Is new build or resale better for buying property in Spain?
New build property offers modern specifications, full developer warranty, and no transfer tax, while resale can offer better immediate value and faster completion. The choice depends on your timeline, budget, and purpose.
- 1New build incurs VAT at 10% plus 1.5% AJD; resale incurs ITP transfer tax at 7% to 10%
- 2New build carries a 10-year structural warranty and 3-year building elements warranty
- 3Resale completes faster, typically within weeks of signing contracts
- 4New build offers the opportunity to buy at launch prices and benefit from price appreciation during construction
- 5Resale allows you to physically inspect the property before committing
Key Takeaways
- New build incurs higher taxes than resale but carries full warranties
- Off-plan reservation enables appreciation during construction in rising markets
- Resale suits buyers who need speed and want to physically inspect before buying
- Both types have strong resale markets; the choice is primarily about timing, risk, and purpose
New-build and resale properties serve different buyer needs and carry different financial profiles. New build in Spain incurs 10% VAT plus 1.5% AJD stamp duty, whereas resale incurs 7% to 10% ITP transfer tax depending on the region. New build comes with a 10-year structural defects warranty and a 3-year warranty on building elements, making it significantly lower risk for hidden defects. Resale allows you to see exactly what you are buying and typically completes faster, often within 4 to 8 weeks of signing the private purchase contract. For investment purposes, new-build in a growth area has historically delivered stronger appreciation from reservation to completion.
Tax differences between new build and resale
The tax treatment is a key practical difference. New-build properties in Andalucia incur 10% VAT plus 1.5% AJD totalling approximately 11.5% of the purchase price in taxes. Resale properties incur ITP transfer tax at 7% for properties up to 400,000 euros, with higher rates applying above that threshold. For a 400,000 euro property, new build tax is approximately 46,000 euros versus 28,000 euros for resale. The gap is significant and should be factored into your total budget.
Warranty and defect protection
New-build properties in Spain are legally required to carry a 10-year insurance policy covering structural defects, a 3-year warranty on building systems and habitation defects, and a 1-year warranty on finishing defects. Resale properties have no equivalent protection: you are buying the property in its current condition, which makes a thorough independent survey essential.
Timing and practical differences
Resale property can often complete within 4 to 8 weeks of agreeing terms, which suits buyers who need to move quickly or want immediate rental income. New build typically involves a reservation, a construction period of 18 to 30 months, and completion when the property receives its First Occupancy Licence. This timeline suits investors who can lock in current pricing and do not need immediate occupation or income.
Value and appreciation
Historically, off-plan new-build properties reserved at launch prices have delivered 10% to 25% capital appreciation by the time they complete, in active market conditions. Resale properties do not carry this built-in appreciation opportunity but can offer better immediate value if purchased at a discount to market in a motivated sale.
Common Mistakes to Avoid
A buyer has a 350,000 euro budget. Option A is a new-build apartment at 320,000 euros with buying costs of approximately 37,000 euros completing in 24 months. Option B is a resale apartment at 310,000 euros with buying costs of approximately 25,000 euros completing in 6 weeks. The buyer needing immediate rental income chooses resale. A second buyer with the same budget but no income urgency chooses new build, locking in launch pricing with the expectation of appreciation by completion.
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