Andalucia revises reduced transfer tax – key tax changes for real estate investors
The fiscal environment for property professionals in Andalucia has undergone a significant transformation. Following the formal publication of the 2026 Andalucian regional budget (Law 8/2025) in the Official Gazette (BOJA), a revised set of rules for the 2% Reduced Transfer Tax (ITP) has now come into force.
While Andalucia continues to position itself as a competitive hub for investment, the new legislation introduces “price and pace” restrictions. These measures are designed to encourage the rapid turnover of residential stock while refocusing tax incentives away from the luxury market.
The 2% ‘Resale’ Levy: navigating the new restrictions
For years, property developers and traders utilised a generous five-year window to resell assets under a 2% tax rate with no upper price limit. As of 1 January 2026, the criteria for this relief have been tightened considerably:
- The €500,000 threshold: The 2% reduced rate is now strictly reserved for properties with a total value not exceeding €500,000. This limit encompasses the primary dwelling plus any associated annexes, such as parking spaces or storage units.
- Total valuation rule: It is vital for investors to recognise that the €500,000 cap applies to 100% of the property’s market value. Even if an investor is only purchasing a fractional share of a high-value asset, the relief will be denied if the total valuation of the property exceeds the half-million-euro mark.
- A compressed resale window: the deadline to “flip” the property and qualify for the tax break has been slashed from five years to just two years. Professionals must now complete the resale and hand over the keys within 24 months of the initial purchase.
In the preamble of the 2026 Budget, the Andalucian Government justifies these changes as a means to increase market vitality. By shortening the permitted holding period and capping the property value, the authorities aim to:
- Curtail speculation: Disincentivising the long-term “banking” of residential assets by professional entities.
- Ensure social utility: Directing tax benefits toward the most in-demand segment of the housing market rather than the high-end luxury sector.
- Clarify scope: Providing much-needed legal certainty by explicitly including garages and storage rooms within the tax-advantaged scheme.
Professional Requirements
To successfully claim the 2% rate, the purchaser must be a registered real estate professional (under IAE headings 833.2 or 861.1). Furthermore, the intention to hold the property as trading stock—rather than a fixed asset—must be formally declared within the public deed at the time of completion.
Implications for the Investor
For those engaged in “fix-and-flip” ventures within the mid-market segment, Andalucia remains an exceptionally attractive destination. However, for investors specialising in premium real estate (exceeding €500,000), the standard ITP rates will now apply.
If you are interested in investing in Andalucia and want to ensure your transactions are tax-efficient and legally secure, contact the expert team at My Lawyer in Spain.
