New-Build VAT vs Resale Transfer Tax: Which Actually Costs More, Country by Country (IVA, TVA, Registration Tax)
Published on: June 18, 2026
"New build or resale?" is usually framed as a lifestyle question, modern finishes versus character and location. But there's a tax answer hiding underneath it, and in some countries it flips the maths entirely. New builds carry VAT; resales carry transfer tax. They're never charged together. This is the country-by-country breakdown of which one actually costs you more, and the one detail (the tax base) that decides it.
The core rule: in these markets you generally pay either VAT (on a new build, the first transfer from a developer) or transfer/registration tax (on a resale), and typically not both on the same residential purchase. Edge cases exist. The headline rates look close. What separates them is what the tax is calculated on: the full purchase price (VAT) versus, in some countries, a much lower cadastral value (transfer tax).
Why this comparison matters
Most buyers budget for "about 10% in taxes" and move on. That's a mistake, because the new-vs-resale tax choice can swing the bill by tens of thousands of euros on the same property value, and not always in the direction you'd guess. A new build's VAT looks higher on paper; a resale's transfer tax sometimes lands lower because it's charged on a deflated cadastral value. The answer is genuinely country-specific. Here's how it falls in the three markets where the search intent is highest.
This sits alongside our broader global transfer tax and stamp duty comparison, which covers the resale side across more countries. This guide adds the new-build VAT angle that comparison doesn't.
Spain: 10% IVA vs 6–10% ITP
Spain is the cleanest case because both taxes are charged on the same base (the price), so the comparison is almost a straight rate-versus-rate.
New build (first transfer from a developer):
- IVA (VAT) at 10% on the price for residential property (21% for commercial premises, plots, and separately-sold annexes).
- Plus AJD (stamp duty) at a regional rate, typically 0.5%–1.5%.
- Combined, a new build costs roughly 10.5%–11.5% in purchase tax.
Resale (second-hand):
- ITP (transfer tax), set by each autonomous community, ranging 6%–10% (sometimes up to 11%).
- No VAT, no AJD.
- Examples: Andalucía a flat 7%; Madrid 6% up to €1m; Valencia 10%, dropping to 9% for properties under €1m from 1 June 2026 under Ley 5/2025.
Verdict for Spain: in low-ITP regions like Andalucía (7%) or Madrid (6%), resale is cheaper than the ~10.5%+ on a new build. In high-ITP regions like Valencia (9–10%), the two are roughly level. Note the tax base is the higher of the declared price or the cadastral reference value, since 2022 the reference-value system has closed the old under-declaration gap, so, as of 2026, under-stating the declared price generally will not reduce ITP, because tax is calculated on at least the cadastral reference value.
France: 20% TVA (already in the price) vs ~7–8% frais de notaire
France looks alarming until you realise the VAT is baked into the advertised price of a new build.
New build (neuf / VEFA off-plan):
- TVA at 20%, already included in the developer's quoted (TTC) price, you don't add it on top.
- Because VAT replaces the heavy transfer duties, the "frais de notaire" are sharply reduced to roughly 2–3%, with the transfer element falling to a taxe de publicité foncière of about 0.715%.
- A reduced 5.5% TVA can apply in designated urban-regeneration (ANRU) or priority zones for eligible buyers.
Resale (ancien):
- No VAT. Instead, droits de mutation (DMTO), the transfer tax, at roughly 5.8% historically.
- Following the Loi de Finances 2025, most départements (roughly 80+) raised their DMTO by 0.5 points between April 2025 and March 2028, pushing the total to about 6.3% in most areas (a handful hold the 5.09% floor or the historic 5.8%).
- Total frais de notaire on a resale run 7–8%.
Verdict for France: on transaction tax alone, the new build is dramatically cheaper, roughly 2–3% versus 7–8%, a gap of several percent of the price. But two caveats matter. First, the price itself already contains 20% VAT, so you're not escaping tax, you're paying it inside the sticker. Second, an off-plan buyer faces staged payments over 18–36 months, and currency movement over that build period can quietly erase the notaire-fee saving for a foreign buyer, a real risk worth hedging. (Investors in serviced-residence leaseback schemes can sometimes reclaim the VAT, changing the calculus again.)
Italy: the cadastral-value advantage that flips the answer
Italy is where the "which is cheaper" question has the most counter-intuitive answer, because the two taxes are charged on different bases.
New build (from a developer / VAT-registered builder, within 5 years of construction):
- IVA (VAT) on the purchase price: 4% for a primary residence (prima casa), 10% for a second home, 22% for luxury property.
- Plus fixed registration, mortgage, and cadastral taxes of €200 each.
Resale (from a private seller):
- Imposta di Registro (registration tax) of 2% (prima casa) or 9% (second home), but charged on the cadastral value (under the prezzo-valore scheme), which is frequently well below the market price.
- Plus fixed mortgage and cadastral taxes of €50 each; a minimum registration tax of €1,000 applies.
Verdict for Italy: this is the trap. A new build's 10% second-home VAT is charged on the full price; a resale's 9% registration tax is charged on the cadastral value, which can be a fraction of the market price. So even though the rates (10% vs 9%) look almost identical, the resale is often substantially cheaper in cash terms because its tax base is smaller. For a €300,000 Milan resale with a cadastral value of, say, €130,000, the 9% applies to €130,000, not €300,000. A new build at the same price would be taxed at 10% on the full €300,000.
One more Italian wrinkle for foreign buyers: non-residents generally cannot claim prima casa rates (2% registration / 4% VAT) unless they meet the conditions described, typically registering residency in the property's municipality within 18 months, so most foreign investors default to the higher second-home rates (9% / 10%).
Side-by-side summary
The figures below are indicative for 2026 and move with regional rules.
| Country | New build (VAT) | Resale (transfer tax) | Tax base difference | Who usually wins |
|---|---|---|---|---|
| Spain | 10% IVA + 0.5–1.5% AJD (~10.5–11.5%) | 6–10% ITP (region-dependent) | Both on price (higher of price/reference value) | Resale in low-ITP regions (Andalucía, Madrid); level in high-ITP regions |
| France | 20% TVA in the price + ~2–3% frais de notaire | ~6.3% DMTO + total 7–8% frais de notaire | Both on price | New build on transaction tax, but VAT is already inside the price |
| Italy | 4/10/22% IVA on price + €200 fixed | 2/9% registration on cadastral value + €50 fixed | New = price; resale = (lower) cadastral value | Resale in cash terms, thanks to the cadastral base |
How to actually decide
- Identify the property type correctly. "New build" legally means a first transfer from a developer (in Italy, generally within 5 years of construction). A unit marketed as "new" but legally a resale follows resale rules, so confirm the legal classification, not the marketing.
- Check the tax base, not just the rate. In Italy especially, the cadastral value can make a 9% resale cheaper than a 10% new build. In Spain, both are on price, so rate is what matters.
- Factor the region. Spain's ITP and AJD, and France's DMTO, vary by autonomous community and département. A few points either way is real money.
- For new builds, model the timeline and currency. Off-plan staged payments expose foreign buyers to FX risk that can dwarf the headline tax saving.
- Look beyond purchase tax. New builds often bring energy-efficiency savings and, in France, a temporary taxe foncière exemption; resales may need renovation. The purchase-tax comparison is one input, not the whole decision.
Frequently asked questions
Do you pay VAT or transfer tax when buying property in Spain?
You pay 10% VAT (IVA) plus stamp duty (AJD) on a new build bought from a developer, or transfer tax (ITP) of 6–10% on a resale. Never both, it's one or the other, determined by whether the property is new or second-hand.
Is VAT charged on new-build property in France?
Yes, 20% TVA, but it's already included in the developer's advertised (TTC) price. Because VAT replaces transfer duty, the notaire fees on a new build drop to about 2–3%, versus 7–8% on a resale.
Is a new build or a resale cheaper on tax in Italy?
Often the resale, in cash terms. A new build's VAT (10% for a second home) is charged on the full price, while a resale's registration tax (9%) is charged on the cadastral value, which is usually well below market value.
Why do new builds and resales have different taxes?
A new build is a commercial first sale by a developer, so it attracts VAT. A resale is a transfer between owners, so it attracts transfer/registration tax instead. The systems are mutually exclusive.
Do non-residents pay higher property purchase tax?
In Spain and France, purchase-tax rates are generally the same regardless of residency. In Italy, non-residents usually can't claim the reduced prima casa rates and default to the higher second-home VAT/registration rates.
Compare buying costs across the map
The new-vs-resale tax question is one line in a much larger buying budget. Compare buying costs and taxes across 50+ markets with country-level intelligence on JanusHermes before you budget your purchase.
This article is general information for international buyers and not tax or legal advice. Property tax rates, bases, and regional rules change frequently, Spain's regional ITP/AJD and France's DMTO in particular were in flux through 2025–2026. Confirm the current rates for your specific region and property classification with a qualified local tax adviser or lawyer before budgeting.
A note on the numbers: where no source is named, the market figures in this article (prices, yields, costs) are indicative estimates compiled from publicly available market data and industry reporting at the time of writing. Markets move and rules change, so treat them as a starting point and verify current figures with official sources before acting on them.
