Note
New build or resale: VAT versus ITP in Spain
Quick answer
A first sale by the developer carries VAT plus stamp duty on the deed, and a home sold by an earlier owner carries the regional transfer tax. Compare the full tax on each route in your region, with the same assumptions, and then compare the guarantees and costs too.
Applies toBuyers choosing between a new home and a resale. Buyers in the Canary Islands should read the IGIC page for the equivalent comparison.
On this page: 8 sections
§ 1The dividing line
The tax agency draws the line between the two routes. A first sale of a new home by the developer carries VAT. A home sold by an earlier owner carries the regional transfer tax, ITP. Two different taxes, with different bases and different rates, apply to purchases that look similar from the buyer's side. The wider chapter is new-build tax overview.
§ 2What a new build pays
VAT on housing from a developer is 10%, added to the price. The notarial deed also carries AJD, at the rate the region sets, as explained in the deed tax (AJD). The two together are the tax on the purchase, and you should ask for each to be stated in the developer's quote.
§ 3What a resale pays
A resale carries the transfer tax of the region where the home stands. In Madrid, for example, the general rate is 6%, and other regions differ, as the chapter on ITP shows. The tax base is the higher of the official reference value and the price, so it can exceed the price on the contract.
§ 4How to compare fairly
Comparing 10% with a transfer tax rate is not a fair comparison, because the tax is only one part of the difference. The price per metre differs, the guarantees differ, the costs of set-up differ and the timetable differs. A fair comparison puts each home on one sheet: price, taxes, fees, work needed, date of use and protections. Only then does the tax difference show its true size.
§ 5The deed tax on both sides
A buyer comparing the routes should remember that AJD appears on the new-build side, and that the transfer tax appears on the resale side. Leaving AJD out of the new-build total makes the new build look cheaper than it is. Ask your adviser to calculate both on the same basis, and to check the base.
§ 6The Canary Islands
In the islands, the indirect tax on a new home is IGIC. The comparison there is between IGIC and the Canarian transfer tax, and the reasoning is the same. We explain what we have verified in IGIC instead of VAT.
§ 7Where the regional rates are
The deed tax rates we have verified are collected in regional stamp duty, and the transfer tax rates are in the ITP section. Use both tables for the same region when you compare the two routes.
§ 8A short checklist
Before you choose, write down the type of home, the region, the price, the tax that applies, the rate and the base. Ask the seller to confirm the tax in writing. Ask your adviser to calculate the total. Compare the guarantees and the costs, not only the taxes. Then decide which route suits your plans, and keep the sheet with your file.
If your plans change while you are comparing, redo the sheet. A new rate, a different price or a different region changes the answer, and the sheet is cheap to update.
FAQRelated questions
Which tax applies to my purchase?
It turns on who is selling to you. The seller should be able to say which tax the sale carries and to put it in writing. If the answer is unclear, ask your adviser before you reserve, because the budget depends on it.
Is VAT always cheaper or dearer than transfer tax?
There is no general rule. VAT has one national rate for housing, and the transfer tax varies by region. The prices differ too. Compare the whole tax bill on each home in the same region, using the same assumptions.
Do I pay stamp duty on a resale?
On a resale the main tax is the transfer tax. AJD applies to deeds that are not subject to the main transfer tax, which is why it appears on a new build. Ask your adviser to check how it works on your deed.
Sources
- Boletín Oficial del Estado: Texto refundido de la Ley del Impuesto sobre Transmisiones Patrimoniales y Actos Jurídicos Documentados (RDLeg 1/1993) (official source, opens in a new window), Arts. 30 and 31: AJD base and default rateLast checked 17 October 2026
- Boletín Oficial del Estado: Ley 11/2021 de prevención y lucha contra el fraude fiscal (BOE-A-2021-11473) (official source, opens in a new window), Reference value as ITP tax baseLast checked 17 October 2026
- Comunidad de Madrid: Transmisiones Patrimoniales Onerosas (official source, opens in a new window), Rates, bonuses and valuation ruleLast checked 17 October 2026
- Agencia Tributaria: Compro una vivienda: ¿tengo que pagar IVA o ITP? (official source, opens in a new window), Calificación IVA / ITPLast checked 17 October 2026
Tax note. Rates depend on the region, the type of property and the buyer, and they change. Figures here are dated and sourced; examples are illustrative and show their assumptions. Confirm yours with the regional tax agency or a tax adviser.