What taxes do you pay when you buy a new build in the Valencia region?
When you buy a new build in the Valencia region you pay 10% VAT plus stamp duty (AJD) on the deed: 0.1% if it will be your main home and 1.4% if it will not. The AJD on the mortgage is paid by the bank. On a €300,000 home, taxes come to €30,300 or €34,200.
Key points
- New builds pay 10% VAT plus stamp duty (AJD): 0.1% on your main home, 1.4% otherwise.
- On a €300,000 new build that is €30,300 as a main home or €34,200 as a second home.
- A resale home of the same price pays 9% transfer tax (ITP): €27,000.
VAT: the biggest tax on a new build
The first sale of a new home by the developer is subject to VAT, not to transfer tax (ITP). Spanish VAT law sets a 10% rate for homes, up to two parking spaces and storage rooms sold together with the home. Only officially protected housing under the special regime (VPO de régimen especial) pays 4%.
You pay the VAT to the developer: part with each stage payment and the rest at completion before the notary. So it is not paid all at once at the end, but it is the largest single cost after the price.
Stamp duty (AJD): main home or second home
The purchase deed of a new build also pays stamp duty (Actos Jurídicos Documentados, AJD), which goes to the Generalitat Valenciana. Since 1 June 2026 the general rate is 1.4% (it was 1.5%), under Law 5/2025.
If the property will be your main home, the rate is 0.1%. Law 5/2026, in force since 11 August 2026, keeps this rate for deeds acquiring a main home. For a holiday home, a second home or an investment, the 1.4% applies.
The full sum: a €300,000 example
This is what the buyer pays in taxes on a €300,000 home (price excluding taxes):
| Case | Taxes | Total |
|---|---|---|
| New build, main home | VAT 10% (€30,000) + AJD 0.1% (€300) | €30,300 |
| New build, second home or investment | VAT 10% (€30,000) + AJD 1.4% (€4,200) | €34,200 |
| Resale home | ITP 9% (€27,000) | €27,000 |
Notary, Land Registry, valuation and any gestor are paid on top. They are not taxes, but you should budget for them as well.
The AJD the bank pays
If you take out a mortgage, the mortgage deed also pays AJD. Since November 2018 (Royal Decree-law 17/2018) this tax is paid by the lender, not by you, so it does not appear in your purchase taxes.
The developer also pays AJD at 1.4% on its own deeds, such as the declaration of new construction and the division of the building into units. These are part of the developer's costs before a single home is sold.
Why new builds cost more in taxes
- VAT (10%) is higher than resale ITP (9%) in the Valencia region since 1 June 2026.
- On a new build you add AJD on top of VAT; on a resale home the ITP is the only purchase tax.
- Developers pay taxes on their own deeds during construction, which form part of their costs.
In exchange, a new build comes with current energy standards, guarantees from the developer and no immediate renovation costs. The taxes are one of the many reasons why new builds are more expensive, not the only one.
What this means for you
If you are buying: add at least 10.1% (main home) or 11.4% (second home) to the price of a new build before you look at the mortgage, plus notary and registry. Ask the developer for the payment schedule with VAT broken down.
If you are selling a resale home: your buyer pays 9% ITP instead of 10% VAT plus AJD. That difference can be a real argument in your favour when you price your home against new builds nearby. Figures are a guide only; please check with your tax adviser.
Frequently asked questions
Do I pay VAT or ITP on a new build? On the first sale by the developer you pay VAT (10%) plus AJD. If you buy a home that someone else has already owned, you pay ITP (9% in the Valencia region since 1 June 2026).
Who pays the AJD on the mortgage? The bank. Since November 2018 the lender pays the AJD on the mortgage deed. You pay the AJD on the purchase deed.
Does the 0.1% AJD apply to non-residents? The reduced rate is linked to the home being your main residence. A holiday home or an investment property pays the general 1.4%. Check your case with your tax adviser before signing.
See our new builds in Alfaz del Pi and Albir, all our new-build developments or how we sell your home.
Selling a resale home? Find out what it is worth with our free online valuation. Buying a new build? Call us on 965 064 440 or send us a WhatsApp on 601 868 660 and we will go through the taxes with you. We specialise in Alfaz del Pi, Albir, La Nucía, Altea, Benidorm and Finestrat, with an office in Albir.
Guide only; please check with your tax adviser or lawyer.
Sources: Spanish Tax Agency, VAT rates (Law 37/1992, art. 91); Law 5/2025 (RSM, 2025); Law 5/2026 of 31 July (BOE, Garrigues, August 2026); Guiafiscal.es (consulted 04/11/2026); Royal Decree-law 17/2018 (Garrigues, 08/11/2018).
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