New Build Property in Spain: Taxes, Guarantees and Steps (2026)

What VAT do you pay on a new build home in Spain?

A new build home that you buy directly from the developer is taxed at 10% IVA (art. 91.Uno.1.7.º of Ley 37/1992, the Spanish VAT Act). The rate applies to the price of the home and also covers a maximum of two garage spaces and annexes, such as a storage room (trastero), provided they are transferred together with the home. It makes no difference whether the home will be your residence, a second home or a buy-to-let investment: the IVA on the home does not depend on how you use it or where you live. A new second home also pays 10%.

Anything outside that package is taxed at the standard rate of 21% (art. 90.Uno LIVA). That applies to a garage or storage room you buy separately, to a third garage space and to any commercial unit, which the law expressly excludes as an annex even if it is sold together with the home. The law speaks of annexes “transferred together”, so the practical way to secure 10% is for the garage and storage room to be in the same contract and the same deed as the home. If the garage is in a different property, ask before you sign: the Agencia Tributaria refers to garages located in the building.

There is a super-reduced rate of 4%, but only for special-regime or publicly promoted officially protected housing (VPO) sold by its developer, with up to two garages and annexes in the same building (art. 91.Dos.1.6.º LIVA). Beyond that, there is no age-based reduced IVA rate — not for under-35s, not for older buyers, not for large families and not for disability. The benefits for young buyers you read about in the news are regional and apply to ITP, the resale tax, not to IVA on new builds.

Two caveats. In the Canary Islands, Ceuta and Melilla IVA does not apply (art. 3 LIVA): there you pay IGIC and IPSI, with their own rates, which this guide does not cover. And if you later renovate the newly delivered home, the renovation work does not qualify for the 10% that applies to renovating homes completed at least two years earlier, so it goes to 21% (art. 91.Uno.2.10.º LIVA).

New build: IVA or ITP? It depends on who is selling

“New builds pay IVA and resales pay ITP” is almost always right, but the legal test is different: IVA applies to the first delivery of a finished building, which is the one made by the developer (art. 20.Uno.22.º A of the VAT Act). Second and later deliveries are exempt from IVA and are therefore subject to Transfer Tax, ITP (art. 4.Cuatro LIVA and art. 7.5 of the Texto Refundido del ITPAJD).

The most common case on the Costa Blanca is the new home resold by a private individual who bought it off plan and never used it. For tax purposes this is a second delivery by a seller who is not a business, so you pay ITP and not IVA; in the Comunitat Valenciana, 9% for purchases from 1 June 2026, and 11% on the whole value if it exceeds one million euros (art. 13.Uno of Ley 13/1997). The taxable base is the higher of the price and the Catastro reference value (art. 10 TRLITPAJD). If the seller is a non-resident individual, you will also have to withhold 3% of the price (art. 25.2 of the Texto Refundido del IRNR), something that never happens when you buy from a Spanish developer.

The second case is a developer that has rented the home out. Its sale stops being a first delivery if the home has been used without interruption for two years or more by the owner, by holders of a right of use or by tenants without a purchase option. If the letting lasted less than two years, the sale still carries IVA. If it lasted two years or more, a sale to a third party pays ITP, unless the buyer is precisely the tenant who used it: then it is still a first delivery and carries IVA. Lettings with a purchase option do not count towards those two years.

The third case runs the other way: a private individual who builds a house to sell it acts as a business for IVA purposes, “even if only occasionally” (art. 5.Uno.d LIVA), and their first sale carries IVA. And in a second delivery to a private buyer, the developer cannot waive the exemption to charge you IVA: that is only possible when the buyer is a business entitled to deduct it (art. 20.Dos LIVA).

AJD stamp duty on new builds: 1.4% or 0.1% in the Comunitat Valenciana

On top of IVA, the purchase deed of a new home pays stamp duty, the Impuesto sobre Actos Jurídicos Documentados (AJD), at its graduated rate. It is due because the deed is a first copy with a quantifiable subject matter, registrable at the Land Registry and not subject to ITP (art. 31.2 TRLITPAJD). The buyer pays it (art. 29) and its base is the declared value, which can never be lower than the Catastro reference value (art. 30.1).

In the Comunitat Valenciana, the general AJD rate is 1.4% for deeds signed from 1 June 2026; until 31 May it was 1.5% (art. 14.Cuatro of Ley 13/1997, as worded by Ley 5/2025). It falls to 0.1% when the deed records the purchase of your main home (art. 14.Uno.a). That 0.1% has no age, income or price limits. It requires the IRPF concept of main home: actually and permanently living in it within the 12 months following the purchase or the completion of the works, and residing there continuously for three years (additional provision 23 of the IRPF Act).

Here the Comunitat Valenciana differs from other regions: there are no reduced AJD rates for age, large families or disability. Those discounts (8%, 6%, 4% or 3%) exist, with their conditions, in ITP on resale homes, not in AJD on new builds.

For buyers from abroad, the conclusion is clear: a non-resident’s holiday home or investment pays 1.4%, because it will not be their main home. The 0.1% only fits if you move your life to Spain and occupy the home permanently within the deadline. In passing, in the Region of Murcia the AJD rate for buying a home subject to IVA is 1.5% from 25 July 2025 (art. 7.8 of Murcia’s Decreto Legislativo 1/2010). The Valencian AJD modelo 600 is filed with the Agència Tributària Valenciana (the regional tax agency) within one month from the deed (art. 14 ter.1 of Ley 13/1997).

Buying off plan in Spain: risks and how to protect yourself

Buying off plan means committing to buy a home that does not yet exist and paying part of the price while it is built. In return you take on risks that do not exist on a resale: that the works never start, that they are delayed, that the developer goes bust, that what is delivered does not match what was promised, or that the market changes before handover. The question “is it safe to buy off plan in Spain?” has a concrete answer: it is safe if the money you pay in advance is guaranteed and paid in where the law requires.

The law gives you three protections that you should check, not assume. The first is the guarantee of advance payments: a bank guarantee or insurance policy covering what you pay before handover, taxes included, plus statutory interest (additional provision 1 of Ley 38/1999, de Ordenación de la Edificación, the LOE or Building Act). The second is the special account, kept separate from the developer’s other money and reserved for construction. The third is mandatory information: the developer must state the handover date and the stage of the works clearly, and give you a copy of the documentation when you sign (arts. 5 and 9 of Real Decreto 515/1989).

The most serious risk is paying before the building licence exists. The obligation to provide a guarantee arises with the building licence, so a reservation fee taken before the licence falls into a grey area. If you are asked for a deposit before the licence, insist on a full refund if the licence is not granted. The second risk is paying into an account that is not the special account, for example to a group company or to the estate agent: pay only by bank transfer to the account identified in the contract.

The third risk is tax and cash flow. Every payment carries IVA from the first euro, so the 10% is paid up front with each instalment. And the rules can change before the deed: the IVA on each payment is calculated at the rate in force when you pay, and AJD at the rate in force on the day of the deed. Anyone who bought off plan in the Comunitat Valenciana and completes after 1 June 2026 pays 1.4% AJD even if they signed the contract when the rate was 1.5%.

The guarantee on off-plan payments (bank guarantee or insurance)

Since 1 January 2016, the protection for what you pay before handover is found in additional provision 1 of the LOE, which replaced the old Ley 57/1968. Every housing developer that takes money before handover must guarantee its refund from the moment it obtains the building licence, through a surety insurance policy or a joint and several bank guarantee (aval), in case the works do not start or are not completed within the agreed period. The guarantee covers what you have paid, taxes included, plus statutory interest from each payment until the expected handover date.

The guarantee must be individual: a policy or bank guarantee in your name, identifying the home and the amount guaranteed. When you sign the contract, the developer must hand you the guarantee document, and the contract must state which institution issues it and into which special account you pay. With insurance, the premium is paid by the developer, and the insurer cannot refuse to pay you on the grounds that the developer did not pay it. A developer that fails to put the guarantee in place commits a consumer protection offence, with a fine of up to 25% of the amounts that should have been insured.

If the works do not start or the home is not delivered on time, you have two options: terminate the contract and recover what you paid with taxes and interest, or grant an extension, documented with the new date. To get paid, you serve formal notice on the developer, for example by burofax or notarial deed. If it does not refund the money within 30 days, you claim from the insurer or the guarantor bank, which has a further 30 days to pay you.

The bank guarantee expires two years after the breach if in that time you have not demanded termination and repayment. For surety insurance, the law refers to the Insurance Contract Act, so check the claims period stated in your policy. The guarantee is only cancelled once the first-occupation document exists and the developer proves it has handed the home over to you. Only what you can prove you paid is refunded.

Off-plan purchase contract in Spain: what to check

The private contract is the document that protects you most, or least, because the deed will come years later and will reproduce what you agreed. First check what the law requires it to include: the obligation to refund what you paid, with taxes and statutory interest, if the works do not start, are not finished on time or the occupation document is not obtained; the reference to the bank guarantee or insurance with the name of the institution; and the institution and special account into which you pay (DA 1.ª Tres LOE). Then the handover date, which must be stated “with complete clarity” (art. 5 of Real Decreto 515/1989), and how much delay allows termination.

Check what you are buying: plans, usable and built floor area, the building specification (memoria de calidades) and the annexes included (garage, storage room), which should form part of the contract to keep the 10% IVA. Changes to the works that alter the price require your agreement (art. 10 of Real Decreto 515/1989). Also ask for the Land Registry extract (nota simple): it confirms that the plot belongs to the developer and whether there is a mortgage financing the construction, which will later be split among the homes.

Check the costs. If you are a consumer, the developer cannot pass on to you the title costs that are its own: the declaración de obra nueva, the division into separate units, the mortgage financing construction and its cancellation, nor the taxes for which it is the taxpayer, such as plusvalía municipal, nor the utility connections if the home must be delivered ready to live in (art. 89.3 of the Texto Refundido de la Ley de Consumidores). Nor can it force you to take over its mortgage or penalise you for not doing so (art. 89.3.b).

Check the penalties. Even if the contract says it will be terminated automatically if you miss an instalment, in a property purchase you can still pay as long as the developer has not demanded termination through the courts or by notarial deed (art. 1504 of the Civil Code). And check whether the contract allows or prohibits assigning your position to another buyer, because that determines your way out if you need to sell before handover.

Costs of buying a new build in Spain: the full calculation

The costs of a new build purchase fall into three blocks. The largest is the 10% IVA, which you pay to the developer as part of the price it invoices, and which it pays over to the tax authorities. The second is AJD, which you self-assess with modelo 600 at the Agència Tributària Valenciana within one month from the deed: 1.4%, or 0.1% if it is your main home. The third is fees: notary and Land Registry and, if you hire them, a gestoría and a tax adviser.

As a guide, notary fees for a home purchase are usually between €600 and €1,200 and Land Registry fees between €400 and €700, depending on the price and the length of the deed, because both follow regulated scales. When you buy from a developer you do not pay plusvalía municipal, which falls on the developer as the transferor (art. 106.1.b of the Texto Refundido de Haciendas Locales), nor the declaración de obra nueva or the division into units, which consumer law assigns to the developer. Nor do you pay the ICIO (construction tax) on the building: that falls on the owner of the works (art. 101 of the same text).

If you buy with a mortgage, the AJD on the loan deed is paid by the bank (art. 29 TRLITPAJD), as are the notary for that deed, the gestoría and the registration of the mortgage (art. 14.1.e of Ley 5/2019). The valuation is yours to pay. If you are a non-resident, add the cost of the NIE and, every year, modelo 210.

A cash-flow detail that is easy to forget: AJD is paid after the deed, but within a short deadline, so have the money ready, ideally in a Spanish account from which to pay it by direct debit. IBI (council tax) for the year of handover is owed by whoever was the owner on 1 January; a split by days in the deed is only a private agreement between you.

New build or resale in Spain: which costs more?

With 2026 rates in the Comunitat Valenciana, a new build pays more tax than a resale at the same price. On a €300,000 home that will not be your main residence, the new build pays IVA €30,000 + AJD €4,200 = €34,200; the resale pays ITP at 9% = €27,000, if the Catastro reference value does not exceed the price. That is a €7,200 difference. If it is your main home, the new build falls to €30,300 with 0.1% AJD, and the gap narrows to €3,300.

ITP also has reduced rates for groups that IVA does not have: 8% or 6% for under-35s buying their first main home, 4% or 3% for large or single-parent families, people with disabilities and victims of gender-based violence, with conditions that in several cases include income limits, and depending on whether the value exceeds €180,000 or not (art. 13 of Ley 13/1997). So a young buyer who meets the conditions can pay considerably less on a resale home. But if the value exceeds one million euros, the resale pays 11% on the whole value.

Taxes are not everything. A new home comes with legal guarantees that a resale home no longer has, or has only in part: the ten-year structural insurance that goes with the home, the liability of developer and builder for 1, 3 and 10 years and, off plan, the guarantee of payments made in advance. It also comes with the energy efficiency of a recent design and fewer works in the short term.

There are two risks specific to resales that a new build bought from a Spanish developer does not have: the 3% retention if the seller is non-resident, and the possibility of ending up liable for the plusvalía as a substitute taxpayer. With a new build, what you do need to watch is that AJD takes the Catastro reference value as a minimum, just like ITP.

Mortgage and taking over the developer’s loan

You can get a mortgage to buy off plan, but the loan is not signed when you reserve; it is signed on the day of the deed, when the home exists and can be mortgaged. Earlier payments (reservation and instalments during the works) come out of your savings. As the deed approaches you have two routes: apply for a new mortgage with the bank of your choice, or take over (subrogate into) the loan that financed construction, which has already been split among the homes.

Taking over the loan cannot be imposed on you: a clause that obliges the consumer to take over the developer’s mortgage, or penalises them for not doing so, is unfair (art. 89.3.b of the Texto Refundido de la Ley de Consumidores). If it suits you, mortgage credit law applies just as it does to a new loan: the developer must notify the bank at least 30 days before the planned signing, so that it can assess your creditworthiness and give you the mandatory information (additional provision 7 of Ley 5/2019).

That information reaches you at least 10 calendar days before signing: the FEIN (the European Standardised Information Sheet), which is a binding offer, the warnings sheet, the draft contract and the breakdown of costs (art. 14.1 of Ley 5/2019). In addition, you must attend a notary of your choice no later than the day before the deed, so that the notary can check that you have received and understood the documentation and draw up a free record (acta); without it the loan cannot be signed (art. 15).

As for costs, the AJD on the mortgage is paid by the bank, at 2% in the Comunitat Valenciana, as are the notary for the loan, the gestoría and the registration. You pay for the valuation. If you are a non-resident, start arranging finance months before handover.

If you do not take over the loan, the developer cancels its loan on your home in the deed, and that cancellation is its cost, not yours (art. 89.3.a of the Texto Refundido de la Ley de Consumidores). And since the private contract is signed long before the loan, it should say what happens if the bank refuses you finance: without that clause, a refused mortgage is not among the agreed grounds for withdrawing, and the developer could apply the contract penalties. Compare taking over the loan with at least one other mortgage: its terms were agreed between the bank and the developer, not with you.

Handover of the keys: first occupation, deed and registration

When the works finish, the developer goes through several formalities before the deed can be signed. First, the final completion certificate signed by the project management team and the acceptance record (acta de recepción) between developer and builder. With those documents it files with the town hall the declaración responsable de primera ocupación — a first-occupation statement which, in the Comunitat Valenciana, replaced the former licencia de primera ocupación (art. 233.1.f of Decreto Legislativo 1/2021, TRLOTUP). Once filed with the documentation, it takes effect immediately and has the same effects as the licence. Water, electricity and gas companies must require it before connecting you (art. 32.3 of Valencian Ley 3/2004, LOFCE).

To authorise and register the deed declaring the finished building, the notary and the registrar require the technical certificate of completion in accordance with the project, the documents that building legislation requires for handing over the home, and those proving fitness for use and energy efficiency (art. 28.1 of the Texto Refundido de la Ley de Suelo). Moreover, without ten-year structural insurance the deed cannot be authorised or registered for the declaración de obra nueva of a home (art. 20.1 LOE).

Then comes your purchase deed. Signing it counts as delivery (art. 1462 of the Civil Code), and it is the moment you pay the rest of the price with its IVA and receive the keys. All buyers need an NIE, and without the tax identification numbers of everyone appearing, the Land Registry will not register (art. 254.2 of the Ley Hipotecaria). The developer also gives you the Libro del Edificio (building logbook), with the project, the acceptance record, the parties involved and the instructions for use and maintenance (art. 7 LOE): keep it, because you will need it to claim for defects.

Before signing, visit the home calmly and note any defects you see in writing. After signing, three things remain: the AJD modelo 600 within one month, registration at the Land Registry, usually handled by the notary’s gestoría or your adviser, and registration with the Catastro, which is normally reported by the notary, the registrar or the town hall. If they do not do it, you file it yourself with modelo 900D within two months (art. 28.2 of Real Decreto 417/2006).

Building defects: LOE warranty periods on new builds

The Ley de Ordenación de la Edificación sets three liability periods, counted from acceptance of the works (art. 17.1 LOE). Ten years for structural damage: foundations, columns, beams, floor slabs and load-bearing walls affecting the strength and stability of the building. Three years for defects that breach habitability requirements: damp from lack of watertightness, noise, thermal insulation and energy saving, hygiene. One year for defects in finishing or completion, for which the builder is liable.

As against the buyer, the developer is jointly and severally liable with the other parties (art. 17.3 LOE). Once the damage appears, you have two years to claim (art. 18 LOE). Besides the LOE, you keep your remedies under the purchase contract and the Civil Code warranty against hidden defects (art. 17.9 LOE).

Of the three guarantees in art. 19, for housing only the ten-year one is compulsory (additional provision 2 LOE): an insurance policy taken out by the developer that protects successive buyers, so it covers you even if you buy from someone who bought from the developer. Its minimum sum insured is 100% of the final cost of material execution, and the excess cannot exceed 1% of the sum insured for each home. Unless agreed otherwise, it does not cover personal injury, contents, works carried out after acceptance, misuse or lack of maintenance, or fires not originating in the installations. For 1-year and 3-year defects there is no compulsory insurance: your claim depends on the solvency of the developer and the builder.

A timing point: acceptance of the works between developer and builder happens before your deed, sometimes months before. The one-year period for finishes may be well advanced by the time you get the keys.

Selling before completion in Spain (assigning the contract)

Selling a flat bought off plan before the deed is, in practice, done by assigning your position in the contract to another buyer, who pays you what you paid in advance plus a premium and takes on the remaining payments. No specific rule governs this assignment for off-plan purchases. The general rules of the Civil Code apply: rights under a contract can be transferred unless otherwise agreed (art. 1112), and changing who must pay requires the creditor’s consent (art. 1205).

Since the new buyer takes on your obligation to pay the rest of the price, you need the developer’s consent. Many contracts prohibit assignment, make it subject to a fee or limit it to certain stages of the works: read that clause before signing if buying to resell is part of your plan. And insist that the guarantee of advance payments is put in the new buyer’s name, because the policy or bank guarantee is individual and protects the buyer named in the contract.

For tax purposes, your profit is taxed as a capital gain: in your income tax return if you are resident in Spain (art. 33 of the IRPF Act) or in Non-Resident Income Tax (IRNR) if you are not, because it is income from rights over a Spanish property. If you buy and assign regularly or in an organised way, the activity may be classed as a business activity, with different rules. Whether any withholding applies depends on the case: check before signing. The assignment document must state the exact amount you receive, the basis for calculating the gain.

Buying a new build in Spain as a non-resident: NIE, modelo 210, IBI

For a non-resident, the purchase is the same, with three differences. The first is the NIE. You need it before the deed: the notary must record the tax identification number of everyone appearing (art. 23 of the Ley del Notariado) and, for a foreign national, that number is the NIE or, failing that, a tax number beginning with M assigned by the Agencia Tributaria (art. 20 of Real Decreto 1065/2007). Apply early.

The second is the annual modelo 210 for a home you do not let. New builds have an advantage: while the home is under construction there is no deemed income (art. 85.1 of the IRPF Act), and before the deed you are not the owner either, so paying off-plan instalments does not trigger modelo 210. Deemed income starts on the day you become the owner and is calculated by days: 2% of the cadastral value, or 1.1% if that value was revised in the previous ten years. Since a new home often has no cadastral value notified by 31 December, the special rule applies: 1.1% on 50% of the higher of the purchase price and the value verified by the tax authorities. It accrues on 31 December and is declared the following year; the rate and deadlines are in our modelo 210 guide.

The third is IBI. It is paid by whoever owns the property on 1 January (art. 75 of the Texto Refundido de Haciendas Locales), so the bill for the year of the deed is usually the developer’s, and your first one arrives the following year. Because the Catastro backdates the registration to the actual date of completion or of the deed, a late registration can bring assessments for earlier years.

What does not affect you when buying from a Spanish developer: the 3% retention, which only applies when a non-resident without a permanent establishment sells (art. 25.2 of the Texto Refundido del IRNR), and plusvalía municipal, which the developer pays. If the developer is a foreign company with no establishment in Spain, ask before the deed for the Agencia Tributaria certificate proving that it is taxed under Spanish Corporate Income Tax (art. 14.2.a of the IRNR Regulations); without it, the obligation to withhold would be yours.

Self-build in Spain: building your own home (10% IVA, ICIO, ten-year insurance)

If you buy a plot and commission your house, you are the developer of the works. The plot is taxed according to who sells it: a private individual sells it to you with ITP (9% general rate in the Comunitat Valenciana, on the higher of price and reference value); a business, generally with IVA. A plot is not a home, so the 10% rate for homes does not apply to it: ask about the rate before you sign.

The construction work does have a reduced rate: building works for buildings used mainly as housing (at least 50% of the built area) are taxed at 10% IVA when the contract is signed directly between the developer and the contractor (art. 91.Uno.3.1.º LIVA). According to the Agencia Tributaria, subcontractors do not qualify for the reduced rate, and doors, windows or kitchen units bought without installation go to 21%; kitchen and bathroom cabinets and built-in wardrobes sold with their installation do go to 10% (art. 91.Uno.3.2.º). The architect’s and quantity surveyor’s fees are professional services, not building works, and carry the standard rate.

The town hall charges the Impuesto sobre Construcciones, Instalaciones y Obras (ICIO, construction tax) to the owner of the works (art. 101 of the Texto Refundido de Haciendas Locales): up to 4% of the cost of material execution, excluding IVA, fees and the builder’s profit (art. 102). The actual rate and any rebates, for example for installing solar energy, depend on the municipal bylaw. On top of that comes the fee for the licence or for checking the responsible declaration (art. 20.4.h).

Ten-year structural insurance is not compulsory for an individual self-builder of a single detached home for their own use (additional provision 2 LOE). But if you sell the house within ten years, you must take it out for the remaining period, and the notary will not authorise the sale without it unless the buyer expressly waives it and you prove that you have used the home. Watch the IVA too: if you build to sell, you are a business (art. 5.Uno.d LIVA) and your first sale carries IVA. When the works are finished, you declare the new building in a deed, with its AJD (next section).

What is a declaración de obra nueva, when is it needed and what tax does it pay?

The declaración de obra nueva is the deed in which the owner of a piece of land records that a building has been built on it, so that the Land Registry can register it. In a development it usually goes together with the horizontal division (división horizontal), which divides the building into separate homes, garages and storage rooms, each with its own registered property. It can be granted during construction, with the licence and a technical certificate, or on completion, with the final completion certificate, the ten-year insurance and the handover and occupation documents (art. 28 of the Texto Refundido de la Ley de Suelo; art. 20 LOE).

For tax purposes it pays AJD, because it is a deed with a quantifiable subject matter, registrable and not subject to other heads of the tax (art. 31.2 TRLITPAJD). The base for the new building is the actual cost of the works declared; for the horizontal division, the actual value of the land is added (art. 70 of the tax’s Regulations, Real Decreto 828/1995). In the Comunitat Valenciana there is no specific rate for these deeds, so the general 1.4% applies (art. 14.Cuatro of Ley 13/1997). As there is no buyer, it is paid by whoever grants or requests the deed: the developer or the owner making the declaration (art. 29 TRLITPAJD).

Who pays for the declaración de obra nueva when you buy from a developer? The developer: consumer law prohibits charging the buyer the costs of the new building declaration and the horizontal property regime (art. 89.3.a of the Texto Refundido de la Ley de Consumidores). It does not trigger plusvalía municipal, because that tax applies to transfers of land and there is no transfer here (art. 104.1 of the Texto Refundido de Haciendas Locales). With the Catastro it is declared on modelo 900D (the old 901N and 902N no longer exist) within two months of completion, unless the town hall, the notary or the registrar reports it.

Is it compulsory? Without it the house does not appear in the Land Registry, and you will not be able to register a sale that describes it or mortgage it in the normal way. For a self-builder building their main home, the literal wording of the Valencian 0.1% refers to deeds recording purchases of a main home, and a declaración de obra nueva is not a purchase: do not count on that rate without an express ruling from the Agència Tributària Valenciana.

Registering an old unregistered building (declaración de obra nueva por antigüedad)

What is known as a declaración de obra nueva por antigüedad is the route for registering a building finished years ago that was never declared: an extended country house, a home built without a licence or an annex that does not appear in the deed. The law does not use that expression: it is governed by art. 28.4 of the Texto Refundido de la Ley de Suelo for buildings over which demolition can no longer be ordered, because the period for restoring planning legality has expired. If that period has not expired, this route does not work: the situation would first have to be resolved through the planning route.

To register it you need a document proving that the works were completed by a given date and a description matching the deed: a certificate from the town hall or from a qualified professional, a descriptive notarial record, or a descriptive and graphic Catastro certificate. The registrar checks that no planning enforcement proceedings are noted and that it is not public land, registers it and notifies the registration to the town hall, which must issue a decision on the planning status of the property.

For tax purposes, the declaración de obra nueva por antigüedad has no special regime: it pays the same 1.4% AJD in the Comunitat Valenciana, on the actual cost of the works declared. How that cost is quantified for works finished years ago is not settled in the rules, and the authorities can check the declared value; it is advisable for the technical professional to justify it on a sound basis.

The building must also appear in the Catastro: if it does not, it is declared on modelo 900D. If you are buying a home with undeclared buildings, ask the seller to regularise them before the deed: works that do not appear in the Land Registry are not protected by it, and doubtful planning situations pass to the buyer. Registering is not legalising: the works are registered with their planning status, not with a licence.

Tax calendar for the first year of your new home

During construction (off plan). Each payment comes with its invoice showing 10% IVA, or 21% if you are buying a separate garage or storage room, and must be covered by the individual guarantee. There is no AJD, no IBI in your name and no modelo 210: while the home is under construction there is no deemed income and you are not yet the owner.

On the day of the deed. You pay the rest of the price with its IVA and sign; if there is a mortgage, it is signed straight afterwards. If the developer is not tax resident in Spain, this is the moment to check its certificate to rule out the 3% retention. With the home handed over, the developer can cancel the guarantee on your advance payments: before signing, check that the deed records everything you paid on account. Keep invoices and transfers: they make up your acquisition cost for when you sell.

In the following month. You file the AJD modelo 600 with the Agència Tributària Valenciana within one month from the deed, at 1.4% or 0.1%. Then the purchase is registered at the Land Registry. Within the following two months, if nobody has reported it, you declare the acquisition to the Catastro on modelo 900D. Set up water and electricity with the first-occupation statement (declaración responsable de primera ocupación).

On 31 December the deemed income for modelo 210 accrues for the days of ownership that year, if you are a non-resident and do not let the property. On the following 1 January you become the IBI taxpayer, and your first bill arrives that year; if the Catastro registration was delayed, back assessments may also arrive. During the following year you file your first modelo 210, within the deadline set out in our modelo 210 calendar. And during the first year after acceptance of the works, check the finishes: that is the builder’s warranty period.

How we can help

At spainfiscal we work for foreign and resident buyers purchasing homes on the Costa Blanca, and new builds are where reviewing the tax side before you sign adds most value, not on the day of the deed. Before the reservation, we check who is selling and which tax applies (IVA or ITP), whether the garage and storage room fall within the 10%, which AJD rate really applies to you and how much you will pay in total, with every item justified.

During the purchase, we review the contract, the individual guarantee on your payments and the invoices for each instalment from a tax perspective, and help you with the NIE if you do not have one yet. After the deed, we prepare and file modelo 600 on time, check the Catastro registration and, if you are a non-resident, take care of modelo 210 every year, starting with the first, pro-rated by days.

If you are going to build your own home, we calculate the IVA on the works, the ICIO and the AJD on the declaración de obra nueva. If you plan to assign the contract before completion, we analyse how the gain will be taxed in Spain. You can ask us for a quote from the services page.