New build or resale (2026): how the purchase taxes differ in Portugal, Spain and England
Only Spain taxes a new build differently. A new home bought from a Spanish developer pays 10% VAT plus a regional stamp duty (AJD) instead of transfer tax, which comes to more tax than a resale in every region on this site. In England a new build pays the same stamp duty as an older home and is sold without VAT. In Portugal the buyer pays IMT and stamp duty on new and resale homes alike.
Key facts
- Spain: new build from a developer pays 10% VAT plus regional AJD; a resale pays transfer tax (ITP) instead.
- England: the same SDLT on new and resale homes; a builder's first sale of a new home is zero rated for VAT.
- Portugal: IMT and 0.8% stamp duty on new and resale homes alike.
- In England a new-build plot usually costs more to register at HM Land Registry, because it is a transfer of part of the developer's title.
Does a new build cost more in tax than a resale?
Only in Spain:
| New build | Resale | |
|---|---|---|
| Spain | VAT at 10% plus regional stamp duty (AJD) | Regional transfer tax (ITP) |
| England | Stamp Duty Land Tax; no VAT for the buyer | Stamp Duty Land Tax |
| Portugal | IMT plus 0.8% stamp duty | IMT plus 0.8% stamp duty |
Spain’s VAT on homes is in its VAT law (Ley 37/1992) and the transfer tax and AJD in the ITP and AJD law (Real Decreto Legislativo 1/1993), with each region setting its own ITP and AJD rates. England zero rates a builder’s first sale of a new home (HMRC VAT Notice 708, section 4).
How much more does a new build cost in Spain?
For a buyer’s main home at €300,000, resale against new build:
| Rank | Place | Buyer | Taxes | Fees, typical | Total on top | Share of price |
|---|---|---|---|---|---|---|
| 1 | Spain, Madrid | Resale, main home, price €300,000 | €18,000 | €4,148.54 | €22,148.54€20,348.54 to €24,248.54 | 7.38% |
| 2 | Spain, Andalusia | Resale, main home, price €300,000 | €21,000 | €4,148.54 | €25,148.54€23,348.54 to €27,248.54 | 8.38% |
| 3 | Spain, Valencian Community | Resale, main home, price €300,000 | €27,000 | €4,148.54 | €31,148.54€29,348.54 to €33,248.54 | 10.38% |
| 4 | Spain, Catalonia | Resale, price €300,000 | €30,000 | €4,148.54 | €34,148.54€32,348.54 to €36,248.54 | 11.38% |
| Rank | Place | Buyer | Taxes | Fees, typical | Total on top | Share of price |
|---|---|---|---|---|---|---|
| 1 | Spain, Valencian Community | New build, main home, price €300,000 | €30,300 | €4,148.54 | €34,448.54€32,648.54 to €36,548.54 | 11.48% |
| 2 | Spain, Madrid | New build, main home, price €300,000 | €32,250 | €4,148.54 | €36,398.54€34,598.54 to €38,498.54 | 12.13% |
| 3 | Spain, Andalusia | New build, main home, price €300,000 | €33,600 | €4,148.54 | €37,748.54€35,948.54 to €39,848.54 | 12.58% |
| 4 | Spain, Catalonia | New build, price €300,000 | €34,500 | €4,148.54 | €38,648.54€36,848.54 to €40,748.54 | 12.88% |
Madrid has the lowest transfer tax of the four on a resale, so the step up to VAT is largest there. See VAT and AJD on new builds in Spain for each region’s stamp duty and its reduced rates.
Is a new build taxed the same as a resale in England and Portugal?
Yes. In England, stamp duty depends on the price and the buyer, not the age of the home:
| £350,000 main home, buyer owns no other home | SDLT |
|---|---|
| Resale | £7,500 |
| New build | £7,500 |
One fee does differ in England: a new-build plot is usually a transfer of part of the developer’s title, which HM Land Registry charges at its higher scale. See conveyancing and fees in England.
In Portugal the buyer pays IMT and stamp duty on a new home exactly as on a resale. Portugal and England at the same price, new build, each in its own currency:
| Place | Buyer | Currency | Taxes | Fees, typical | Total on top | Share of price |
|---|---|---|---|---|---|---|
| Portugal (mainland) | Main home, tax-resident, price €350,000 | EUR | €17,036.65 | €4,750 | €21,786.65€20,911.65 to €24,736.65 | 6.22% |
| England | Main home, tax-resident, no other home, price £350,000 | GBP | £7,500 | £1,500 | £9,000£8,400 to £9,600 | 2.57% |
Which country is cheapest for a new build?
England and Portugal, by a wide margin, because neither adds VAT on top for the buyer. Among the Spanish regions, the gap between new build and resale depends on the region’s AJD rate and its main-home reductions.
What this section does not cover
- Buying off plan: stage payments, deposits and guarantees.
- VAT on self-build, renovation and conversion work.
- VAT on new builds in Portugal, including the reduced rate for some new homes introduced in 2026.
- Snagging, warranties and service charges on new developments.
Taxes and fees
- Stamp duty and VAT on a new build in Spain (2026): IVA and AJD by region
A new home bought from its developer pays 10% VAT (IVA) on the price and stamp duty (AJD) on the deed, instead of transfer tax. The general AJD rate is set by each region: 0.75% in Madrid above €180,000, 1.5% in Catalonia, 1.4% in the Valencian Community and 1.2% in Andalusia, with lower rates for main homes and some buyers.
Comparisons
- Where buying costs are lowest: Portugal, Spain or England (2026)
For a tax-resident buyer of a main home, Madeira and the Azores have the lowest buying taxes of the euro places on cheaper and mid-priced homes, then mainland Portugal; on expensive homes Madrid comes first. Catalonia has the highest. For a non-resident, Madrid comes first, because Spain has no non-resident surcharge and Portugal charges a flat 7.5% IMT. For a new build, Portugal is cheapest. England, in pounds, takes a small share of the price for a resident home mover, but a large one for a buyer who already owns a home.
- Portugal or Spain (2026): which costs less to buy a home?
For a tax-resident buyer of a main home, Portugal usually costs less: its IMT starts at 0% and rises in bands, while Spain's regions charge 6% to 10% or more on a resale from the first euro. For a non-resident who will not move there, Portugal's flat 7.5% IMT plus 0.8% stamp duty makes Madrid and Andalusia cheaper. On a new build, Spain's 10% VAT makes every Spanish region the dearer choice.
- Spain or England (2026): where does buying a home cost more?
For a resident buying their main home, England's stamp duty is a smaller share of the price than Spain's transfer tax, because England's bands start at 0% while Spanish regions charge 6% to 10% or more from the first euro. A buyer who already owns a home anywhere pays 5% extra in England from the first pound, so a second home in England can cost more than one in Madrid or Andalusia. New builds cost more in Spain, where they pay 10% VAT.
Questions people ask
Is it cheaper to buy a new build or a resale home in Spain?
In tax, a resale. A resale pays the region's transfer tax, from 6% in Madrid to 10% and more in Catalonia. A new build pays 10% VAT plus the region's AJD stamp duty, which is more in every region on this site.
Do you pay stamp duty on a new build in England?
Yes, at the same rates as an older home. There is no VAT for the buyer, because a builder's first sale of a new home is zero rated.
Do new builds in Portugal pay IMT?
Yes. The buyer pays IMT and 0.8% stamp duty on a new home as on any other, at the same rates, and the calculator treats new and resale homes alike.
Do first-time buyer reliefs apply to new builds?
Yes in England and Portugal, where reliefs depend on the buyer and the use of the home, not on its age. In Spain young-buyer and main-home reductions on a new build apply to the AJD stamp duty, not to VAT.
Sources
- VAT Notice 708: buildings and construction, section 4 (zero rated sale of new homes)GOV.UK (HM Revenue and Customs)
- Stamp Duty Land Tax: residential property ratesGOV.UK (HM Revenue and Customs)
- HM Land Registry: registration services feesHM Land Registry
- Ley 37/1992, del Impuesto sobre el Valor Añadido (VAT on new homes)Boletín Oficial del Estado (Spain)
- Real Decreto Legislativo 1/1993, Impuesto sobre Transmisiones Patrimoniales y Actos Jurídicos DocumentadosBoletín Oficial del Estado (Spain)
- Código do IMT, article 17 (rates)Autoridade Tributária e Aduaneira (Portugal)
- Decreto-Lei n.º 97/2026, de 20 de maio (article 10: reduced VAT on some new homes)Diário da República (Portugal)