Valencia vs Alicante: Same 9% ITP, Two Economies Apart

Quick answer: Both provinces sit in the Comunitat Valenciana and share its tax code, so the comparison is not about rates. It is about which side of the €1 million ITP threshold your purchase falls on, and about the fact that these are two different kinds of market underneath: Valencia is a city economy letting to residents, Alicante is Spain’s most international coastal market letting to visitors. The tax question is arithmetic. The market question decides everything else.

The tax point, stated once and put away

Both provinces are governed by the same regional rules, so nobody should choose between them on tax. What does deserve attention is the threshold, because it is new and it is a step rather than a slope.

Line	Valencia and Alicante alike
Resale under €1,000,000	9% ITP, reduced from 10% by Ley 5/2025 from 1 June 2026
Resale above €1,000,000	11% on the portion above the threshold
New build	10% IVA plus 1.4% AJD, the AJD cut from 1.5%
Notary, registry, legal	roughly 1.5% to 2.5%
Non-resident rental tax	19% of net for EU and EEA residents, 24% of gross otherwise

On a €400,000 resale the ITP is €36,000 in either province. On a €1.2 million resale it is €90,000 on the first million plus €22,000 on the remainder, €112,000 in total. The threshold matters most to buyers landing just above it, where a modest price reduction can produce a disproportionate tax saving and is worth raising in negotiation.

Everything below is about the markets, because that is where the two genuinely differ.

Two different economies, not two versions of one

Valencia is Spain’s third city. Its rental demand comes from employment: a large university and hospital system, a port, a growing technology sector and a substantial public administration. The tenant signs a twelve-month contract under the Ley de Arrendamientos Urbanos and pays every month of the year.

Alicante province is Spain’s most internationally exposed property market. It recorded 53,385 residential transactions in 2025 with a 43.29% foreign-buyer share, the highest of any province, at 25.86 transactions per 1,000 inhabitants, also the highest. Its demand is second homes and visitors, concentrated on a coastline running from Dénia to Torrevieja.

	Valencia province	Alicante province
Demand driver	Urban employment and study	International second homes and tourism
Typical letting model	Twelve-month residential tenancy	Licensed short let, or seasonal
Foreign-buyer share	Well below the national picture on the coast	43.29%, the highest in Spain
Seasonality	Minimal	Significant, varying by town
Exit buyer	Mostly Spanish, mortgage-financed	Frequently international, often cash
Main risk	Spanish employment and lending conditions	Licence policy and season strength

That last row is the honest summary. Neither risk is smaller. They are different, and a portfolio holding both is more diversified than one holding two coastal towns.

What does each letting model actually produce?

Take €300,000 into each and carry it through.

Valencia city, two-bedroom apartment, €300,000. Acquisition at 9% ITP plus notary, registry and legal work commits roughly €333,000. Let on a twelve-month tenancy at €1,150 a month it grosses €13,800 with low vacancy. Community charges on a city block, IBI, insurance, maintenance and an agent’s fee absorb perhaps €3,900, leaving €9,900 before tax. An EU-resident owner keeps about €8,019 after 19%, roughly 2.4% on committed capital, with minimal seasonality and no licence dependency.

Alicante coast, two-bedroom apartment, €300,000. The same arithmetic commits roughly €333,000. Licensed short letting might gross €18,000 in a good season. Management at 22% takes €3,960, and community charges on a coastal scheme with a pool, plus IBI, insurance and maintenance, absorb perhaps €4,400. That leaves €9,640 before tax, or about €7,808 after 19%: roughly 2.3%.

The gross figures differ by 30%. The net figures are within a few hundred euros. What differs is the risk carried to get there: the Valencia figure depends on a tenant staying employed, the Alicante figure on a licence remaining valid and a season performing.

A non-EU owner should run both again at 24% of gross with nothing deductible, and the interesting number is the gap rather than the bill. In Valencia the non-EU owner pays about €1,430 more than the EU owner on the same property; on the Alicante coast the same comparison costs about €2,490. The penalty scales with gross rent, not with profit, so it lands hardest on the model with the higher headline yield, the opposite of what most buyers assume, and enough to reverse the ranking between the two.

Two different economies produce two different income streams from the same tax code. Valencia city rents to residents on annual contracts, drawn from a university, a port and a services economy, which produces a steady figure with no shoulder season to underwrite and a domestic exit when you sell. Alicante carries a 43.29% foreign-buyer share across its province and a holiday calendar, which produces a higher peak and a longer trough. Acquisition is identical in both: 9% ITP on a resale under €1,000,000 and 11% on the portion above under Ley 5/2025 from 1 June 2026, with 10% IVA plus 1.4% AJD on a new build. The choice is therefore about which income stream you want, not about where the money goes further. Both cities sit under the same regional licence regime, so the paperwork is identical too.

Where the licence question bites

In Alicante it is central, and it has two independent gatekeepers. The regional one is the VUT registration, which requires municipal compatibility for the exact address, and coastal municipalities have diverged sharply on whether to grant it for new applications. The building-level one is the community of owners, which since 2019 has been able to shut tourist use down by qualified majority. Either can refuse, and a refusal at either level ends the strategy; a buyer who has cleared only one of them has cleared nothing.

In Valencia city it matters much less, because the realistic model is a residential tenancy rather than a holiday let. What replaces it is the Ley de Arrendamientos Urbanos itself: a private landlord cannot recover possession before five annual renewals, seven for a company landlord, annual increases are indexed to IRAV rather than CPI since 2024, and notice of an increase must reach the tenant 30 days before the anniversary or it is unenforceable for that year.

• Alicante buyers should treat the licence as a condition of purchase, not a detail to resolve afterwards.
• Valencia buyers should read what a five-year statutory tenancy commits them to before deciding it is the safer option.
• In both, the non-resident tax split does more to the outcome than the letting model does.
• In neither does the province’s tax code differ, so any comparison presenting tax as a difference has not checked it.

Red flag: an Alicante listing described as rental-ready without a VUT registry reference already issued for that property, and a Valencia listing marketed on holiday-let yields when the realistic model is a twelve-month tenancy.

Which income stream survives a bad year?

The net figures above land within a few hundred euros of each other, so the interesting question is not which is bigger but which one holds when conditions turn. They fail for entirely unrelated reasons, and that is the strongest argument for treating these as two asset classes rather than two locations.

Valencia’s rent is underwritten by local employment. A tenant paying €1,150 a month is paying out of a Spanish salary, so the threats are Spanish unemployment, wage stagnation and, in the worst case, a tenant who stops paying inside a statutory tenancy that is difficult to end. The compensating strength is that this demand is not discretionary: people need somewhere to live in every year of the cycle, and a city with a university, a hospital system, a port and a public administration has a floor under its tenant demand that does not depend on anybody feeling wealthy.

Alicante’s income is underwritten by discretionary travel. It fails when people decide not to take a second holiday, when an airline cuts winter capacity into Alicante-Elche, when currency moves against the source market, or when a municipality changes its position on new licences. None of those is correlated with Spanish employment, and none of them gives notice.

Shock	Effect in Valencia	Effect on the Alicante coast
Spanish recession	Direct: tenant income and rents	Indirect: mostly foreign demand
Northern European downturn	Slight	Direct: bookings and buyer demand
Currency move against sterling or the krona	None	Real, on both income and resale
Route or capacity cut at the airport	None	Immediate on short-let occupancy
Municipal licence tightening	Not applicable to residential tenancies	Can end the strategy outright
Rise in interest rates	Direct: buyer pool is mortgage-financed	Muted: a cash-heavy buyer pool

Read that table as a diversification argument rather than a ranking. An owner holding one of each has genuinely uncorrelated exposure. An owner holding two coastal apartments in different Costa Blanca towns has one exposure twice, whatever the brochures say about the towns being different.

Insider tip: stress-test both markets against a summer that does not arrive rather than against an average year. A Valencia long let signed in March is unaffected by a poor tourist season; an Alicante short-let model loses the months that carry it. Ask any agent quoting a yield in either city which months produce it, and treat a refusal to break the figure down monthly as the answer to the question.

What is each market’s supply doing?

The two cities also differ in where new stock comes from, and it affects both running costs and what you compete with on exit.

Valencia city has limited room for new build inside the established districts. Most of what trades in Eixample, Ruzafa and the historic core is refurbishment of buildings that are decades or centuries old, which has two consequences an investor should price. Older blocks carry periodic technical inspection obligations and the works those inspections generate, and the resulting derrama, a special levy voted by the community, can run to thousands of euros with no relation to the rent. On the other side, scarcity of new supply supports values, because a buyer who wants to live in central Valencia cannot buy a new building there.

The Alicante coast is the opposite. Developable land exists, new schemes complete continuously, and a resale competes against a brand-new alternative with current insulation standards and a full structural warranty period ahead of it. Running costs on that new stock are lower and more predictable; the trade is that your own resale is capped by what a new unit sells for.

For a buyer this reverses the usual assumption about which market is “safer”. Valencia’s old stock carries maintenance risk but scarcity protection. Alicante’s new stock carries low maintenance risk but supply competition. Neither is a free option and both belong in the model.

Could rent regulation reach either of them?

One risk applies to the Valencia model and not to the Alicante one, and it is worth checking rather than assuming, because it can change without any change to national law.

Spain’s housing law created a mechanism for capping rents inside designated stressed market areas, but declaring an area stressed is a decision for each autonomous community rather than for the state. The mechanism therefore exists everywhere and operates only where a regional government has chosen to use it, which is why Barcelona has caps and Madrid does not, as that comparison sets out.

The exposure is asymmetric between our two markets. A Valencia long-let is exactly the kind of tenancy the mechanism governs: were a declaration to cover the city, the rent on a new lease would be constrained, and in a stressed area the constraint attaches to the dwelling, so a buyer inherits the previous tenancy’s rent as a ceiling. An Alicante holiday let is not a residential tenancy and is not touched by rent caps at all: its regulatory risk runs entirely through licensing instead.

So confirm the Comunitat Valenciana’s current position on stressed-area declarations before you underwrite a Valencia long-let over a ten-year hold, and treat the answer as a policy position that a future regional government could change rather than as a permanent feature of the market.

Neither market currently carries a rent cap, because the Valencian Community has declared no stressed market areas under the Ley de Vivienda, unlike Catalonia. That is a regional decision rather than a permanent state, and it is renewable and reversible in both directions, which is why a model should be stress-tested against a declaration arriving mid-hold rather than assumed away. What would change first is Valencia city, where the conditions the law describes are closest to being met. Acquisition is unaffected either way: 9% ITP on a resale under €1,000,000 and 11% on the portion above under Ley 5/2025 from 1 June 2026, with 10% IVA plus 1.4% AJD on a new build. Non-resident income tax is likewise identical at 19% of net for an EU or EEA owner and 24% of gross for everyone else.

What would change this answer?

This page argues that the two markets are structurally different rather than differently priced. Three things would undercut that:

1. If you intend to let the Alicante property long-term rather than short. Then you are buying the Valencia model in a coastal location, with weaker local employment underneath it and no licence dependency. That is a legitimate strategy and this comparison largely dissolves: the relevant question becomes local tenant demand, and Valencia has more of it.
2. If a stressed-area declaration covered Valencia. The city’s long-let economics would change materially, and the diversification argument would weaken because both markets would then be regulated, differently.
3. If you are buying for your own use. Then rental mechanics are irrelevant and the choice is between a working city and a coastline, which is a question about your life rather than about your portfolio.

What does resale look like on each side?

Alicante’s 43.29% foreign-buyer share means your eventual buyer is likely to be international and paying cash, which produces a faster sale that is insulated from Spanish mortgage conditions but exposed to international sentiment and to currency.

Valencia’s buyer is likely to be Spanish and mortgage-dependent, which ties your exit to domestic lending conditions and rate cycles, but rests on a domestic economy rather than on discretionary foreign demand.

Transaction intensity favours Alicante for speed: at 25.86 deals per 1,000 residents, comparable evidence refreshes constantly and pricing is easier to defend. Valencia city has depth of its own but a narrower band of directly comparable stock in any given district.

Neither city’s demand rests on immigration policy. The property route to residency was withdrawn in 2025, and in Valencia the effect was negligible because its buyer base is domestic and northern European in roughly equal measure, with free movement covering most of the latter.

Which is easier to run from another country?

Most buyers reading this will own from abroad, and the management burden differs enough between the two models to change which one is actually worth doing.

A Valencia twelve-month tenancy is close to passive. One tenant, one contract, one annual indexation, a monthly transfer, and an agent who handles the property for a modest percentage or a flat fee. The interventions are rare and mostly administrative. The corresponding risk is concentration: with one tenant, a non-payment or a dispute is not a bad month, it is the whole year, and Spanish tenancy law is deliberately protective of the occupant.

An Alicante short let is a small business. Bookings, pricing by season, changeovers, cleaning, linen, key handover, guest communication, tourist registration returns and the platform relationship all have to happen, and they happen every week in season. Professional management absorbs it for roughly a fifth of gross, which is why the net figures earlier on this page converge despite the gross figures diverging by thirty per cent.

• Choose Valencia if you want the property to make demands of you a few times a year rather than a few times a week.
• Choose Alicante if you have a manager you trust and are comfortable paying properly for them, or if you will use the property yourself in the shoulder seasons.
• In both cases, budget the management honestly. A model that assumes self-management from another country and then quietly assumes full occupancy is describing two jobs, one of which you will not do.
• Ask what the manager’s contract actually covers, since cleaning and linen are frequently billed separately from the headline percentage.

Which suits which buyer?

Valencia suits an investor who wants stable, low-seasonality income from a domestic tenant base; a buyer content with a five-year statutory tenancy commitment; and anyone who would rather carry Spanish employment risk than international sentiment risk.

Alicante suits a buyer who wants international resale liquidity and the option of higher gross returns; an owner who will use the property themselves for part of the year; and someone prepared to treat the tourist licence as the central purchase condition.

Neither suits a buyer choosing on gross yield, because the net figures converge, or one who expects the tax treatment to differ, because it does not.

Which buyer scenarios does each suit?

Valencia suits the buyer whose income model is a long let to a resident. The city economy produces year-round tenants on annual contracts, the exit is domestic rather than dependent on foreign demand, and the letting model does not turn on a tourist registration.

Alicante suits the buyer whose model is weighted to the holiday calendar and who is prepared to hold both the Valencian tourist registration and the national NRA number that short letting has required since 2026.

Neither suits a buyer choosing on tax, because there is nothing to choose: both sit in the Valencian Community, so resale carries 9% ITP under €1,000,000 and 11% on the portion above under Ley 5/2025 from 1 June 2026, and new build carries 10% IVA plus 1.4% AJD in each. The tax point is identical, which is why this page states it once and then compares the two economies instead. The real question is which income stream you want to survive a bad year.

What to verify before you offer

1. Establish which side of the €1 million ITP threshold the purchase falls on, and whether a negotiated reduction would move it.
2. In Alicante, obtain the VUT registry reference for the exact address and verify it with the Valencian registry.
3. Read the community statutes for tourist-let restrictions and the minutes of the last two general meetings.
4. In Valencia, confirm you understand the five-year minimum term and the IRAV indexation rules before letting.
5. Model the return on the realistic letting model for that property, not the more flattering one.
6. Tax both models on your own position before comparing them at all, the gross basis outside the EU penalises the higher-turnover coastal strategy hardest, which is the reverse of the intuition.
7. Establish whether the purchase is a resale under ITP or a first transfer at 10% IVA plus 1.4% AJD.
8. Retain independent counsel before the reservation, and in Valencia have them review any tenancy already in place, since you inherit its remaining statutory term along with the property.

The regional tax detail is in the Valencian ITP guide, the coastal market in the Costa Blanca investment guide, and the city in our Valencia analysis. Landlord obligations are covered in the Spanish rental law guide.

Frequently Asked Questions

Do Valencia and Alicante have different property taxes? +

No. Both are in the Comunitat Valenciana: resale at 9% ITP below €1 million and 11% on the portion above, under Ley 5/2025 from 1 June 2026, and new build at 10% IVA plus 1.4% AJD. On a €400,000 resale the ITP is €36,000 in either province.

Which produces the better yield? +

The gross figures differ by around 30% in Alicante's favour on a licensed short let, but the net figures converge once management, community charges and tax are applied. What differs is the risk: Valencia depends on a tenant staying employed, Alicante on a licence remaining valid and a season performing.

Why does Alicante have such a high foreign-buyer share? +

It recorded 43.29% across 53,385 residential transactions in 2025, the highest of any Spanish province, at 25.86 transactions per 1,000 inhabitants. The concentration reflects decades of second-home demand along the coast from Dénia to Torrevieja, and it is what makes resale there fast and internationally driven.

Is a tourist licence needed in Valencia city? +

For a holiday let, yes, but the realistic model in the city is a twelve-month residential tenancy, where the binding framework is the Ley de Arrendamientos Urbanos instead: five annual renewals a private landlord cannot cut short, IRAV indexation since 2024, and 30 days' notice before the anniversary for any increase.

Which is safer for resale? +

They carry different exposures. Alicante's international cash buyers insulate you from Spanish mortgage conditions but expose you to international sentiment and currency. Valencia's domestic buyers tie your exit to Spanish lending but rest on a working city economy rather than discretionary foreign demand.