diff --git a/server/mergin/sync/public_api_v2_controller.py b/server/mergin/sync/public_api_v2_controller.py
index e7806865..823d6e5f 100644
--- a/server/mergin/sync/public_api_v2_controller.py
+++ b/server/mergin/sync/public_api_v2_controller.py
@@ -234,10 +234,6 @@ def create_project_version(id):
     v_next_version = ProjectVersion.to_v_name(next_version)
     version_dir = os.path.join(project.storage.project_dir, v_next_version)
 
-    pv = project.get_latest_version()
-    if pv and pv.name != version:
-        return ProjectVersionExists(version, pv.name).response(409)
-
     try:
         ChangesSchema().validate(changes)
         upload_changes = ChangesSchema().dump(changes)
@@ -283,6 +279,10 @@ def create_project_version(id):
     if requested_storage > project.workspace.storage:
         return StorageLimitHit(current_usage, project.workspace.storage).response(422)
 
+    pv = project.get_latest_version()
+    if pv and pv.name != version:
+        return ProjectVersionExists(version, pv.name).response(409)
+
     # we have done all checks but this request is just a dry-run
     if request.json.get("check_only", False):
         return NoContent, 204
diff --git a/server/mergin/tests/test_public_api_v2.py b/server/mergin/tests/test_public_api_v2.py
index 56caa7ff..976ffe86 100644
--- a/server/mergin/tests/test_public_api_v2.py
+++ b/server/mergin/tests/test_public_api_v2.py
@@ -1079,6 +1079,41 @@ def test_create_version_failures(client):
         assert response.status_code == 409
 
 
+def test_create_version_permanent_error_takes_priority(client):
+    """Permanent errors (e.g. storage limit) must be reported before a
+    version conflict, otherwise clients would rebase/retry an upload that
+    is bound to fail anyway."""
+    project = Project.query.filter_by(
+        workspace_id=test_workspace_id, name=test_project
+    ).first()
+
+    data = {
+        "version": "v0",
+        "changes": _get_changes_without_added(test_project_dir),
+        "check_only": True,
+    }
+    with patch.object(
+        Configuration,
+        "GLOBAL_STORAGE",
+        0,
+    ):
+        response = client.post(f"v2/projects/{project.id}/versions", json=data)
+        assert response.status_code == 422
+        assert response.json["code"] == StorageLimitHit.code
+
+    # same must hold for the real (non check_only) upload
+    data["check_only"] = False
+    with patch.object(
+        Configuration,
+        "GLOBAL_STORAGE",
+        0,
+    ):
+        response = client.post(f"v2/projects/{project.id}/versions", json=data)
+        assert response.status_code == 422
+        assert response.json["code"] == StorageLimitHit.code
+    assert project.latest_version == 1
+
+
 def test_upload_chunk(client):
     """Test pushing a chunk to a project"""
     project = Project.query.filter_by(