VAT VS. TRANSFER TAX (ITP): UNDERSTANDING PROPERTY TAXES WHEN BUYING IN SPAIN

Understanding Spanish property taxation is vital when planning your acquisition budget. Taxes differ completely depending on whether you purchase a brand-new development from a developer or an existing resale home from an individual. Here is an exact comparative analysis.

1. NEW BUILD HOMES: VAT (IVA) + STAMP DUTY (AJD)

When purchasing directly from a developer or builder:

• Value Added Tax (IVA): Flat 10% on the deeded purchase price (4% for subsidised social housing). Attached garage spaces (up to 2) also pay 10%.
• Stamp Duty (AJD): 1.2% in Andalusia.
• Total Direct Tax Burden: ~11.2% of the purchase price.

2. RESALE HOMES: PROPERTY TRANSFER TAX (ITP)

When purchasing from a private seller or for second and subsequent transmissions:

• Property Transfer Tax (ITP): Andalusia applies a flat 7% rate across the board.
• Stamp Duty (AJD): Exempt. Resale transactions subject to ITP do not pay Stamp Duty.