Note

Transfer tax (ITP) in Madrid

§ 1The general rate

For a resale home in the Community of Madrid, the regional tax authority gives the general rate as 6% of the tax base. The base is the higher of the official reference value and the price, so ask your adviser for the reference value of the home before you agree the price.

§ 2Reduced rate for large families

The regional page lists a reduced rate of 4% for the habitual home of a large family. The conditions, including the status of the family and the use of the home as a main residence, are set out by the region. Check them with your adviser before you assume the rate applies.

§ 3The announcement of October 2026

On 5 October 2026 the regional government announced a proposal to cut the rate to 4% for buyers under forty buying a main home of up to €450,000, and to lower stamp duty on new homes for the same group from 0.75% to 0.4%. These are proposals. They are not law, and they do not apply to a deed signed today. We will record any approval, with its date, on the updates page.

§ 4An existing bonus for small municipalities

Madrid also has a 100% bonus on the tax for buyers under 35 who buy their habitual home in a municipality of fewer than 2,500 inhabitants, for a home worth up to €250,000. The regional page we read, last updated on 23 April 2026, gives the conditions, so check them with your adviser.

The October release says both announced cuts will be part of the 2027 regional budget, which the regional government planned to send to its governing council in October. One newspaper reports a start date of 1 January 2027, which the release does not give. We found no report of approval by 26 October.

§ 5What to do now

Budget with the general rate, and treat any reduction as a possible saving, not a plan. If you are under forty and your purchase could wait, ask your adviser whether waiting is sensible, since a proposal can change, be delayed or fail. The deed tax and the other costs of a purchase are explained in the buying costs section.

§ 6Buying in Madrid: what to ask

Madrid has a large resale market, from city flats to homes in the towns around the capital, and the same rate applies across the whole community. That makes the checks on the home matter more than the choice of town: the reference value, the community fees, the registry entry and the energy certificate. Ask your adviser to write down the tax you expect, and the assumptions behind it, before you reserve.

If your purchase falls near the date of any approved change to the rates, ask what applies to a deed signed before and after. Do not time a purchase around a proposal. A home you want, at a price you can afford, with the checks done, is a better reason to buy than a tax announcement that may not pass.

§ 7After the deed

Keep the receipt for the tax payment, the deed and the registry entry together in one folder. If you sell one day, the buyer's adviser will ask for them, and the tax authority in Madrid can ask you to show how the base was set. A note of the reference value you were given, and who gave it, costs nothing to keep and can save an argument years later.

§ 8How other regions compare

The rate in one region says little until it is set beside the others. For the rules that all of them share, see what ITP is.

If you are weighing several areas, read the Andalusian system next, then the Balearic scale.

Buyers choosing between regions often set the Basque system beside how regions set ITP.

For other parts of the country, see the Castilla-La Mancha system and the Catalan system.

The Galician system and Murcia buyers' tax show how different neighbouring systems can be.

Two more systems to look at are when a lower rate applies and Valencian buyers' tax.

Tax note. Rates depend on the region, the type of property and the buyer, and they change. Figures here are dated and sourced; examples are illustrative and show their assumptions. Confirm yours with the regional tax agency or a tax adviser.