Buying with a mortgage in Valencia: how IGIC changes your purchase costs

Anyone comparing notes with a friend who bought a flat in Valencia or anywhere on the mainland will notice the figures do not match. That is because the Canary Islands sit outside the mainland VAT system. Instead of the national VAT applied to new-build homes elsewhere, properties in Valencia are taxed under IGIC, the islands' own indirect tax, administered locally rather than by the national tax agency.

For a non-resident buyer arranging a mortgage from the United Kingdom, this matters because the bank will want to see that you have budgeted correctly for completion day. Getting the tax treatment wrong at the planning stage can leave a gap between what you expected to pay in cash and what the notary actually asks for.

Valencia province combines the city of Valencia with coastal towns and inland countryside along Spain's eastern Mediterranean coast. It attracts buyers interested in urban amenities alongside beach access, as well as those seeking a lower-key alternative to more built-up coastal regions further south.

Valencia Airport provides good international connectivity, supporting both city-based buyers and those settling in nearby coastal or rural areas. Property types range from city apartments to coastal homes and traditional country houses, with tourist activity concentrated mainly in the summer season.

Before you commit to the numbers of a mortgage, it helps to know the place: dated figures on population, asking prices, transport links and climate in Valencia (province), each with its source. Together they give a grounded sense of Valencia (province) to weigh against your budget.

Valencia province, taken as a whole rather than just its capital, counted 2,763,996 registered residents on 1 January 2025 in the INE census. The number reflects the full territory, large and small municipalities alike, that makes up the province. Across the province of Valencia, 439,728 residents carry a foreign nationality, near 16 of every 100. This is a solid but moderate presence, one that differs a great deal from town to town across the province.

INE counted only 9,350 British nationals registered in the whole province of Valencia on 1 January 2025, a small number of compatriots. Remember that the padrón only reflects people living there most of the year, not second-home owners. The table below lists the largest foreign nationalities registered in Valencia (province) on 1 January 2025, among those INE publishes for every municipality.

A further table sets out nationalities not broken down above, among them Germans, Italians, Dutch, Belgians and Scandinavians, registered throughout Valencia province. Unlike that earlier table, this one uses data from 1 January 2022, the latest edition with full nationality detail.

In our own price bank, the 5,843 homes currently advertised for sale across the province of Valencia show a median asking price of €2,040/m² and a median ticket of €227,000. Both sit below the €3,135/m² median across the 130 towns we track across Spain, making the province one of the more affordable among them. Among current adverts, the central half cluster between €1,340 and €2,930 per square metre; some properties are listed well below this band, others well above it.

Taking €227,000 as the median asking price in Valencia (province), the resale transfer tax of 9 % amounts to about €20,400, with a further €2,700 for notary, registry and gestoría fees. That puts the total near €23,200, which a lender does not finance and must come from savings. 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.

The table below brings together the towns we track across Valencia (province), listing inhabitants, foreign residents per 100 people and median asking price per square metre, to show how much these markets differ.

INE's experimental statistic, based on listings from the main holiday-rental platforms, found 12,130 holiday-let homes in Valencia (province) in 05/2026 (59,216 bed places), about 4 per 1,000 residents. That is a low presence, consistent with a mainly residential market.

As Valencia is served by only one commercial airport, Aeropuerto de Valencia (VLC), buyers near the provincial border should also weigh up whether an airport just across the boundary might be more convenient. The climate figures below were recorded in or near Valencia, the provincial capital, and conditions elsewhere in the province, inland, at altitude or on other islands, can differ noticeably. January averages 11.8 °C, with a typical overnight minimum of 7.1 °C, while August reaches a mean of 26.1 °C and a daily maximum around 30.2 °C. Winter here is cool rather than cold, so heating matters and is worth checking in any home. Rainfall is moderate: about 475 mm a year, spread over roughly 46 days with measurable rain. On average, 2,696 hours of sunshine are recorded each year. Source: the 1981-2010 climate normals published by AEMET, the state weather agency, for its València station, some 1 km from here; local conditions can differ, especially inland or at altitude.

40,451 home sales were registered in the province of Valencia in the twelve months to 07/2026, according to INE. A market of this size usually means more comparable sales and a wider choice of homes for buyers. These are province-wide figures for Valencia, 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 Valencia the general rate is 9 %, 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.

The first question your gestoría will ask is whether the home in Valencia is a new build sold directly by a developer or a resale changing hands between private owners. For a new build, IGIC is charged instead of mainland VAT, together with a stamp duty element. For a resale, the buyer pays ITP, the regional transfer tax, calculated on the declared value of the property and set by the Canary Islands government rather than by Madrid.

Either way, the tax is paid on completion, on top of the agreed price, and it needs to be covered with your own funds rather than through the mortgage, since Spanish banks finance the purchase price, not the taxes around it.

Beyond the headline tax, the rest of the cost structure in Valencia looks much like anywhere else in Spain. You will still need to budget for notary fees, land registry inscription, gestoría charges and the bank's own valuation of the property, since the mortgage lender needs an independent figure to decide how much it is prepared to lend.

Spanish banks usually ask non-residents for a larger deposit than residents, and the exact share depends on the bank, your country and your profile, so it is worth getting a written estimate from more than one lender before you commit to a purchase date.

Spanish lenders assess a non-resident file by looking at income and existing debt back in the United Kingdom, usually translated by a sworn translator and sometimes apostilled. Preparing this early avoids delays once you have found a property in Valencia you want to secure with a mortgage offer.

Because the United Kingdom is no longer an EU member state, British citizens can stay in Spain for up to 90 days in any 180-day period without a visa; longer stays, for example while completing renovation works or settling in, require a visa or residence permit arranged separately from the mortgage.

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.