New build or resale in Catalonia: 10% IVA + AJD versus ITP

A new home bought directly from the developer carries 10% IVA plus AJD; a resale home pays ITP on Catalonia's progressive scale. A private investor usually cannot recover the IVA paid on the purchase, so a lower rate does not by itself make the purchase cheaper.

Two tax regimes in one market

The first transfer of a new home, meaning a purchase made directly from the developer (directamente del promotor), is subject to value added tax, IVA (VAT), at 10%. On top of that comes Actos Jurídicos Documentados (AJD), a stamp duty that in Catalonia is usually 1.5% of the price. Any later sale is a resale, and it pays ITP on the progressive Catalan scale (10–13%). Confuse the two regimes and your budget will be out by several percentage points.

Why the lower IVA rate is not always cheaper

Comparing 10% IVA with 12–13% ITP is not a fair comparison: those ITP figures are the rates on the top bands of the progressive scale, not the effective rate on the whole price (we cover this in our article on Catalonia's progressive ITP scale). Add the 1.5% AJD that comes with a new-build purchase to the 10% IVA, and the real up-front charge is 11.5% of the price. The effective ITP rate on a resale home is lower across the same price range: 10% up to €600,000, about 10.33% at €900,000, then 10.5% at €1,000,000 and 11% at €1,500,000. It only catches up with IVA+AJD on a property of around €2,000,000. In other words, on most deals a resale under ITP works out cheaper than a new build under IVA+AJD, not more expensive.

The 'IVA is not recoverable' argument is weak on its own too: ITP is never recoverable either, for anyone. Input IVA can only be offset by a business that resells the property and charges IVA on the sale, and reselling a renovated flat to a private buyer is a second transfer, exempt from IVA (LIVA art. 20.Uno.22), so a DNPI Capital project never has that offset available. What decides the outcome is not whether the tax can be deducted, but the actual amount due at the property's actual price.

Renovation is taxed differently too

Renovation work for an investor company carries IVA at the standard rate of 21%. The reduced 10% rate is for an individual renovating a dwelling for their own private use — it does not have to be their main home, but it cannot be let out or used for business — provided the building is over two years old and the contractor's materials do not exceed 40% of the taxable base (Agencia Tributaria). Letting the property rules the rate out, just as buying through a company does. We covered this difference in our article on the full project budget: it is where the calculation most often breaks down.

When to settle the tax regime

You need to know whether the property is a new build or a resale before you draw up the budget, not afterwards: that decides which tax line goes into it. The DNPI calculator works out the scenarios for each tax regime separately.