Tax Guide for Foreign Investors on the Costa Blanca

A practical guide for international investors

In this practical guide for international investors considering buying a home in the Costa Blanca (Alicante) through Cresmarta, we analyze the main taxes when buying property in Spain, the fiscal costs involved when investing in a home in Alicante, and the latest requirements of the former Golden Visa Spain program (until its modification in 2025).

The goal is to help you understand all the tax costs, real advantages, and current requirements so that your investment is solid and well-informed.

Breakdown of taxes when buying property in Spain

When a foreign investor decides to buy a home in Alicante, there are essentially three main tax categories to consider: VAT (IVA) for new builds, ITP (Transfer Tax) for resale properties, and the municipal capital gains tax (plusvalía) when selling later.

VAT

If you buy a new property (directly from a developer), VAT applies—typically 10% of the purchase price for residential properties.
Additionally, the Stamp Duty (AJD) ranges between 0.5% and 1.5%, depending on the autonomous region.
Therefore, buying a new property on the Costa Blanca means budgeting around 11% extra just for taxes when buying property in Spain in that category.

ITP

If the property is a resale (not new), VAT does not apply; instead, ITP (Transfer Tax) is due.
In the Valencian Community (where Alicante is located), this rate is generally around 10%.
Hence, for a resale home in Alicante, taxes when buying property in Spain in the form of ITP will approximately equal that percentage.
Always check the exact ITP rate at the time of purchase, as there may be reductions or bonuses.

Municipal Capital Gains Tax (Plusvalía)

When selling, there is a municipal tax based on the increase in the land’s cadastral value.
It depends on both the property’s value increase and the ownership period—so plan ahead for this potential future cost.

Additional costs, the 10–15% rule

Experts recommend setting aside 10–15% on top of the purchase price to cover taxes, notary fees, registry costs, and legal expenses.
In practice, when investing in Alicante, this means including room for these taxes when buying property in Spain.

Fiscal advantages for foreign investors

Investing with Cresmarta in the Costa Blanca offers specific advantages:

• There are no legal restrictions for foreigners to buy property in Spain. You just need an NIE (Foreigner Identification Number).

• Working with Cresmarta avoids unpleasant surprises regarding taxes when buying property in Spain, as all calculations are done in advance.

• The Costa Blanca’s international appeal boosts potential rental income and resale value.

• Although the Golden Visa linked to property investment has ended, real estate investment remains legal and valuable within the EU.

• Non-residents (spending under 183 days/year in Spain) are subject to specific tax rules for rental income and capital gains.

Golden Visa Spain 2025, updated situation

Until April 3, 2025, the Golden Visa program allowed non-EU investors to obtain residence by investing in real estate.

Previous requirements:

• Minimum investment of €500,000 free of charges.

• Could also be achieved via capital, bonds, or funds.

• Investment had to be maintained to renew the residence.

Current situation (2025):

• The program was abolished for new property-based applications.

• Applications filed before that date will still be processed, but no new ones are accepted.

Consequences for investors:

• Although residence-by-investment is no longer possible, the Costa Blanca remains an attractive property market.

• When planning your purchase with Cresmarta, note that taxes when buying property in Spain still apply normally.

• If residence was your goal, consider other visas such as the non-lucrative visa.

Steps to invest with Cresmarta

1. Define your total budget: property price + taxes when buying property in Spain (10–15%) + legal fees.

2. Confirm with Cresmarta whether the home is new or resale (to know if VAT or ITP applies).

3. Obtain an NIE and open a Spanish bank account (Cresmarta can assist).

4. Calculate exact taxes in Alicante before signing.

5. Sign before a notary, register the property, and pay taxes within the legal deadlines.

6. If buying as a non-resident, check annual tax obligations (especially for rental income).

7. Keep all documentation for future capital gains calculations.

Conclusion

Investing in the Costa Blanca through Cresmarta remains an excellent opportunity.
However, taxes when buying property in Spain are a key part of the process—whether new builds (VAT + AJD) or resales (ITP).
While the Golden Visa Spain is no longer available, property investment by foreign buyers remains fully legal and highly attractive.
With expert advice, careful planning, and the support of Cresmarta, your investment will be safe, compliant, and profitable.