Buying a Car in Spain: Taxes, Incentives and Deductions Explained

Buying a Car in Spain? Here's What You Need to Know About Taxes and Deductions (2026 Guide)

A car in Spain costs more than the price on the windscreen. You pay a purchase tax, a one off registration tax and an annual town hall tax. Buy electric and there is a grant and a tax deduction to claim back. Here is what applies in 2026.

1. VAT (IVA) and Patrimonial Transfer Tax

VAT on new vehicles

• New cars: value added tax, called IVA in Spain, is 21% and is already inside the dealer’s price.
• The 4% rate: it covers vehicles for people with reduced mobility, and cars that regularly carry a passenger with a disability of 33% or more. There is no 4% rate for large families.

Transfer Tax (ITP) on used vehicles

• Buying privately: you pay transfer tax, the Impuesto sobre Transmisiones Patrimoniales, shortened to ITP. Where the region has set no rate of its own, it is 4%.
• Regions differ: Catalonia charges 5%, and 0% since 27 June 2025 on a used car with the zero emissions badge. The return still has to be filed.

2. Registration Tax (IEDMT)

How IEDMT is calculated

You pay this once, the first time a car is registered in Spain. Its name is the Impuesto Especial sobre Determinados Medios de Transporte, shortened to IEDMT. The rate follows the official carbon dioxide figure:

• 120 g/km or less: 0%, where every battery electric car sits
• More than 120 and below 160 g/km: 4.75%
• 160 g/km or more and below 200 g/km: 9.75%
• 200 g/km or more: 14.75%

Those are the mainland and Balearic rates. The Canary Islands pay 3.75%, 8.75% and 13.75%, and Ceuta and Melilla pay 0%. Regions may set their own rates, so check yours.

Exemptions and reductions

• Cars with only an electric motor, always in the 0% band
• Adapted vehicles for drivers with a disability
• Large families: 50% off the taxable value on a car of five to nine seats, registered to a parent and kept for four years
• Moving to Spain: no tax at all if you lived abroad for the previous twelve months, used the car for six months before you left, and keep it for a year

3. Import Duties and Moving to Spain with a Car

Importing a car from outside the EU

• From outside the European Union: customs duty applies at the rate in the European Union common customs tariff, with 21% import value added tax on top. Homologation paperwork adds more.
• Moving your home: customs has its own relief for belongings brought in when you move, and the registration tax exemption above applies too. Miss one condition and you pay in full.

Bringing a car from the EU

• EU origin: no customs duty, because the car was already taxed inside the European Union.
• Unless it counts as new: value added tax is due again if the car is handed over within six months of first going on the road, or has covered 6,000 km or less.

4. Electric Car Grants and the Income Tax Deduction

Auto+ replaced MOVES III

MOVES III ended with 2025. The state scheme for 2026 is Auto+, created by Royal Decree 609/2026 of 22 July. Only cars with the zero emissions badge qualify, which covers battery electric, hydrogen, plug in hybrid and extended range cars.

• Private buyers and larger companies: up to €4,500 for a car, up to €5,000 for a van
• Self employed people and the smallest firms: up to €6,000 for a car, up to €7,500 for a van
• The car has to cost €45,000 or less before tax

Few people get the full amount. It is built in slices: half the maximum for a pure electric car, a quarter for a plug in hybrid, more for a lower price and for assembly in the European Union.

The 15% income tax deduction

You can also take 15% of the price off your Spanish income tax, the IRPF. The most you can count is €20,000, and any grant comes off first. Both the grant and the deduction close on 31 December 2026.

5. Deductions for EV Charging Point Installations

Tax deductions for home charging

Fit a charging point at home and take 15% of the cost off your income tax, counting up to €4,000 a year, for work paid for up to 31 December 2026. Cash payments do not count.

Grants for charging points

The MOVES III grants for home charging closed with the programme, and Auto+ pays for the car only. Some regions still run their own, so ask your regional energy office.

6. VAT Deductions for Self-Employed and Companies

Self-employed VAT rules

• Half by default: a car is assumed to be 50% business use, so you claim back half the value added tax, and half on fuel, repairs and tolls.
• All of it, in six cases: goods vehicles, paid passenger transport such as a taxi, driving school cars, manufacturer demonstration cars, commercial agents and representatives, and security vehicles.
• Income tax is stricter: use the car privately at all and it is not a business asset, so you cannot write it off. The only exceptions are goods vehicles, paid passenger transport, driving school cars, cars used by commercial agents and representatives, and cars hired out for payment.

Incentives for company fleets

• Companies and self employed people apply on the Auto+ business line, which also covers leasing and long term rental.

7. Annual Road Tax (IVTM)

How IVTM is calculated

Your town hall charges this every year. Its name is the Impuesto sobre Vehículos de Tracción Mecánica, shortened to IVTM. The national scale for cars runs from €12.62 to €112.00, and town halls may double it.

They may also cut it by up to 75% for a cleaner fuel or engine, which is where electric cars gain, and by up to 100% for a car of 25 years or more.

For a detailed guide, see: Car Road Tax IVTM In Spain - An Expat's Guide

8. ITV (Technical Vehicle Inspection)

ITV schedule for Spanish vehicles

The roadworthiness test is the ITV, the Inspección Técnica de Vehículos. A car is exempt for four years, then tested every two years, then once a year after ten years.

ITV for imported vehicles

An imported car needs an ITV before it can be registered here, even a nearly new one. The station issues the Spanish technical sheet.

Read more: Can I Get A Spanish ITV For My British Car?

9. Eco and Scrappage Incentives

Regional eco-incentives

• Auto+ does not ask you to scrap an old car, and scrapping one does not raise the grant
• What raises it is a pure electric car, a lower price, and assembly in the European Union
• Regional "Plan Renove" schemes come and go, so check your own region

10. Buying Tips and Additional Costs

Additional purchase considerations

• The traffic authority charges €99.77 to register a car. Plates, translations, homologation and any gestor are on top.
• Only third party liability insurance is compulsory. Fully comprehensive cover is a choice, not a legal requirement.
• Since 1 January 2026 the connected V-16 beacon is the only legal way to mark a broken down car. Warning triangles no longer count.
• A car brought from abroad cannot be driven here until it is registered. Temporary green plates last two months.
• Registration tax is settled before registration, and filing late brings a penalty.

Need help registering or importing a vehicle? Check out:
How To Register A Vehicle From The EU In Spain | Guide to Importing a Car into Spain

Summary for 2026

Spain still pays people to go electric, but through a new door. Auto+ replaced MOVES III, and the 15% deductions for a car and a home charging point run to the end of 2026. Everything else depends on where you live.

Protect Yourself on the Road

Driving in Spain? Most private health policies here exclude road accidents. The Sanitas Top Quantum plan includes traffic and work accident cover at no extra cost, and you can add it to most other plans.