Several studies indicate that, during this 2024, municipalities will give the green light to the construction of around 110,000 new homes in our country. A type of property that, undoubtedly, proves to be very attractive for families interested in aspects such as sustainability and home automation when forming a home.
One of the main differences compared to second-hand homes is that new construction homes do not have to pay the ITP. It is another tax that they are obliged to pay: the Value Added Tax, commonly known as VAT.
What is the Value Added Tax?
VAT is a tax applied to the consumption of goods and services. It is mandatory in most countries and is imposed uniformly within the European Union.
It is crucial to consider it in all commercial real estate transactions, as it affects billing and the total cost of items.
How is VAT applied to new construction homes?
As we pointed out at the beginning, only new homes – treated as commercial transactions – are subject to VAT, unlike second-hand ones, which are governed by the Property Transfer Tax (ITP).
Law 37/1992, of December 28, establishes that:
- “Buyers of new properties mainly intended for housing must pay the tax rate in force at the time of the transaction. This applies to buildings where, at least, 50% of the built area is intended for properties and includes garages and annexes transmitted together (provided that the number of parking spaces designated to each owner does not exceed two units).”
In Spain, the VAT for these constructions is 10%. The buyer pays this tax to the seller, who then delivers it to the Tax Agency.
Are there exceptions in paying the Value Added Tax?
The answer is yes. There are special situations in the payment of this contribution:
- Properties under particular regimes, such as official protection (VPO) or integrated into public projects, benefit from a discount on VAT, which can be up to a 4% reduction.
What other taxes are associated with the purchase of a new construction property?
As mentioned earlier, new homes present tax differences compared to secondhand ones.
In addition to VAT, the tax on legal document acts (IAJD) must be considered, another very relevant levy in the acquisition of properties.
This tax is applied to the notarial formalization of the purchase, based on a percentage of the deed value – which varies between 0.5% and 1.5% depending on the region – and its payment is the responsibility of the buyer.
Find the home you’ve always dreamed of
Have you decided to invest in a newly constructed home? You’re in the right place! Atipika Lifestyle Properties specializes in the sale of the finest luxury new construction developments.
We carefully select the best locations in the city of Barcelona, the southern coastal areas, and the inland areas of Catalonia, as well as the Maresme, the Costa Brava, and Menorca.
We invite you to explore all our available properties here.
Feel free to visit our offices in Barcelona, Castelldefels, or Menorca, where you will receive the exclusive and professional attention you deserve. We look forward to welcoming you at:
- Passeig de Gràcia 20, 2º 1ª – Barcelona.
- Carrer Saragossa 1-3, local 19 – 20 – Castelldefels.
- Avinguda de Fort de l’Eau, 64 – Maó.
