New build or resale: the tax changes completely, and the brochure never mentions it
Two identical-looking Spanish properties, same price, same street — and a different tax bill, because of a distinction most buyers never ask about: who is actually selling it to you.
Pedro Torres5 min read
You've already read the article on this blog about Spain's property purchase tax. You budgeted for it. Then your agent mentions the property you've fallen for is a new build, straight from the developer — and the tax you planned for doesn't apply to it at all.
That's not an error, and it isn't a discount either. New builds and resales sit under two completely different tax regimes in Spain. Mixing them up doesn't just cost you a few hundred pounds — it can throw your whole completion-day budget off.
Who sells it to you decides which tax applies — not the price, not the location
A property bought directly from its developer, the first time it is sold after construction or a full renovation, is a "first delivery," subject to VAT (IVA) at the reduced rate for housing. Every resale after that — a second owner selling to a third, a third to a fourth — is a "second or later delivery," and those are specifically exempt from VAT. They fall under transfer tax (ITP) instead.
It's not about how old the building is. A new-build apartment bought from someone who already lived in it for a year is a resale, taxed under ITP, same as a 1960s townhouse.
VAT doesn't replace every tax on the deed — it only replaces one
This is the part that catches people out. VAT and ITP's transfer-tax concept are mutually exclusive — you never pay both on the same sale. But there's a second, separate tax on the notarial deed itself: stamp duty (AJD). ITP exempts a VAT-subject sale from the transfer-tax concept, but it does not exempt it from AJD. A new-build purchase pays VAT and AJD. A resale pays ITP only, no AJD on top.
Both taxes are calculated as a percentage of the price, and both rates are set regionally — they vary by Autonomous Community, so the exact figure depends on where in Spain you're buying, not on these national rules alone.
| New build (first delivery) | Resale (second delivery onward) | |
|---|---|---|
| Main tax | VAT (IVA), reduced rate for housing | Transfer tax (ITP) |
| Also pays | Stamp duty (AJD), on top of VAT | Nothing extra — ITP is the only one |
| Who it falls on | Same as any VAT purchase | The buyer, built into completion costs |
Base legal: Ley 37/1992, arts. 91.Uno.1.7º y 20.Uno.22º.A; RDL 1/1993, arts. 7.5 y 31.2.
Why this matters before you fall in love with a specific property
The two regimes can land at noticeably different totals depending on the region's rates, and VAT purchases carry an extra line item (AJD) that resales don't. If you're comparing a new-build and a resale side by side on price alone, you're not comparing like with like — the tax line changes the real cost of each one, sometimes enough to change which is actually the better deal.
Do I pay VAT or transfer tax when buying property in Spain?
VAT, if you're buying directly from the developer the first time the property is sold after construction. Transfer tax (ITP), for every resale after that — regardless of how new the building is.
Does VAT replace all other property taxes on a new build?
No. VAT replaces only the transfer-tax part of ITP. Stamp duty (AJD) still applies on top of VAT for a new-build purchase — a resale pays ITP only, with no AJD added.
Is a resold new-build apartment taxed the same as a brand new one?
No. What matters is whether this is the first sale after construction (VAT) or a later resale (ITP) — not how recently the building itself was built.