If you are buying your first home on the Costa Blanca, Costa Cálida, Costa del Sol or Costa Almería, there are two main forms of government help worth knowing about: the state-backed ICO mortgage guarantee, which lets qualifying young buyers borrow up to 100% of the purchase price without a large deposit, and regional tax reductions on ITP (transfer tax) that can knock several thousand euros off your total buying costs. These schemes are run partly by central government and partly by the autonomous communities — the Comunitat Valenciana (Costa Blanca & the Alicante side of Costa Cálida) and Andalucía (Costa del Sol & Costa Almería) — so the exact figures differ depending on which coast you buy on.
In short: the biggest practical wins for a first-time buyer are (1) qualifying for the ICO guarantee so you need only a modest deposit, and (2) claiming the reduced ITP rate that both regions offer to younger buyers and buyers on lower incomes purchasing a habitual (main) residence. Below we set out who qualifies, the real regional rates, and how these interact with the standard 11–14% additional buying costs every purchaser faces.
Spain does not have a single national "first-time buyer" definition. Instead, eligibility depends on the specific scheme. Most support is targeted at buyers who are:
Note that most of these schemes require Spanish tax residency or a genuine intention to live in the property year-round. Non-resident buyers purchasing a second home on the coast generally will not qualify for the guarantee or the reduced rates — though they still benefit from the standard tax framework described below.
The ICO (Instituto de Crédito Oficial) guarantee is a central-government scheme under which the state acts as guarantor for part of a young buyer's mortgage — typically the portion above 80% of the property value. Because Spanish banks usually lend only up to 80% of the lower of the purchase price or valuation, the missing 20% deposit is the single biggest barrier for young buyers. The ICO guarantee is designed to cover that gap, effectively allowing financing of up to 100% of the purchase price (and in some family-oriented cases slightly more).
Broad eligibility conditions generally include:
The guarantee is arranged through your bank, not applied for directly by you. So the practical step is to ask lenders whether they participate and whether your chosen Costa Blanca or Costa del Sol property qualifies. Because criteria and thresholds are periodically updated by the government, always confirm the current figures with the lender and your lawyer before committing.
A 100% mortgage covers the purchase price — it does not cover the additional buying costs (taxes and fees) of roughly 11–14%. Even with the ICO guarantee, you must have cash available for ITP or IVA, notary, registry and legal fees. Budget for these from the outset.
Every buyer in our four regions pays a similar set of costs. The main variable is the transfer tax (ITP) on resale homes, which is set by the autonomous community — and this is exactly where first-time and young-buyer reductions kick in.
| Cost item | Costa Blanca & Costa Cálida (Alicante) — Comunitat Valenciana | Costa del Sol & Costa Almería — Andalucía |
|---|---|---|
| ITP transfer tax (resale, standard rate) | ~10% | ~7% (general fixed rate) |
| ITP reduced rate (qualifying young/first-time buyer, habitual home) | Reduced rate available for under-35s and other qualifying groups | Reduced rate available for under-35s and qualifying groups |
| IVA (VAT) on new build | 10% | 10% |
| AJD stamp duty (new build) | ~1.5% | ~1.2% |
| Notary, registry & legal fees | ~1–2% | ~1–2% |
| Typical total additional costs | ~11–13% | ~10–12% |
Rates are periodically revised by each regional government, and the exact reduced percentages and income/value ceilings change. Treat the figures above as a planning guide and confirm the current numbers with your lawyer at the point of purchase.
The Comunitat Valenciana — which covers the Costa Blanca (Alicante, Torrevieja, Dénia, Jávea, Orihuela Costa) and the Alicante-province stretch of the Costa Cálida — applies a general ITP of around 10% on resale homes. For qualifying buyers it offers reduced ITP rates where the property is purchased as a habitual residence and the buyer meets conditions such as:
Additional reductions may apply for large families, single-parent families and buyers with a recognised disability. These are claimed at the point the deed is signed and the tax is self-assessed, so your lawyer must apply the correct rate on the tax return — you rarely receive a "grant" as a cash payment; the benefit comes as a lower tax bill.
Andalucía covers the Costa del Sol (Málaga, Marbella, Estepona, Fuengirola) and the Costa Almería (Mojácar, Vera, Almería city). Andalucía applies a fixed general ITP rate of around 7% on resale purchases — already lower than the Comunitat Valenciana's general rate. On top of this, it offers a reduced ITP rate for qualifying groups, including younger buyers under 35, buyers with a disability and large families, where the property is a habitual residence and its value falls under a set ceiling.
Because Andalucía's baseline rate is already relatively competitive, first-time buyers of moderately priced homes on the Costa del Sol or Costa Almería can benefit meaningfully, particularly in the more affordable inland or Almería-province towns where property values are more likely to fall within the qualifying threshold.
The two schemes work on different parts of the transaction, so a well-prepared young buyer can potentially use both:
Imagine a 32-year-old resident buying a €160,000 resale apartment as a first habitual home in Torrevieja (Costa Blanca):
The combined effect is that a young resident buyer who once needed ~€50,000+ upfront might need substantially less — the single most important factor in getting onto the coastal property ladder.
Generally no. These schemes are aimed at buyers purchasing a habitual (main) residence and usually require Spanish tax residency or a genuine intention to live in the property. Non-resident buyers of holiday or investment homes typically pay the standard rates and finance up to around 70–80% via a non-resident mortgage.
No. The guarantee applies to the purchase price only. You still need cash for the 11–14% additional buying costs — ITP or IVA, AJD, notary, registry and legal fees. Always budget these separately.
Andalucía (Costa del Sol, Costa Almería) has a lower general ITP rate (~7%) than the Comunitat Valenciana (~10%), so before reductions Andalucía is often cheaper on transfer tax. However, both regions offer young-buyer and first-home reductions, and property prices vary hugely by town — so compare the total on your specific purchase, not just the headline rate.
The most generous tax reductions and the ICO guarantee are typically aimed at buyers under 35. Some reductions also extend to large families, single-parent families and buyers with a recognised disability regardless of age. Confirm the current age and income thresholds with your lawyer, as regional governments update them.
New builds are taxed under IVA (10%) plus AJD rather than ITP, so the ITP-based reductions do not apply in the same way. The ICO mortgage guarantee, however, can apply to both new and resale habitual homes. If you are torn between a new build and a resale on the Costa Cálida or Costa Almería, factor this tax difference into your comparison.
You do not usually receive cash. The reduced rate is applied when the tax on the purchase is self-assessed and paid after signing the title deed at the notary. Your lawyer applies the correct rate and keeps evidence of eligibility, which is why using an experienced independent lawyer is essential.
Government help can transform what a young or first-time buyer can afford on the Costa Blanca, Costa Cálida, Costa del Sol and Costa Almería — but the schemes are region-specific and the thresholds change. At Mediter Real Estate we help international and resident buyers find the right coastal home and connect you with trusted lawyers and mortgage advisers who can confirm your eligibility for the ICO guarantee and regional tax reductions. Contact Mediter Real Estate today to discuss your first purchase in any of our four regions and let us guide you from viewing to keys.
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