How much does it cost to build a house in Madrid?
The only calculator that adds up every real cost: construction, professional fees, your specific town hall’s taxes, associated costs and the land.
Your project
| Item Each amount, with its VAT | Good standard | High standard + interior design |
|---|
How this is worked out
What is NOT included
The interest on a self-build mortgage during the months of construction. The money is released against progress certificates, and that interest is real money.
Stamp duty on the new-build deed and on the declaration of completed works.
The first-occupation permit, which runs from 32 € in Pozuelo de Alarcón to more than 1,500 € in Las Rozas for the same budget. Yes, that is the real spread between two neighbouring municipalities.
The extra cost of a difficult plot: steep slopes, rock, a high water table or retaining walls. The soil survey shows this, which is why it is done before anyone designs.
We will send you the breakdown as a PDF
And if you give us the land registry reference of your plot, we will tell you how many square metres you may build on it and whether anything is going to cause problems — before you spend a euro on a design.
Why the construction budget is never the final cost
When someone asks what it costs to build a house, the answer they get is almost always the price of the construction work. For a designed house to a good standard that is around 1.800 €/m²; with interior design and luxury finishes, from 2.500 €/m². That figure is true, and it is half the answer.
The other half is six blocks that do not appear in that figure: VAT, the professional team, what the town hall takes, the off-plot works, the works inside the plot and the contingency. On a 300 m² house in Las Rozas that means 540,000 € of construction that ends up well above 800,000 € with a pool and a kitchen. Nobody gets that shock on purpose: they get it because nobody told them at the start.
What your town hall takes is not the same in every municipality
This is the item that surprises people most, because it can double between two towns fifteen minutes apart. ICIO — the tax on construction, installations and works — has a legal maximum of 4 %, but each town hall sets its own, and many add a permit fee on top.
| Municipality | ICIO | Permit fee | Total on the construction budget |
|---|---|---|---|
| Galapagar | 3,5 % | 1,8 % | 5,3 % |
| Madrid capital | 3,75 % | — | 3,75 % |
| Las Rozas de Madrid | 4 % | 0,84 % | 4,84 % |
| Boadilla del Monte | 4 % | 1,5 % | 5,5 % |
| Alcobendas | 4 % | ≈1,5 % | ≈5,5 % |
| Pozuelo de Alarcón | 4 % | 2 % | 6 % |
| Majadahonda | 4 % | 3 % | 7 % |
On a construction budget of 500,000 €, building in Majadahonda instead of the city of Madrid is 16,250 € more in municipal taxes alone. It is no reason to choose where you live, but it is a reason to know before you fix your numbers.
A technical detail almost no calculator gets right: the ICIO base is the bare construction cost and, under article 102.1 of the Local Finance Act, it excludes VAT, fees, professional fees and the contractor’s profit. Applying it to the budget including overheads inflates it by 19 %. And ICIO is a tax: there is no VAT on top of it.
The five mistakes that cost the most
1 · Buying the materials yourself
Construction work on a home is taxed at 10 % VAT. Materials you buy yourself are taxed at 21 %. With materials making up about half the budget, saving the builder’s margin by buying them yourself costs you around 11 points of VAT on that half. On a 500,000 € job that is around 27,500 € thrown away.
2 · Forgetting the off-plot works
Boundary walls, access, paving, landscaping and retaining walls are not in the house’s €/m². On an ordinary plot they run 15,000 to 40,000 €; on a sloping one, considerably more.
3 · Assuming utility connections and site works are free
This is the most variable item in the whole budget. Two plots on the same street can differ tenfold depending on the distance to the existing mains. That is why the calculator leaves it blank: any default value would be a lie.
4 · Setting aside 5 % of the wrong number
Almost everyone sets aside 5 %… of the construction cost. But the real budget includes fees, taxes and site works, so that 5 % works out at 2 % of the total: half of what you need when the unexpected turns up. A sensible contingency is 10 % of the construction cost, which is around 7 % of the full budget.
5 · Buying the plot before knowing what may be built on it
The buildable floor area, the maximum footprint, the setbacks and the eaves height are set by the municipal plan, not by the seller. It is the most expensive mistake on this list because there is no fixing it: if the plot will not take what you wanted, you have already bought it.
And how long does it take?
It is the second question everyone asks, and the honest answer includes the months nobody counts:
- Concept and outline design: 1 to 3 months.
- Building permit: 3 to 8 months depending on the town hall. This is the stretch that throws everyone, and it does not depend on the architect.
- Detailed design: overlaps with the permit.
- Construction: 10 to 16 months for a detached house.
- First occupation and utilities: 1 to 2 months.
In total, 18 to 27 months from commissioning the design to moving in. Anyone promising much less is either not counting the permit or has never applied for one.
Frequently asked questions
Is building cheaper than buying?
It depends almost entirely on the land. If you already own the plot, building usually works out better per m² and you get a house made for you. If you have to buy it, the land can be 30-50 % of the total and the sums get tight.
Is ten-year structural insurance compulsory?
Not if you are an individual self-builder of a single home for your own use: that is set out in the second additional provision of Law 38/1999. But if you sell within ten years you will have to take it out retroactively, and the Land Registry will not register the sale without it. Taking it out afterwards, with no technical supervision from the start of the works, is far more expensive and sometimes simply impossible.
What does the bank ask for on a self-build mortgage?
Banks lend against the bare construction cost, not against the finished value of the house, and they release the money against progress certificates. Which means you need savings for the land and for the early stages. That is the main difference from an ordinary mortgage, and it is worth being clear about before signing anything.
What is the “presupuesto de ejecución material”?
The cost of materials and labour, without overheads, without contractor’s profit and without VAT. It is the figure ICIO, the permit fees and the professional fees are calculated on, and the one this calculator uses. It is not the same as a “turnkey” price, which is usually 30-40 % higher because it includes different things.
Sources. ICIO rates and permit fees: municipal tax ordinances in force, verified one by one. Where a fee could not be verified, the tool says so and does not calculate it. ICIO tax base: art. 102.1 of the consolidated Local Finance Act, which excludes VAT, fees, professional fees, overheads and the contractor’s profit. VAT: art. 91.Uno.3.1º of Law 37/1992 (10 % on construction work for housing; 21 % on services and on supply of goods). Ten-year insurance: Law 38/1999, second additional provision — not required of an individual self-builder of a single home for their own use, unless it is sold within ten years.
Last reviewed: August 2026. Municipal rates are reviewed every January.