Spain's proposed 100% surcharge on non-EU, non-resident property buyers has not become law and is currently stalled in Congress as of June 2026. Crucially, the surcharge was structured around the ITP resale transfer tax — not IVA (VAT), which applies to new build purchases. Off-plan buyers may fall outside its scope even if it is eventually enacted.
When Spain's Prime Minister announced a proposed 100% surcharge on property purchases by non-EU, non-resident buyers in January 2025, international investors paid attention. The headline number was alarming. The reality — particularly for new build buyers — is considerably more nuanced.
As of June 2026, the measure has not been passed into law. It failed to secure a parliamentary majority and has no confirmed timetable. But beyond the current political stalemate, there's a structural detail about how the surcharge was designed that matters directly to off-plan investors: it was framed as an addition to the ITP (Impuesto de Transmisiones Patrimoniales) — the transfer tax that applies to resale property. New build purchases are subject to IVA (VAT), not ITP. This distinction could make new build buyers structurally exempt from the measure, even in the event it is eventually enacted.
This article explains what was actually proposed, what the tax mechanism means for new build buyers, and what investors considering Costa Blanca off-plan purchases should factor into their decisions.
What Was Actually Proposed — and Why It Hasn't Passed
The January 2025 announcement described a surcharge of up to 100% of purchase price for buyers who meet two conditions: (1) they are non-EU nationals, and (2) they are not resident in Spain. The measure was explicitly framed as targeting speculative foreign demand — particularly in Barcelona, the Canary Islands, and the Balearics — rather than buyers seeking residence.
Since the announcement, the measure has stalled for several reasons:
Political arithmetic: Spain's minority government requires coalition support it hasn't secured for this legislation. Multiple coalition partners have declined to back it.
Constitutional uncertainty: Legal experts questioned whether a nationality-based tax differential conflicts with EU single market principles and Spain's bilateral investment treaties.
Regional opposition: The Valencian Community (Costa Blanca), Murcia, and Andalucia governments all formally opposed the measure, arguing the economic impact on construction employment and regional property revenues would be severe.
The proposal remains on the government's agenda but has not progressed, and a general election would reset its trajectory entirely.
The ITP vs IVA Distinction: Why New Build Is Different
This is the detail that most coverage of the proposed surcharge missed — and it matters significantly for off-plan investors.
Spain's property purchase taxes operate on a binary:
The proposed surcharge was structured as an additional percentage on top of ITP — the resale tax. The rationale was that speculative foreign buying was primarily occurring in the resale market, driving up prices for local residents. New build developments, by contrast, were seen as adding supply to the market rather than competing for existing stock.
This means that even if the surcharge were enacted in its original form, buyers purchasing directly from a developer on a new build or off-plan basis would pay IVA (10%) rather than ITP and would not be subject to the surcharge. The legal mechanism simply doesn't apply to IVA transactions.
Important caveat: Legislative text matters. If the law were revised before or after passage to also apply a surcharge on IVA transactions, this distinction would not hold. Buyers should monitor the actual legislative text if and when it is reintroduced — a tax adviser can track this. But the original proposal as drafted does not target new build.
EU Buyers: No Risk Regardless
For EU-national buyers — including buyers from Sweden, Norway, Denmark, Finland, Germany, the Netherlands, Belgium, and all other EU member states — the proposed surcharge carries zero legal risk.
EU citizens benefit from free movement rights within the single market. Any measure that applies a higher tax to purchases by EU nationals compared to Spanish nationals would violate EU Treaty provisions on free movement of capital (Article 63 TFEU). The Spanish government explicitly limited the proposal to non-EU nationals for this reason.
Scandinavian buyers — the fastest-growing buyer segment on the Costa Blanca, up 38% in transaction volume in Q1 2026 — are therefore entirely unaffected by this legislative question, now or in any plausible future version of the measure.
This is a meaningful data point for developers and investors assessing Costa Blanca new build demand. The buyer segments driving current growth — Scandinavian, Dutch, Belgian, German — face no legal uncertainty from this proposal.
What This Means for Non-EU Investors Buying Off-Plan
For British buyers (non-EU post-Brexit) and buyers from outside the EU/EEA who are not Spanish residents, the picture is:
Today (June 2026): No additional surcharge exists. Purchases proceed under standard tax rules — 10% IVA on new build, plus AJD (stamp duty) and notarial costs, total approximately 12–13%.
If the surcharge is eventually enacted in its current form: New build buyers purchasing from developers on IVA terms are likely outside its scope. The structural protection of purchasing new build versus resale is real.
Residency eliminates the risk entirely: Non-EU buyers who obtain Spanish residency before completing a purchase are explicitly excluded from the proposal's scope — residency is one of the two qualifying conditions. For buyers planning to spend meaningful time in Spain, obtaining a non-lucrative visa, digital nomad visa, or golden visa removes all exposure.
The Costa Blanca regional dimension: The Valencian Community (which covers the Costa Blanca) has been among the most vocal opponents of the national proposal. Even if national legislation passes, regional implementation dynamics matter. The regional government's opposition suggests a less aggressive enforcement environment, and some regional tax variation mechanisms could apply.
For non-EU investors whose primary interest is capital appreciation and rental yield — rather than lifestyle use — the off-plan model already provides structural advantages in this environment: the built-in appreciation margin from development timelines, the leverage of staged payments, and now a potential tax-structure advantage versus resale.
Practical Checklist for Non-EU Buyers in 2026
If you're a non-EU buyer considering a Costa Blanca new build purchase:
1. Confirm new build status with your legal adviser. Ensure the purchase is from a developer on IVA terms, not a resale with ITP. Your Spanish solicitor (abogado) will confirm the tax classification in the private purchase contract.
2. Assess the residency route. Obtaining Spanish residency before completion removes all surcharge risk regardless of what legislation is eventually passed. Options include: non-lucrative visa (passive income/savings requirement), digital nomad visa (remote income), and the golden visa for purchases above €500,000 (still available as of June 2026 despite government proposals to phase it out).
3. Get a Spanish tax adviser involved early. Cross-border tax advice should cover: IVA treatment confirmation, rental income tax obligations (non-residents pay 19% or 24% IRNR on rental income depending on EU/non-EU status), and inheritance tax planning.
4. Monitor the legislation. If the surcharge is reintroduced with a new coalition agreement or after an election, the critical question will be whether revised drafting extends to IVA transactions. A Spanish solicitor tracking BOE publications will give you advance notice.
5. Factor total acquisition costs correctly. New build: 10% IVA + ~1.5% AJD + ~1.5% notarial/registry = ~13% total on top of purchase price. Budget for this in your financial modelling.
Conclusie
The proposed 100% non-EU property surcharge has attracted far more alarm than its actual legislative status warrants. It hasn't passed. It has no timetable. And even if it did pass in its current form, new build buyers purchasing directly from developers on IVA terms are likely outside its scope — because the measure targets the ITP resale mechanism, not new build VAT.
For EU buyers — the majority of Costa Blanca international demand — there is no risk whatsoever, now or in the future. For non-EU buyers, the combination of new build tax structure and the residency route provides two independent paths to eliminating exposure.
The Costa Blanca new build market's Q1 2026 performance — prices up 18.3%, transaction volumes at a post-2008 record — suggests that serious buyers are not being deterred by the legislative noise. Browse our current off-plan developments or get in touch to discuss the tax-efficient routes to your Costa Blanca purchase.
Veelgestelde vragen
1Is Spain's 100% property surcharge on non-EU buyers now law?▼
2Are new build purchases exempt from the proposed surcharge?▼
3Do EU citizens (Swedish, German, Dutch buyers) need to worry about this?▼
4How can non-EU buyers protect themselves from this risk?▼
5What taxes do non-EU buyers currently pay on Spanish new builds?▼
6Is the Spanish golden visa still available to non-EU buyers?▼
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