IVA and AJD: Taxes on New-Build Property in Spain

IVA vs ITP: which applies to you?

The key distinction:

• Second-hand property (resale from a private owner) → ITP applies
• New-build from a developer (primera transmisión) → IVA + AJD applies
• Plot of land → IVA + AJD applies

IVA (VAT) on new builds

The standard IVA rate for residential new builds in Spain is 10%. This is a national rate — the same everywhere in Spain. Land and commercial properties pay the full 21% IVA rate.

IVA is collected by the developer and paid to Hacienda. As the buyer, you simply pay the total price including IVA.

AJD (Stamp Duty)

AJD (Actos Jurídicos Documentados) is the stamp duty charged on notarised documents. It applies when:

• Buying a new-build property (alongside IVA)
• Refinancing a mortgage
• Creating or modifying a mortgage

In the Balearic Islands, the AJD rate for new residential property is 1.5% of the purchase price.

Example: New build apartment, €500,000

• IVA: €500,000 × 10% = €50,000
• AJD: €500,000 × 1.5% = €7,500
• Total taxes: €57,500

Plus notary fees (typically €1,000–€2,000) and Land Registry fees (€500–€1,000).

Can IVA be reclaimed?

Not for a private residential purchase. If you are buying through a company or the property is exclusively for business use (e.g. commercial rental), IVA may be recoverable. For personal holiday home purchases, it is not.

New builds and Modelo 210

Once you own a new-build property, the same Modelo 210 rules apply as for any non-resident property owner. You will owe annual non-resident income tax on the property from the year of purchase.