property usually follows the TPO route, but classification must be based on the actual transaction.
  • The buyer's nationality does not by itself create a different general VAT rate for a residential purchase.
  • Advance payments in a VAT-subject transaction may trigger VAT before the final deed is signed.

Also see the specific guide on VAT and AJD when buying a new-build property in España.

Example · new home €300.000

Net price€300.000
Standard VAT 10%€30.000
AJD Madrid 0,75%€2.250*
Example total: €32.250 *Assumes an individual buyer, an ordinary home valued above €180.000,, an AJD base of €300.000, and no discounts or exemptions.

AJD on home purchases

Madrid uses AJD rates of 0,2%, 0,4%, 0,5% and 0,75% for home purchases by individuals

Where the first copy of the deed documents a home purchase subject to the graduated notarial documents charge and the purchaser is an individual, Madrid regulations differentiate the rate according to public protection status and value.

Home purchase scenario AJD Madrid Main condition Notes
Qualified public-protection housing 0,2% VPP regulated by Law 6/1997, with floor area within the legal limit and not entitled to the exemption. Specific rule for individual purchasers; the floor-area limit may be increased for large families in accordance with the regulations.
Housing up to €120.000 0,4% Property value equal to or below €120.000. Attached units and garages transferred together are included when determining the relevant value.
More than €120.000 and up to €180.000 0,5% Value above €120.000 and equal to or below €180.000. For individual purchasers.
More than €180.000 0,75% Property value above €180.000. This is the usual scenario for many new-build purchases above that value.
Express waiver of VAT exemption 1,5% A deed documenting a transaction with an express waiver of certain VAT exemptions. This is not the standard rate for a typical first residential transfer.
The thresholds apply under the legal rules governing AJD in Madrid.

A percentage should not be selected based solely on the advertised price. The transaction, the buyer's status, the attached units transferred and the taxable base must be reviewed before filing the tax return.

AJD rebates

The AJD charge may be reduced for a primary residence, large families and the rural case for those under 35 years of age

10%

Main residence

Individual + primary residence + value equal to or below €250.000: a rebate of 10% of the graduated AJD charge arising from the purchase deed.

100%

Under 35 + small municipality

The rebate increases to 100% if, in addition, the purchaser is under 35 years of age and the home is in a municipality with fewer than 2.500 inhabitants, according to the annual legal criteria.

95%

Large family

The purchase of a primary residence by the holder of a large-family certificate may qualify for a rebate of 95% of the graduated AJD charge when the requirements of Article 38 ter are met.

The primary-residence and large-family rebates are mutually exclusive.

The applicable regime must be applied according to the facts of the transaction; the general benefit under Article 38 bis and the large-family tax relief under Article 38 ter cannot be combined.

Purchase vs. mortgage

AJD on the sale and purchase should not be confused with AJD on the mortgage deed

The acquisition deed and the mortgage loan deed are different legal acts. Comunidad de Madrid notes that, for mortgage loan deeds formalised from 10 November 2018, the taxpayer is the lender.

  • Do not include AJD on the loan in the buyer's budget as though it were another personal acquisition charge.
  • Keep the purchase and financing separate for tax purposes.
  • The buyer should budget for the mortgage costs they are legally responsible for, such as the valuation where applicable.
Practical rule for the calculator

For a standard new-build residential property, calculate VAT and AJD on the acquisition deed according to the transaction. If there is a mortgage, do not duplicate this AJD by attributing the mortgage loan charge to the buyer.

Tax base · reference value

For resale properties, check the Catastro reference value before applying 6%

For properties subject to TPO, the Catastro reference value may determine the tax base. The Directorate-General for Catastro states that, where the declared value, price or agreed consideration is higher than the reference value, the highest of those amounts is used.

PRE

Price

The consideration agreed between buyer and seller. It is relevant, but it does not always complete the analysis of the tax base.

REF

Reference value

It may determine the tax base for ITP/AJD on properties under national rules.

CAT

Cadastral value

It is a different concept from the reference value and should not be used as though they were the same figure.

TAS

Valuation

The mortgage valuation is used for financing purposes and does not automatically equate to the ITP tax base either.

Calculation risk example

If the contract states €240.000 but the applicable tax base is higher, directly multiplying €240.000 × 6% may understate the self-assessment. Determine the tax base first.

Forms and deadline

Madrid publishes a deadline of 30 business days for TPO and AJD

30

Timeframe

30 business days from the date on which the taxable act or contract is formalised. Saturdays, Sundays and public holidays are not counted.

600

TPO / ITP

The official page for Taxable Transfers identifies the Form 600 for the corresponding self-assessment.

601

AJD

The official Stamp Duty page identifies the Form 601 for the applicable category.

CM

Territorial jurisdiction

Transactions involving properties located in Comunidad de Madrid are filed in accordance with the territorial jurisdiction rules published by the regional government.

Deadlines and forms are operational information subject to change.

This guide was verified on 9 August 2026. Before filing a subsequent self-assessment, check the online portal and current instructions of Comunidad de Madrid again.

Practical examples

Four purchases in Madrid can result in very different tax liabilities

The examples isolate ITP, IVA and AJD. They do not include notary, Land Registry, lawyer, administrative agent, valuation, financing or other costs, and assume that the stated tax base is the one applicable for tax purposes.

Purchase Scenario Simplified calculation Outcome
Usada · €300.000 Standard TPO rate; no reliefs €300.000 × 6% €18.000 ITP
Usada main residence · €200.000 Individual; qualifies for the 10% tax relief €12.000 − 10% of €12.000 €10.800 ITP
Usada · large family · €300.000 Main residence and requirements under Article 29 €300.000 × 4% €12.000 ITP
New build · €300.000 Individual; IVA 10%; AJD 0,75%; no relief €30.000 + €2.250 €32.250 IVA + AJD

Common mistakes

What to check before finalising your tax budget

01

Always apply 6%

6% is the standard TPO rate, but specific reliefs are available for main residences, large families and certain business cases.

02

Confusing tax relief with a tax rate

The general reduction for main residences ≤ €250.000 is a 10% tax credit against the tax due, not a statutory rate of 5,4%.

03

Forgetting the reference value

Price, reference value, cadastral value and valuation are different figures.

04

Treating a new build as a resale

A first transfer subject to IVA follows the IVA + AJD route, rather than the standard TPO route for resales.

05

Combining incompatible reliefs

The rules for main residence and large-family status include express incompatibilities that must be observed.

06

Charging the buyer the mortgage AJD

Since 10 November 2018, for mortgage-backed loan deeds, the taxpayer is the lender.

Official sources

Legislation and administration verified for Comunidad de Madrid

Last verified: 9 August 2026. The consolidated regional legislation consulted in the BOE includes an update published on 30 June 2026.

BOE · Comunidad de Madrid Legislative Decree 1/2010 — consolidated text Regional legal source for TPO and AJD rates, main residence, large-family status and tax benefits. Comunidad de Madrid Taxable Property Transfers General rate of 6%, large-family status, real-estate companies, reference value, Form 600 and deadline. Comunidad de Madrid Documented Legal Acts Rates 0,2% / 0,4% / 0,5% / 0,75%, taxpayer, Form 601 and filing deadline. Comunidad de Madrid Regional tax benefits Official summary of benefits applicable to housing and other cases regulated by the regional government. Spanish Tax Agency · AEAT I am buying a home: VAT or ITP? State source for distinguishing new/usada properties and currently published residential VAT rates. Directorate-General for the Cadastre Tax uses of the reference value State rule on the ITP/AJD tax base and comparison with the price or declared value. Official State Gazette (BOE) · State RDL 1/1993 — ITP and AJD State tax framework, including the graduated duty on notarial documents and general rules. Official State Gazette (BOE) · State Law 37/1992 — VAT Legal basis for VAT on taxable transactions and the rates applicable to housing under the relevant legal provisions.

Related guides

Continue with the article relevant to your transaction

Taxes when buying a home in España National framework for identifying ITP, VAT, AJD and the competent territorial authority. Taxes on a second-hand property Explains the national framework for TPO and refers to the autonomous community for specific rates and benefits. VAT and AJD when buying a new-build property National VAT framework and AJD routing before applying the Madrid rules. Catastro reference value How it may affect the tax base and how it differs from the cadastral value. Costs of buying a home Separates taxes from notary, Land Registry, advisory, financing and other costs. How to buy a home step by step Brings together taxation, legal review, contracts, notary services and post-signing steps.

Frequently asked questions

ITP, VAT and AJD when buying a home in Madrid

The general rate of Transfer Tax (TPO) for the transfer of real estate in Comunidad de Madrid is 6%. Specific benefits are available, such as 4% for certain purchases of a main residence by large families and tax liability rebates in other cases.

Yes. Individuals purchasing a property that will constituite their main residence may apply a 10% reduction to the TPO tax liability where the property value is equal to or less than €250.000. The legal requirements for a main residence must be met.

A reduced rate of 4% may apply where the property is intended to constituite the habitual residence of a large family and the legal requirements are met simultaneously, including proof of status and, where applicable, the sale of the previous habitual residence within the prescribed period.

A 100% tax credit may apply when the buyer is under 35 years of age, the main residence is located in a municipality with fewer than 2.500 inhabitants according to the annual threshold established by law, and the property's value does not exceed €250.000,, provided the other conditions are also met.

For an ordinary first transfer subject to IVA, the general residential rate currently published by the AEAT is 10%. In addition, the deed of purchase may be subject to AJD; for residential purchases by individuals, Madrid applies rates of 0,2%, 0,4%, 0,5% or 0,75%, depending on the circumstances.

For first copies of deeds and notarial records documenting property transfers where the buyer is an individual, Comunidad de Madrid establishes a rate of 0,75% when the relevant value of the property exceeds €180.000,, without prejudice to any applicable exemptions or tax credits.

Yes. Holders of large-family status who acquire a property that is to constituir their habitual residence may apply a 95% reduction to the variable portion of AJD arising from the deed of acquisition when they meet all legal requirements.

No. For real estate, the Catastro reference value may determine the taxable base. If the declared value, price or consideration is higher than the reference value, the legal rule using the higher amount applies.

Comunidad de Madrid currently publishes a deadline of 30 business days from formalisation of the transaction or contract. Its processing pages identify Form 600 for TPO and Form 601 for AJD. This should be checked again if the transaction takes place after the review date of this guide.

Foreign or non-resident status alone does not create a different general TPO rate for a property located in Comunidad de Madrid. The rate and tax benefits depend on the transaction and whether the buyer meets the legal requirements for each scheme.

Important notice. This guide provides general information on taxes when buying a property in Comunidad de Madrid and does not replace personalised tax, legal or notarial advice. Benefits for a main residence, large families, age, municipality, protected housing or business activity depend on specific facts and requirements. The taxable base, forms, deadlines and rates must be checked against the legislation and official instructions in force on the tax due date.

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