Buying a Car in Spain: Taxes, Incentives and Deductions Explained (2025)

Updated for 2025: Understand the taxes and potential deductions when buying a car in Spain, from VAT and registration tax to eco-incentives, new MOVES subsidies, deductions for charging stations, and changes affecting both expats and residents.

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 here in 2025 comes with more than just the sticker price. This is especially true if you're navigating the car registration process in Spain for the first time. Below is a clear breakdown of the key taxes, costs, incentives, and deductions you should know about when buying a car in Spain in 2025.

1. VAT (IVA) and Patrimonial Transfer Tax

VAT on new vehicles

• New cars: VAT (IVA) of 21% applies and is included in the dealership’s price. Certain vehicles for disabled drivers or large families may qualify for a reduced VAT rate as low as 4%.

Transfer Tax (ITP) on used vehicles

• Used cars: Transfer Tax (ITP) applies, usually 4% to 8% depending on the region, assessed on book or sale value (whichever is higher). Some regions, such as Catalonia, may exempt cars over 10 years old.

2. Registration Tax (IEDMT)

How IEDMT is calculated

This is a one-time tax based on the official CO₂ emissions of your vehicle — widely referred to as the vehicle registration tax in Spain:

• 0–120 g/km = 0% (eco-efficient and electric vehicles pay zero)
• 121–159 g/km = 4.75%
• 160–199 g/km = 9.75%
• 200 g/km or more = 14.75%

Exemptions and reductions

• Electric vehicles (EVs)
• Certain hybrids depending on emissions
• Adapted vehicles for disabled drivers
• Relocation exemption when moving to Spain with a pre-owned car

3. Import Duties and Moving to Spain with a Car

Importing a car from outside the EU

• From outside the EU: 10% import duty plus 21% VAT typically applies. These importing-a-car-to-Spain costs may increase if extra homologation or documentation is required.

Bringing a car from the EU

• EU origin: No import duty if the vehicle was already taxed within the EU. VAT may still apply if the car is considered “new” (under 6 months or under 6,000 km).

Relocation exemptions

• Some exemptions exist for residents relocating with a pre-owned vehicle; check IEDMT exemption conditions.

4. MOVES III Subsidy and Extended EV Deductions

MOVES III purchase incentives

Spain’s MOVES III program — the central incentive for electric vehicle purchases — remains active through 31 December 2025. These Spain electric car subsidies in 2025 include:

• Up to €7,000 for new electric cars under €45,000
• Up to €5,000 for plug-in hybrids (depending on electric range)
• Up to €9,000 for commercial EVs
• Used EVs (under 12 months) may qualify if they meet MOVES III 2025 requirements

New 2025 EV tax deduction

New for 2025: A 15% IRPF deduction applies to one eligible EV per taxpayer, up to a base of €20,000. The deduction applies the year you register the car or pay at least 25% of its value.

5. Deductions for EV Charging Point Installations

Tax deductions for home charging

Install a home charging point and deduct 15% of installation costs (up to €4,000 annually). Works must be completed by the end of 2025.

MOVES III charging incentives

• 70% of costs for individuals
• 55% for SMEs

6. VAT Deductions for Self-Employed and Companies

Self-employed VAT rules

• Self-employed: Deduct 50% of VAT if the car is partly used for business; 100% if used exclusively for professional activity (e.g., taxis, rental, driving schools).

Incentives for company fleets

• Companies: Eligible for additional MOVES incentives, especially for fleet electrification.

7. Annual Road Tax (IVTM)

How IVTM is calculated

This annual municipal tax is based on fiscal horsepower and emissions. Rates can range from €22 up to €224+ in major cities. Many municipalities offer up to a 75% discount for EVs.

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

New cars are exempt for 4 years, then inspected every 2 years until the 10th year, then annually.

ITV for imported vehicles

ITV is required for all imported vehicles — even newly registered ones.

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

9. Eco and Scrappage Incentives

Regional eco-incentives

• “Plan Renove” programs vary by region
• Incentives can be combined with MOVES III
• Some eco-bonuses cover low-emission cars, e-motorcycles, and mobility vehicles

10. Buying Tips and Additional Costs

Additional purchase considerations

• Budget for gestor/legal paperwork (€150–€400), plates, translations, and homologation (for imports)
• Comprehensive insurance is mandatory before driving
• If financing, confirm whether subsidies still apply
• IEDMT is generally due before registration — late filing leads to fines

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

FAQs About Car Taxes and Deductions in Spain (2025)

How much tax do you pay when buying a car in Spain?

For new cars, you pay 21% VAT (IVA). For used cars bought from a private seller, you pay Transfer Tax (ITP), typically 4% to 8% depending on the region.

Do electric cars pay registration tax (IEDMT) in Spain?

No. Fully electric vehicles pay 0% IEDMT. Many hybrids also receive reduced rates depending on CO₂ emissions.

What is the MOVES III subsidy and who can apply?

MOVES III runs until 31 December 2025 and offers grants for EVs, plug-in hybrids, and charging infrastructure. Individuals, businesses, and autónomos may apply.

Can expats bring a car to Spain without paying import taxes?

Yes — if they meet relocation exemption rules. Exemptions apply to certain vehicles owned abroad prior to moving to Spain.

Is it cheaper to buy a used car in Spain or import one?

It depends on the origin, emissions, and required paperwork. Imports often involve additional costs such as ITV, homologation, and taxes.

Can self-employed people deduct car expenses in Spain?

Yes. Autónomos can deduct VAT and some expenses, depending on whether the vehicle is used partly or exclusively for business.

Are there tax deductions for installing an EV home charging point?

Yes. Homeowners can deduct 15% of installation costs (up to €4,000) through 2025. MOVES III may cover up to 70% of costs.

Do cars imported into Spain need an ITV?

Yes. All imported vehicles must undergo an ITV inspection, even new ones.

Is IVTM cheaper for electric vehicles?

In many municipalities, EVs receive discounts of up to 75% on annual road tax.

Do all regions of Spain offer the same incentives?

No. Incentives, ITP rates, and eco-bonuses vary by autonomous community. Always check regional rules.

Summary for 2025

Spain continues to boost support for electric vehicles and low-emission mobility. Tax breaks, MOVES III grants, and IVTM reductions can significantly reduce the cost of switching to cleaner transport. Always verify regional updates with your dealership or gestor.

Protect Yourself on the Road

Driving in Spain? Make sure you’re fully protected. The Sanitas Top Quantum plan includes comprehensive traffic accident cover — essential peace of mind for every driver on Spanish roads.