26 August 2026

Buying New vs. Resale in Spain: VAT/AJD vs. Transfer Tax Explained for American Buyers

In Spain, resale and new-build properties are taxed differently. Resale purchases pay ITP (transfer tax), a flat 7% in Andalucía. New-build purchases from a developer pay VAT at 10% for residential property plus roughly 1.2% AJD stamp duty, for a combined rate near 11.2% (rates as of July 2026). That four-point gap is real money, and American buyers should build it into their budget comparison from day one.

A note before you dive in: immigration and tax rules shift — sometimes quickly. What follows reflects our latest research, but you should always confirm the current specifics with a licensed advisor before acting on them.

Picture a new-build apartment in a Costa del Sol development, priced against a resale villa a few streets over, similar size, similar setting. The tax line alone can separate the two by €20,000 to €25,000 on a €600,000 purchase. That's not a rounding error to sort out later at the notary's office. Here's how each tax actually works, why the gap exists, and how to weigh it in your decision.

The Short Version: Two Different Tax Regimes

Spain doesn't have one flat "property purchase tax." Which one you owe comes down to a single question: has this property ever been sold before?

• Resale property — anything with at least one prior owner, which covers the vast majority of Costa del Sol listings — falls under ITP, a regional transfer tax.
• New-build property — bought straight from a developer, never previously owned — falls under VAT, plus a smaller stamp duty called AJD.

This isn't something you or the seller get to pick. The legal status of the property decides it. Knowing which bucket your target property sits in is step one of an accurate budget.

Resale Property: ITP at a Flat 7%

Buy a previously-owned villa, apartment, or townhouse in Andalucía — which is to say, most of what's actually listed on the Costa del Sol — and you'll pay ITP.

Until 2021, Andalucía ran a progressive scale that climbed through 8%, 9%, and 10% brackets as the price rose. Under Ley 5/2021, the region replaced that with a single flat rate: 7%, regardless of price, as of July 2026, according to the Junta de Andalucía. It was a deliberate move to simplify the system and make the region more competitive, and for buyers it's genuinely one of the friendlier parts of purchasing here compared with some other Spanish regions.

A few things worth knowing about how ITP actually plays out. The buyer always pays it; Spanish law doesn't leave room to negotiate that with the seller. Your lawyer or gestor (a licensed administrative agent) will typically file it on your behalf via Modelo 600, a specific tax form, within a set deadline after you sign the deed. And the tax base isn't simply what you agreed to pay: ITP is calculated on whichever is higher, the actual sale price or the official cadastral reference value set by Spain's land registry authorities. Most of the time those two numbers are close. When they're not, and the reference value comes in above your negotiated price, you're taxed on the higher figure. It's a detail that catches people off guard, so ask your lawyer to check the reference value for your specific property before you lock in a budget.

One caveat that matters specifically for American buyers: reduced ITP rates of 6% or 3.5% do exist in Andalucía, but they're carved out for narrow categories — buyers under 35 purchasing a sole habitual residence under €150,000, large families, buyers with disabilities, or purchases in officially depopulated municipalities. If you're American and buying a second home, a holiday property, or an investment property on the coast, none of that will typically apply to you. Plan around the standard flat 7%.

New-Build Property: VAT Plus AJD

Buy directly from a developer instead — a brand-new apartment in a coastal development that's never had an owner — and the tax picture changes completely. New-build purchases are exempt from ITP and fall under Spain's VAT system.

Residential property carries a 10% VAT (IVA) rate, as of July 2026. (Land and commercial property sit at the higher 21% general VAT rate, also as of July 2026, but that's not the usual case for an American buyer purchasing a home.) On top of VAT, you also owe AJD, a stamp duty on the notarized purchase deed, at a general rate of roughly 1.2% in Andalucía, as of July 2026.

Add it up: roughly 10% plus 1.2%, close to 11.2% of the purchase price on a typical new-build residential buy. That's noticeably more than the flat 7% ITP rate on a comparable resale.

A reduced AJD rate, around 0.3%, exists for the same narrow buyer categories mentioned above, and for the same reason it generally won't apply to an American buying a second home or investment property on the Costa del Sol.

Side-by-Side Comparison

| | Resale Property | New-Build Property | |---|---|---| | Tax type | ITP (transfer tax) | VAT (IVA) + AJD (stamp duty) | | Rate | Flat 7% (Andalucía) | 10% VAT (residential) + ~1.2% AJD ≈ 11.2% combined | | Who pays | Buyer | Buyer | | Tax base | Higher of sale price or cadastral reference value | Sale price (as agreed with developer) | | Reduced rates for typical US buyers? | No (reduced rates limited to specific local categories) | No (reduced AJD limited to specific local categories) | | Filed via | Modelo 600 | VAT paid to developer; AJD self-assessed |

Rates shown as of July 2026. Tax rules can move faster than blog posts do, so confirm current figures with your advisor before signing anything.

An Illustrative Example (Hypothetical Numbers Only)

Let's make this concrete with a round, hypothetical price. This isn't a real transaction — actual figures for any specific property will differ — but it shows the scale of the gap.

Hypothetical property price: €600,000

• Resale scenario: ITP at 7% flat → roughly €42,000 in transfer tax.
• New-build scenario: VAT at 10% → roughly €60,000, plus AJD at about 1.2% → roughly €7,200 — a combined €60,000–€67,000 in VAT and AJD together.

That's a gap of roughly €18,000–€25,000 in tax alone between an otherwise comparable resale and new-build property at this price point, before notary, registry, or legal fees are even added.

One thing to keep in mind: this example assumes €600,000 is also the tax base. In a real resale purchase, if the cadastral reference value for the specific property comes in higher than the agreed price, the ITP bill gets calculated on that higher figure instead. Another reason to have your lawyer check the reference value early in the process, not after you've already signed.

It's Not Just About Tax — But Tax Is a Real Factor

Beyond the tax line, new-build and resale properties tend to differ in character, not just cost.

New-builds usually come with builder warranties and need less immediate upkeep. Plumbing, wiring, roofing: all new, all under guarantee, at least for a while.

Resale properties, especially the older Costa del Sol villas, often carry the things a new development simply can't replicate: mature gardens, larger plots, a more established or central location. The trade-off is more due-diligence work, particularly around past renovations or extensions that may not have been properly licensed. We cover that in detail in our guide to property due diligence and clear title in Spain.

Neither path is objectively better. They're different trades: cost and warranty coverage on one side, character and land on the other. What the tax gap means is that a new-build and a resale property at the same headline price aren't actually the same investment, and comparing two listings on price alone leaves out a real piece of the picture.

Other Costs to Budget On Top of ITP or VAT+AJD

ITP or VAT+AJD isn't the whole closing bill, whichever path you take. Budget for notary fees to draft and formalize the purchase deed, land registry fees to register your ownership, and legal fees for your own independent lawyer's review of the contract, title searches, and representation at signing.

These vary by transaction size and by which notary, registry, and law firm you use, so we won't pretend there's one universal "all-in" percentage. As a rule of thumb, plan to add a few extra points on top of the headline tax rate (7% for resale, roughly 11.2% for new-build) to land on a realistic total closing-cost estimate. For the ongoing taxes that follow after you've closed, as opposed to the one-time purchase taxes covered here, see our companion guide on property taxes in Spain for American owners.

How to Use This in Your Budget Comparison

If you're weighing a new-build against a resale property on the Costa del Sol, here's how to fold this into the decision:

1. Confirm which regime applies. Ask your lawyer whether the specific property is legally a "resale" (ITP) or a "new-build never previously owned" (VAT + AJD) — it isn't always obvious just from how a listing is marketed.
2. Check the cadastral reference value early, especially on resale purchases, so you know your real tax base before you're mid-negotiation.
3. Add the right tax rate to your comparison spreadsheet — 7% for resale, roughly 11.2% for new-build — so you're comparing landed cost, not just list price.
4. Layer in a few extra points for notary, registry, and legal fees on either path.
5. Weigh tax alongside condition, warranty coverage, location, and due-diligence risk — not as the only factor — as covered in our guides on how to buy property in Spain as an American citizen and common mistakes Americans make buying property in Spain.

A Note From Luumare Estate

Tax treatment is one of the clearest, most quantifiable differences between buying new and buying resale on the Costa del Sol, and it's exactly the kind of detail that's easy to miss when you're comparing listings from a distance. At Luumare Estate, we run this comparison properly for the specific properties our clients are considering, working alongside independent legal counsel so the numbers you budget reflect reality, not assumptions. Our concierge service, outlined on our services page, also includes referrals to trusted cross-border tax advisors and gestores who work specifically with American clients on exactly this kind of calculation.

If you're comparing new-build and resale options on the Costa del Sol and want a clear-eyed look at the true all-in cost of each, reach out. We're happy to walk through your shortlist and help you budget with confidence.