VAT and stamp duty on a new home in Spain

Why a new home is not taxed like a resale

Spain taxes the two cases differently. When a developer or other business sells a home, that sale is a supply of goods subject to VAT, and article 7.5 of the national transfer-tax text takes it out of the property transfer tax (ITP). So you pay VAT instead of ITP. You then pay AJD because the deed is a notarial document with a value that can be registered. For the resale case, see the ITP guide.

VAT, like the Civil Code, is a national tax: the rates below apply in every common-regime region, and in Navarre and the Basque Country, whose agreements with the State apply the same VAT rules. The Canary Islands (IGIC, see the Canary Islands guide) and Ceuta and Melilla (a local tax, IPSI) are the exceptions. In Melilla, annex 1 of the city’s IPSI ordinance (BOME of 4 May 2021) taxes the delivery of real estate at 4%, and the first transfer of protected housing (VPO) by its developer at 0.5%; later notices in the bulletin still refer to that decree, but a later change cannot be ruled out. Ceuta’s rate on a new home was not found in an official source for this guide.

VAT rates on housing

Article 91.Uno.1.7º applies the 10% rate to buildings or parts of buildings fit for use as homes, including garage spaces up to a maximum of two units, and annexes sold together with them. Business premises are not annexes for this purpose.

Article 91.Dos.1.6º applies 4% to homes officially classified as protección oficial de régimen especial (special-regime subsidised housing) or promoción pública (public-sector housing), and to protected housing with permanent classification, when the developer delivers them. Garage spaces count up to two units. An ordinary new home, however expensive, is at 10%.

The October 2026 change

Real Decreto-ley 29/2026 of 6 October 2026 amends article 91 “with effect from 1 December 2026” in the points Uno.2.2º, Uno.2.10º and Dos.1.6º. Dos.1.6º is the 4% protected-housing rule; on the Payotte phase-0 reading of the new text, it keeps the 4% for the same homes. Article 91.Uno.1.7º, the 10% on homes, is not amended. As of 15 October 2026 the decree-law was still within its period for ratification by Congress. An earlier decree-law with the same VAT content, RDL 26/2026, was repealed by Congress on 2 October 2026. Treat any further change as proposed until it is published.

Stamp duty (AJD) by region

AJD on the deed is set by article 31.2 of the national text at a rate the region approves, with 0.5% as the fallback. The taxpayer is the buyer (article 29), except on a mortgage deed (see AJD on mortgages). These are the general rates for a new home bought by an individual; reduced rates for a main home or young buyers exist in many regions.

Navarre charges 1% where the seller waived a VAT exemption. The main-home rates for Cantabria, Galicia and Valencia depend on conditions in each region’s own law. The Basque Country row follows the regulations of the three provinces.

Madrid’s scale and how the smoothing works

In Madrid, article 32 gives an individual buying a home 0.4% if the value is €120,000 or less, 0.5% from €120,001 to €180,000 and 0.75% above €180,000. Article 37 prevents a cliff: if a higher base produces an increase in tax larger than the increase in base, the tax is cut by the excess. Calculation: at the 0.75% rate, a €250,000 home pays €1,875. Just above a threshold the smoothing limits the step: at €180,001 the plain 0.75% would give about €1,350, but the tax rises from €900 at €180,000 by no more than the €1 added to the base, so it is €901.

Which professional to consult

A lawyer registered with a Spanish bar association (colegio de abogados), see property lawyer, can check the developer’s invoice, the VAT rate and any reduced AJD. The notary who signs the deed states the value that is taxed.