New-Build vs Resale Property in Spain

The tax treatment is one of the most significant differences between new-build and resale purchases in Spain, and it catches many UK buyers off guard.

New-build (first transfer from developer):

• IVA (VAT) at 10% of the purchase price
• AJD (Actos Jurídicos Documentados — stamp duty) at 1.2% in Andalucía (recently reduced from 1.5%)
• Total tax: approximately 11.2%

Resale (second or subsequent transfer):

• ITP (Impuesto sobre Transmisiones Patrimoniales — transfer tax) at 7% in Andalucía for properties under €400,000, rising to 8–10% for higher values (the rate increases in bands)
• No IVA, no AJD

For a €350,000 property, the new-build tax bill would be approximately €39,200, while the resale ITP would be €24,500 — a difference of nearly €15,000. This is a substantial saving that partly offsets the often lower price-per-square-metre of resale properties.

Use our purchase cost calculator to compare the total acquisition costs side by side.

New-build properties in Spain benefit from the Ley de Ordenación de la Edificación (LOE), which mandates three levels of warranty from the developer:

• 1 year: coverage for cosmetic and finishing defects (paintwork, tiling, fixtures)
• 3 years: coverage for defects affecting habitability (plumbing, electrics, damp, insulation)
• 10 years: coverage for structural defects (foundations, load-bearing walls, roof structure)

These warranties are backed by mandatory insurance — the developer must take out a seguro decenal (10-year structural insurance policy) before handing over the property. This gives new-build buyers meaningful legal protection that simply does not exist for resale purchases.

Resale properties come “as seen.” While your lawyer should commission a survey or valuation, there is no statutory warranty. Any defects discovered after purchase are your responsibility unless the seller deliberately concealed them (which is difficult to prove). For older resale properties, budget for potential works — updated electrics, plumbing, or a new boiler — particularly in properties built before the 2006 building code (Código Técnico de la Edificación).

If you buy a new-build off-plan (before construction is complete), Spanish law requires the developer to protect your stage payments with either a bank guarantee (aval bancario) or an insurance policy. Under Law 38/1999 (LOE) and the revised Law 20/2015, any advance payment you make during construction must be held in a designated account and backed by a guarantee that refunds your money plus interest if the developer fails to deliver.

Before making any payment, your lawyer should verify:

• The bank guarantee or insurance policy exists and names you as beneficiary
• The developer has a valid licencia de obras (building licence)
• The development has planning approval from the town hall

With resale, there is no off-plan risk — you can see exactly what you are buying. Completion can happen within 4–8 weeks of signing the deposit contract, compared with 12–24 months (or longer) for off-plan new-builds.

The trade-off is clear: new-builds carry timeline risk but offer legal payment protection; resales are immediate but offer no construction-phase guarantees.

Modern new-build properties on the Costa del Sol are typically built to the latest Código Técnico de la Edificación (CTE) standards, which mandate:

• High-performance double or triple glazing
• Thermal insulation in walls and roofs meeting specific U-value thresholds
• Hot water systems incorporating renewable energy (solar thermal panels)
• LED lighting and energy-efficient communal systems
• Aerothermal (heat pump) heating and cooling — increasingly standard in 2025–2026 developments

The result is that most new-builds achieve an energy efficiency rating of A or B, compared with D, E, or even F for many resale properties. This translates directly into lower electricity bills — potentially €50–€150 per month less in summer when air conditioning runs constantly.

Resale properties can be retrofitted with improved insulation, double glazing, and efficient HVAC systems, but this adds cost (€5,000–€20,000+ depending on the property) and disruption. Factor this into your comparison when weighing a cheaper resale against a more expensive but “turn-key” new-build.

Here is a detailed comparison across the criteria that matter most to UK buyers:

Snagging is the process of identifying defects and unfinished items before (or shortly after) taking possession of a new-build property. On the Costa del Sol, snagging issues are extremely common — even with reputable developers — and UK buyers should approach handover with a systematic checklist.

Typical snagging issues include:

• Hairline cracks in plaster or render (often due to rapid drying in the Mediterranean heat)
• Poorly aligned doors, windows, or kitchen cabinets
• Scratched glass, damaged tiles, or uneven grouting
• Plumbing leaks under pressure testing
• Defective air conditioning units or incomplete ducting
• Incomplete communal areas (gardens, pools, parking)

You have the right to conduct a thorough inspection before signing the handover certificate. Many buyers hire a professional snagging inspector (around €300–€500) to produce a detailed report. The developer is legally obligated to rectify any items covered by the 1-year finishing warranty, though timelines vary — budget for some patience.

Tip: do not sign the handover certificate (acta de entrega) until all critical defects are documented in writing. Once signed, it becomes harder to compel the developer to address issues.

One of the most underappreciated differences between new-build and resale is location. New developments tend to be built where land is available and planning permits are granted — which often means slightly outside established town centres or on the outskirts of popular areas. Resale properties, by contrast, are available in the most sought-after, walkable locations where there is simply no land left for new construction.

Consider the following trade-offs:

• If you want to be in the heart of a town (e.g. Estepona Old Town, Fuengirola centre, Nerja), resale is usually your only option
• If you want modern amenities and communal facilities (resort-style pools, gyms, co-working spaces), new developments offer this as standard
• If you plan to rent to tourists, both options work — modern new-builds photograph well on listing sites, but characterful resales in prime locations also command premium rates
• If you are retiring permanently, walkability to shops, restaurants, and medical facilities often favours established resale locations

There is no universally “better” option — it depends entirely on your priorities, budget, and how you intend to use the property. Many UK buyers view both types on their viewing trip before deciding. The comparison table above and our calculator can help you run the numbers side by side.