New Build vs Resale: A Critical Choice
One of the biggest decisions when buying property in Spain is whether to go for a brand-new development or an existing resale property. Each option has distinct financial, legal and practical implications that can significantly affect your total cost and experience.
Tax Differences
This is where the two options diverge most sharply:
- New build: You pay 10% IVA (VAT) plus 1.2% AJD (stamp duty) in Andalusia. Total tax: approximately 11.2%.
- Resale: You pay 7% ITP (transfer tax) in Andalusia. No VAT applies.
On a 300,000 EUR property, the tax difference is significant: 33,600 EUR for new build versus 21,000 EUR for resale. That is 12,600 EUR more for a new property before you even consider the higher base price.
Price Comparison
New build properties typically cost 15 to 30% more than comparable resale homes in the same area. A two-bedroom apartment in Estepona might cost 280,000 EUR as a resale and 350,000 EUR in a new development. However, new builds often include modern amenities, better energy efficiency and up-to-date building standards.
Advantages of New Build
- Customization: Buy off-plan and choose your finishes, kitchen layout and flooring.
- Warranty: Spanish law provides a 10-year structural warranty, 3-year installations warranty and 1-year finishing warranty.
- Energy efficiency: Modern insulation, double glazing and aerothermal heating systems reduce running costs.
- No renovation needed: Move in with everything new and functioning.
- Modern layouts: Open-plan kitchens, larger terraces and underground parking.
Advantages of Resale
- Lower total cost: Both the base price and taxes are lower.
- Established locations: Resale properties are in mature neighbourhoods with shops, restaurants and transport already in place.
- What you see is what you get: No risk of construction delays or developer insolvency.
- Negotiation room: Sellers are often willing to negotiate 5 to 15% off the asking price.
- Immediate availability: No waiting 18 to 24 months for construction to finish.
Off-Plan Risks
Buying off-plan carries specific risks. Developers can delay delivery by months or even years. In rare cases, developers go bankrupt. Spanish law requires developers to provide a bank guarantee or insurance policy protecting your deposits. Always verify this guarantee exists before paying anything.
Which Should You Choose?
Choose new build if you want modern design, energy efficiency and are willing to wait. Choose resale if you want lower costs, immediate availability and established surroundings. Use our free calculator to estimate your total costs for both scenarios and compare them side by side.