Permits and licences to build a prefabricated house in Spain

Prefab houses in Spain

2 August 2021, 11:10

Prefabricated houses have become one of the most attractive options in the residential sector in Spain. Their fast construction, design and price are just some of the advantages that make them so popular. But what do you need to build a prefabricated house in Spain? Let's have a look at all the necessary permits and their costs.

Legislation for prefabricated houses in Spain

The first thing to know if you want to build a prefab house in Spain is that they are regulated under the same legislation as traditional constructions. That is to say, they fall under the Organic Law of Building Management (LOE) and the Technical Building Code (CTE).

On what land can a prefabricated house be built?

To build a modular home in Spain, it is necessary to do so on urban land. This is land included in the urban plan of a city or municipality and which has the permits and characteristics that mean you can build on it. These plots of land therefore have all the necessary services, and to this end, they must have a water supply and drainage network, electricity supply and road access. There are exceptions where building on rural land is permitted, but they are rare and have many limitations of use and size.

In order to build a prefabricated house on a plot of land in Spain, it is necessary to know the urban planning specifications of the plot. Each municipality has its own General Urban Development Plan and its own laws for structuring residential conditions, so it is necessary to request it from the corresponding local council. This includes the maximum heights, buildable metres and other issues to be taken into account. The requirements are the same for any type of house, regardless of how it is built. It is necessary to have all the permits, otherwise the house will be illegal.

Site inspections and surveys

Before building, a series of site surveys and inspections must be carried out to check the possibilities and feasibility of the project. These are:

Topographical study: outlines the geometry of the plot where the house is to be built. The price ranges of this between 250 and 400 euros.
Geotechnical study: shows the characteristics of the land and serves to design a suitable foundation. The average price is 725 euros.

Is a building permit necessary for a prefab house in Spain?

In the case of prefabricated houses, a building permit is not necessary, but planning permission is required. This licence costs between 0.5% and 2% of the final cost of the house.

What taxes do I have to pay to build a prefabricated house?

Before starting the building work, you have to pay the Tax on Construction, Installations and Works (ICIO), which is usually around 4% of the final cost of the work.
VAT must also be paid. For a private individual building his own house (self-promotion) it is 10%. This percentage will be paid month by month, as the work progresses.
Stamp Duty (Impuesto de Actos Jurídicos Documentados) must also be paid for the declaration of new construction, the cost of which is 1.5% of the total.

What insurance must be taken out to build a prefab house in Spain?

Waste Management and Occupation of Pavements: rather than insurance, this is a guarantee that must be returned at the end of the construction work if there are no issues. It is usually around 1% of the final cost, although this total depends on each municipality.
Ten-year insurance (optional): this insurance is not compulsory, unless the prefabricated house is to be sold within 10 years of its construction. The ten-year insurance covers damage caused to the building as a result of defects that appear in the construction and that directly affect its stability. In other words, if you are the promoter, you would be insuring against yourself, which makes little or no sense.

Certificate of habitability

When the prefabricated house is built, it must be standardised by applying for the certificate of habitability, known in Spain as the "Cédula de habitabilidad". This certificate serves to legitimise urban planning permits, the project and demonstrates that it is suitable for residential use. Its cost is minimal and not all communities require it, which is not the case with the licence of first occupation.

Licence of First Occupation

This is requested from the corresponding council when the building work has already been completed. It costs between 0.5% and 1% of the total price.

Property registration of a prefab home in Spain

Like all dwellings, prefabricated houses must be registered in the land registry in Spain. Registration is essential for renting or selling the house in the future, as on the website of the Spanish Registrars, anyone can find out all the information about a property: characteristics, owner, mortgage, etc. Notary and registrar fees are around 0.5% of the total value.