Madrid announces housing tax cuts for residents under 40

The Community of Madrid has announced tax reductions aimed at helping individuals under the age of 40 purchase homes. Regional President Isabel Díaz Ayuso stated that the Property Transfer Tax (ITP) for second-hand homes will decrease from 6% to a reduced rate of 4%, provided the property price does not exceed 450,000 euros and serves as the buyer's primary residence.

Additionally, the tax on Documented Legal Acts (AJD) for new construction properties will be lowered from 0.75% to 0.4%. The regional government estimates these combined measures will result in an annual savings of approximately 116 million euros for taxpayers.

Of this total, the ITP reduction is expected to benefit roughly 40,000 young people, with an average saving of 2,850 euros per person. The AJD reduction is projected to provide 2.1 million euros in annual savings for approximately 4,200 people. These measures are intended to be included in the 2027 regional budget project, with an aim to take effect on January 1.