The Andalusian Government has recently introduced significant changes to the reduced 2% Transfer Tax (ITP) regime applicable to real estate companies acquiring residential properties for resale. These amendments, approved through the 2026 Andalusian Budget Law, substantially alter a tax incentive that had been widely used by property investors and developers operating in Andalusia.
In this article, Franke & de la Fuente explains what has changed, the new limitations now in force, and how these amendments affect real estate investment strategies in the region.
Background: The Reduced 2% Transfer Tax in Andalusia
Until now, Andalusian tax legislation allowed natural and legal persons engaged in real estate activities to benefit from a reduced 2% ITP rate when acquiring residential properties for resale, provided that the property was sold within a five-year period.
This incentive was designed to encourage market liquidity and professional investment activity in the residential real estate sector, particularly for developers, property traders, and investment companies.
The Legal Change: New Rules Introduced in the 2026 Andalusian Budget
The reduced tax regime has been modified by Ley 8/2025, de 22 de diciembre, approving the Budget of the Autonomous Community of Andalusia for 2026, published in the Official Gazette of the Andalusian Government (BOJA) no. 251 of 31 December 2025.
This law amends Article 44 of Law 5/2021 on Taxes Ceded to the Autonomous Community of Andalusia, introducing stricter conditions for applying the reduced 2% transfer tax rate.
Key Changes to the 2% Transfer Tax Regime
- Shorter Resale Period
One of the most relevant changes is the reduction of the resale deadline:
- Previously: resale within 5 years
- Currently: resale within 2 years
The resale must be formalized in a public deed, with effective delivery of possession, and must be subject to (and not exempt from) transfer tax.
- New Maximum Property Value Threshold
The reduced 2% rate will now only apply if:
- The declared value of the property and its annexes does not exceed €500,000
For these purposes, the value refers to 100% of the full ownership of the property, regardless of whether the acquisition is partial.
- Eligible Buyers and Activity Requirements
The benefit is limited to natural or legal persons whose main activity consists of:
- Construction or property development
- Purchase, sale, or rental of real estate
This must be reflected in the corresponding IAE classification, and the acquisition must be expressly stated as being intended for resale and inclusion in current assets.
- Formal Requirements and Risk of Regularization
To apply the reduced rate:
- The acquisition must be executed in a public deed
- The deed must include an express intention to resell
- The property must be resold within two years
- Non-compliance will trigger the general ITP rate, together with possible interest and penalties
Impact on Real Estate Investors and Companies
These amendments significantly narrow the scope of the reduced tax regime. Real estate companies should now reassess:
- Holding periods and exit strategies
- Property valuation thresholds
- Compliance and documentary requirements
Transactions involving higher-value properties or longer investment horizons may no longer qualify for the reduced rate, increasing acquisition costs.
Strategic Considerations Under the New Regime
In this new context, proper tax planning prior to acquisition is essential. Companies should review their investment structures, ensure compliance with formalities, and carefully monitor resale deadlines to preserve tax benefits.
How Franke & de la Fuente Can Assist
At Franke & de la Fuente, we advise national and international clients on real estate taxation, investment structuring, and regulatory compliance in Andalusia. Our team continuously monitors legislative developments to provide practical, up-to-date advice tailored to each client’s objectives.
If you are planning a real estate investment in Andalusia or would like to assess how these changes affect your portfolio, our firm is available to provide specialized legal and tax guidance.
