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 comes with more than just the sticker price. Here’s a breakdown of the key taxes, costs, incentives, 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. Note: Certain vehicles for disabled drivers or large families might be eligible for reduced VAT (down to 4% in qualifying cases).
• Used cars: Transfer Tax (ITP) applies, usually 4% to 8% depending on the region, assessed on book or sale value (whichever is higher). Regions like Cataluña may exempt cars over 10 years old.

2. Registration Tax (IEDMT)

This is a one-time tax based on the official CO₂ emissions of your new vehicle:

• Up to 120 g/km: 0% (eco-efficient and fully electric cars in this range pay zero)
• 121–159 g/km: 4.75%
• 160–199 g/km: 9.75%
• 200+ g/km: 14.75%

Certain hybrids, electric, and adapted vehicles may be fully or partially exempt; always verify current rates for your situation.

3. Import Duties and Moving to Spain with a Car

• From outside the EU: 10% import duty plus 21% VAT typically applies, even if the car is used. Extra documentation required for registration.
• EU origin: No import duty if already taxed within the EU, but VAT may be due on “new” cars (less than 6,000 km or under 6 months old). If relocating and importing your own vehicle, some exemptions apply for long-term ownership or specific circumstances.
• Always check IEDMT liability—exemptions may apply for residents relocating with a pre-owned car.

4. MOVES III Subsidy and Extended EV Deductions

Spain’s MOVES III incentive program is now extended through December 31, 2025:

• Subsidies up to €7,000 for new electric cars under €45,000 (plus up to €1,000 extra for low-income buyers or scrapping an old car)
• Up to €5,000 for plug-in hybrids (depending on range) and €9,000 for commercial EVs
• Purchases are retroactively eligible from January 1, 2025
• Used EVs under 12 months old may also qualify

New for 2025: The 15% personal income tax (IRPF) deduction is available for one eligible EV per taxpayer if purchased (or down payment of at least 25% made) before December 31, 2025, up to a base of €20,000 (excluding subsidies). The deduction applies in the year you register or when 25% of the cost is paid, giving buyers more time to finalize purchases.

5. Deductions for EV Charging Point Installations

Install a charging point at home or in a private community and you may deduct 15% of the cost (up to €4,000 annually). Installations must be finished by the end of 2025 and not used for economic activities. The MOVES III program also covers up to 70% of eligible costs for individuals and up to 55% for SMEs, depending on installation type and region.

6. VAT Deductions for Self-Employed and Companies

• Self-employed: Can deduct 50% of VAT if the car is used partly for business, provided the vehicle is also personally registered. 100% VAT deduction is possible for cars used exclusively for professional purposes (e.g., taxis, rentals, driving schools).
• Companies: Eligible for additional MOVES incentives, especially for fleets and larger charging installations.

7. Annual Road Tax (IVTM)

This annual tax is set by your local municipality, based on fiscal horsepower and emissions. In major cities, rates range from around €22 up to €224+, with large SUVs or performance vehicles paying the most. Importantly, BEVs are eligible for up to a 75% discount in many municipalities, though local rules vary. Always confirm with your town hall for current tariffs and discounts.

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

8. ITV (Technical Vehicle Inspection)

New cars are exempt from their first vehicle inspection for four years. After this, you will need inspection every two years up to the 10th year, then annually. ITV is required for all imported cars, even if newly registered (read: Can I Get A Spanish ITV For My British Car?). Costs and wait times vary by province. EVs follow the same inspection schedule.

9. Eco and Scrappage Incentives

• Regional or municipal “Plan Renove” programs may offer additional incentives for scrapping old, high-emission vehicles.
• Grants can be combined with national MOVES III subsidies for maximum savings when switching to EVs or cleaner vehicles.
• Eco-bonuses may cover part of the cost of low-emission cars, e-motorcycles, or urban mobility options in some locations.

10. Buying Tips and Additional Costs

• Budget for gestor/legal paperwork (€150–€400), license plates, registration services, and, for imports, translation and homologation fees.
• Comprehensive insurance is not included in sale or registration price and is required before driving your new vehicle.
• If financing, confirm if deductions or subsidies can still be claimed, as sometimes car loans include bundled agreements.
• Check deadline for registration and payment of IEDMT (generally due before registration at DGT); late filing results in 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

Summary for 2025: Spain continues to expand its support for electric vehicles and sustainable mobility, with generous tax breaks and direct grants. Local IVTM tax and registration rules may offer further discounts, but buyers need to check details regionally. Always confirm directly with your dealership, town hall, or a gestor about the latest updates, deadlines, and documentation for your specific region and vehicle.

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