Decree Law 5/2025: Tax Changes in Catalonia

How to understand the new tax rules in the purchase of a propety in Catalunya.

New rules for ITP, IRPF and the tourist tax

Over the past few months, we at Urbane International Real Estate have been closely following the evolving tax landscape in Catalonia — particularly as it affects the real estate market. With the recent approval of Decree Law 5/2025, those anticipated changes are now officially set to take effect.

This legislative package, introduced by the Catalan government, is designed to promote a more progressive tax structure. It aims to ease the burden on lower-income households, first-time buyers, and vulnerable groups, while placing greater pressure on high-value transactions and speculative investments. Key updates affect the Property Transfer Tax (ITP), personal income tax (IRPF), and the tourist tax, with all measures due to take effect from June 27, 2025.

That said, the practical impact for many buyers in Barcelona may be limited. With property prices well above the regional average, most prospective buyers in the city won’t meet the income criteria needed to benefit from the proposed tax relief.

“The Catalan government seems particularly active lately — revising tax laws, reshaping rental regulations, and now raising ITP to record highs,” says Katya Moshnikova, Senior Sales Consultant at Urbane International in Barcelona. “At a time when the market needs support, shouldn’t we be seeing more incentives and not slim changes htere while than adding more pressure for higher priced buyers?”

Here is a breakdown of the changes introduced yesterday by the Catalan government. 

1. Property Transfer Tax (ITP) Reforms

ITP, which applies to the purchase of second-hand properties, now follows a progressive structure based on property value:

• 10% up to €600,000
• 11% between €600,001 and €900,000
• 12% between €900,001 and €1,500,000
• 13% above €1,500,001

Additional provisions include:

• 5% reduced rate for young buyers up to 35 years old (previously 32) purchasing their primary residence.
• 5% reduced rate for victims of gender-based violence buying their main home.
• 20% flat rate for large property holders (owning 10+ residential units).
• 20% rate on the purchase of entire residential buildings (unless bought by a natural person acquiring up to four homes for family use).
• 50% ITP discount for converting office buildings or unfinished structures into social housing, or for properties used as company offices or workspaces.

2. IRPF (Income Tax) Adjustments

• Lower rate: Reduced from 10.5% to 9.5% for annual incomes under €33,000.
• Simplified tax bands: From 9 to 8 brackets.
• Rental deduction improvements:
  • Age limit raised from 32 to 35 years.
  • Income threshold raised from €20,000 to €30,000.
  • Deduction cap increased from €300 to €500.
  • Eliminates the requirement that rent must exceed 10% of income.
• New deductions introduced:
  • Up to €1,000 for rental by victims of gender-based violence.
  • Up to €3,000 for capital contributions to agricultural or housing cooperatives.
  • €150 (individual) or €300 (joint) for hosting minors.

3. Tourist Tax Increases

• Double rates: The tourist tax is doubled across all categories.
• In Barcelona: €2 to €7 per person per night.
• Rest of Catalonia: €1.20 to €6 per person per night.
• New allocation: For the first time, 25% of the funds will go toward housing policy.
• Strategic goals: Revenues will support sustainability, year-round tourism, and low-emission mobility.

Need help understanding how these new tax measures will impact your property plans in Catalonia? Contact our team at Urbane International Real Estate for expert guidance.