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Buyers budget for the price and then discover the bill. On a new-build home in Andalucía the purchase carries 10% VAT plus stamp duty; on a resale it carries transfer tax. The two routes are not taxed the same way, and on the same headline price the difference runs to tens of thousands of euros.
Here is the full picture, using a €695,000 home in Estepona — the median starting price of the 84 Estepona developments in our portfolio — as the worked example.
The tax is different because the seller is different
Buying from a developer means you are the first owner of a newly built property. That is a sale of goods, so it carries IVA at 10%, plus AJD (stamp duty) at the Andalucían rate of 1.2%.
Buying from a private owner is a second-hand transfer, so it carries ITP (transfer tax) instead — 7% in Andalucía — and no VAT.
You never pay both. That is the most common misunderstanding among foreign buyers: new build is IVA plus AJD, resale is ITP.
What it costs on €695,000
| Cost | New build | Resale |
|---|---|---|
| Purchase tax | €69,500 (IVA 10%) | €48,650 (ITP 7%) |
| Stamp duty (AJD) | €8,340 (1.2%) | — |
| Notary | €600–900 | €600–900 |
| Land registry | €400–700 | €400–700 |
| Lawyer (approx. 1% + VAT) | ≈ €8,400 | ≈ €8,400 |
| Total on top of price | ≈ €87,500 | ≈ €58,400 |
| As a share of price | ≈ 12.6% | ≈ 8.4% |
Same property value, roughly €29,000 more in costs on the new build. That is not a hidden fee — it is the structure of Spanish property taxation.
Why anyone buys new build anyway
Because the difference buys something. A new build comes with a ten-year structural defect warranty under the building regulations, a brand-new installation, and a completion date you can plan around rather than a chain of sellers.
On a resale the tax is lower but the risk moves elsewhere: the property’s paperwork, any unregistered extensions, community debts, and the state of the installations. None of that is covered by a warranty.
The costs that come after
- IBI — municipal property tax, billed annually.
- Community fees — monthly. Ask for the current budget, not a projection.
- Rubbish collection — a separate municipal charge in most Andalucían towns.
- Insurance — building and contents.
- Non-resident income tax — if you are not resident in Spain, there is an annual filing based on the property, even when it is empty.
What you pay when you sell
Plusvalía municipal — a local tax on the increase in the land’s value, paid by the seller, calculated by one of two methods since the 2021 reform. And capital gains tax on the profit, filed the following year. Both depend on dates, values and your tax residence, so they belong in a conversation with your adviser.
Examples currently for sale
- New development in Estepona — €705,000 to €933,500, 2–3 bedrooms, 70–88 m². At €705,000 the new-build costs come to roughly €88,800 on top.
- Villa in Benahavís — €3,323,000, 5 bedrooms, 717 m². At this level the tax alone is €332,300 plus €39,876 stamp duty.
Practical checklist before you commit
- Add 10–13% for a new build, 8–10% for a resale. If the sums only work at the asking price, they do not work.
- Ask the developer for the VAT and AJD breakdown in writing — it should appear in the contract.
- For a resale, ask for the last IBI receipt, the community payment certificate and the nota simple from the registry.
- Confirm the current regional rates with your lawyer. They are set by the autonomous community and they change.
Frequently asked questions
Do I pay VAT and transfer tax on the same property?
No. New build from a developer: IVA 10% plus AJD. Resale from a private owner: ITP 7% in Andalucía. Never both.
Is a new build always more expensive to buy?
In tax and fees, yes — roughly 12.6% against 8.4% of the price in our example. Whether that is more expensive overall depends on what the warranties and the condition of the property are worth to you.
Who pays the plusvalía municipal?
The seller, since the 2021 reform. Not a buyer’s cost, but check that it has been dealt with before completion.
Are these rates the same across Spain?
No. ITP and AJD are set by each autonomous community. These are the Andalucían rates as of 2026; confirm them with a Spanish lawyer or tax adviser before committing.
General information, not tax or legal advice. Rates, reductions and filing obligations change and depend on your personal circumstances.
Related reading
- What €500,000, €1m and €2m Buy in a New Development Around Marbella
- Benahavís, Estepona or Mijas: Where New-Build Buyers Get Most for Their Money
- Off-Plan in Marbella: Seven Checks Before You Pay a Deposit
- All guides on buying new-build property on the Costa del Sol
New developments under €500,000
Area guides
- New developments in Benahavís 2026 — 44 developments, from €400,000 to €10,900,000.
- New developments in Estepona 2026 — 84 developments, from €229,000 to €4,750,000.
- New-build price index — what 632 developments actually cost, town by town.
- The cheapest places to buy a new build on the Costa del Sol
- What €300,000 buys in a new build
- New builds in Mijas — 55 developments from €225,000
Disclaimer
The information in this article is provided in good faith for general guidance. Prices, availability, development details and completion dates are those advertised at the time of writing and can change without notice. Floor areas, bedroom counts and specifications are supplied by the developer, not measured by us. Nothing here is tax, legal or investment advice, and it does not replace a formal valuation, a lawyer’s review of the contract, or advice from a qualified adviser familiar with your circumstances. We take care to keep the figures correct, but errors and omissions can occur — please confirm any detail that matters to your decision with us before you commit.
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