Buying a Car in Spain: Taxes, Incentives and Deductions Explained (2025)
Expat Tips
Published: 23 March 2025 22:50 CET
Updated for 2025: Understand the taxes and potential deductions when buying a car in Spain, from VAT and registration tax to eco-incentives and deductions for charging stations.
Buying a Car in Spain? Here's What You Need to Know About Taxes and Deductions (2025 Guide)
Whether you're an expat settling in Spain or a long-time resident upgrading your ride, purchasing a car comes with more than just the sticker price. Here's a breakdown of the key taxes, costs, and deductions you should know about in 2025.
1. VAT (IVA) and Patrimonial Transfer Tax
- New cars: VAT (IVA) of 21% applies and is included in the dealership's price.
- Used cars: Pay the Transfer Tax (ITP), usually 4% to 8%, depending on your region. In areas like Cataluña, cars over 10 years old may be exempt.
2. Registration Tax (IEDMT)
This one-time tax is based on the vehicle’s CO₂ emissions:
- Up to 120 g/km: 0%
- 121–159 g/km: 4.75%
- 160–199 g/km: 9.75%
- 200+ g/km: 14.75%
3. Deductions for Electric Vehicles
Buying an electric vehicle (EV)? You can deduct 15% of the purchase price from your tax return for cars bought between June 30, 2023, and December 31, 2024. The max deduction is calculated on €20,000, excluding any subsidies.
4. Charging Infrastructure Deductions
If you install an EV charging station, you can deduct 15% of the installation cost, up to €4,000. This applies to installations completed by the end of 2024.
5. VAT Deductions for the Self-Employed
- General rule: Deduct 50% of VAT if you use the car partly for work.
- 100% deduction: Only available if the car is exclusively for professional use (e.g., driving schools, transport businesses).
6. Annual Road Tax (IVTM)
This yearly tax is set by your local municipality and based on the car’s fiscal horsepower. In cities like Madrid and Barcelona, it can range from €22 to €224 per year.
For a detailed guide, see: Car Road Tax IVTM In Spain - An Expat's Guide
7. ITV (Vehicle Inspection)
New cars are exempt from inspection for the first 4 years. Then it’s every 2 years until the car is 10 years old, and annually after that.
Also read: Can I Get A Spanish ITV For My British Car?
8. Other Considerations
- Scrappage programs: Some regions offer incentives if you scrap an old car while buying a new one.
- Importing a car: Watch out for customs duties, VAT, and IEDMT depending on the car's origin and specs - read more on importing a vehicle into Spain here.
Need help registering a vehicle? Check out: How To Register A Vehicle From The EU In Spain
