Buying Guide · 8 min read
If the proposed "100% tax" on non-EU buyers has been keeping you up at night, there is a structural detail in Spanish tax law that should put you at ease — and it is the reason so many British buyers are now looking seriously at new-build and off-plan property. Put plainly: the proposed surcharge sits on the resale transfer tax (ITP), but new-builds are not taxed under ITP at all. They are taxed under IVA. So even if the measure were ever revived and passed, off-plan and new-build purchases would sit entirely outside its reach.
That makes new-build a natural safe harbour — not a loophole, but a feature of how the two tax systems work. In our pillar piece, Spain's 100% non-EU tax, explained, we cover the proposal's full status. Here we go deeper into the practical mechanics: what off-plan actually means, how it is taxed, how you pay in stages, the legal protection on your deposits, and the honest pros and cons.
A new-build (obra nueva) is a property sold for the first time directly by the developer or promoter — never previously owned or lived in. Off-plan (sobre plano) is a new-build you reserve before, or during, construction — sometimes from nothing more than architectural drawings, a show home and a render. You commit early, the developer builds, and you complete when the property is finished and signed off.
The distinction that matters for tax is simple: both are first-transfer properties from a developer, and both are taxed the same way — under VAT, not transfer tax. A resale (second-hand, sold by a private owner) is the one that attracts ITP.
This is the heart of the safe-harbour argument, so it is worth being precise. In Andalucía a resale attracts 7% ITP (Impuesto de Transmisiones Patrimoniales) — the regional transfer tax. A new-build or off-plan purchase instead attracts 10% IVA (VAT) plus roughly 1.2% AJD (Actos Jurídicos Documentados, the stamp duty on the deed).
Both routes land at a broadly similar all-in figure — around 12–14% of the price once you add notary, land registry and legal fees (typically 1–1.5%). The difference is not really the headline cost; it is which tax applies. And that is the crucial point: the proposed 100% surcharge was a surcharge specifically on top of ITP. Because new-builds never touch ITP, they would have been exempt even if the surcharge had ever become law.
| Tax / Cost | Resale property | New-build / off-plan |
|---|---|---|
| Transfer tax (ITP) | 7% (Andalucía) | N/A — not applicable |
| VAT (IVA) | N/A — not applicable | 10% |
| Stamp duty (AJD) | N/A | ~1.2% |
| Total all-in buying cost* | ~12–14% | ~12–14% |
| Exposed to proposed 100% ITP surcharge? | In scope (if ever passed) | ✓ Exempt — taxed under IVA |
* "All-in" figure includes purchase tax plus typical legal, notary and registry fees (around 1–1.5%). The proposed surcharge was shelved and has never been law — this row simply shows where each route would sit if it ever were.
"The surcharge was always written against ITP — resale tax. New-builds are taxed under IVA, so off-plan was never in scope. For a nervous non-EU buyer, that is not a clever workaround; it is just how the two systems are structured."
Off-plan is paid in instalments rather than a single lump sum, which suits buyers who want to spread the cost over the build period. The exact schedule varies by developer, but it typically looks like this:
Spreading payments across the build can ease cash flow, and buying early in a development often secures the best units and pricing. But it does mean your money goes in before the home physically exists — which is exactly why Spanish law builds in a strong protection.
This is the single most reassuring fact about buying off-plan in Spain, and it is one many buyers do not realise. Under Spanish law (rooted in Law 38/1999 and reinforced by Law 20/2015), a developer taking off-plan payments must secure every instalment you pay with a bank guarantee or an insurance policy.
In practice that means if the developer goes bust, fails to obtain the licences, or never delivers the property, you are legally entitled to recover the money you paid in, typically with interest. Your stage payments should be paid into a special protected account, not handed over freely. A good lawyer's first job on an off-plan purchase is to verify these guarantees exist before you part with a euro. With that protection in place, the headline risk of off-plan — paying for something not yet built — is materially contained.
"Never pay an off-plan instalment without confirming the bank guarantee or insurance is in place. It is your legal right under Spanish law, and it is the line between a secured purchase and an unsecured gamble."
When construction finishes, the developer obtains the Licence of First Occupation (Licencia de Primera Ocupación) — the certificate confirming the property is legally habitable and built to plan. Before you complete, you carry out a snagging inspection: a detailed walk-through (ideally with an independent surveyor) to list any defects, unfinished work or deviations from the agreed specification, which the developer is obliged to put right.
Only once snagging is resolved and the licence is in hand do you complete at the notary, pay the balance plus IVA and AJD, and register the title. New-builds also carry statutory warranties — broadly one year on finishes, three years on systems, and ten years on major structural elements — which a resale simply does not offer.
We are a truth-first agency, so here is the balanced picture rather than a sales pitch.
Off-plan and new-build fit best if you are not in a rush, you value a modern, warranted, low-maintenance home, and you want the reassurance of sitting outside any future ITP surcharge. It also suits buyers who like spreading payments over the build, and those drawn to the Costa del Sol's new developments — where, per Taylor Wimpey España, around 75% of British reservations are concentrated. If you need to move immediately, or you specifically want the negotiating leverage and established character of a resale, then a second-hand purchase may still be the better call. Buying property is now fully decoupled from residency in any case — the Golden Visa was abolished on 3 April 2025 — so the choice is purely about the home, not an immigration route.
Updated June 2026. Policy and developer practice can change; we revise this page when they do. The 100% surcharge referenced here was proposed in January 2025, never had a parliamentary reading or vote, and was dropped from the January 2026 housing package — see our pillar explainer for the full status.
This article is general information for British and non-EU buyers and is not tax or legal advice. Always confirm your specific position — and verify any developer's bank guarantees — with a qualified Spanish lawyer and a tax adviser (gestora) before committing to a purchase.
We'll vet the developer, confirm the bank guarantees, and walk you through the real numbers — calmly, with no jargon and no scare tactics. Book a free call and we'll give you the honest picture.
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