Choosing between a new build and a resale property has very different implications for tax, finance and yield. Here's an honest side-by-side analysis.
The tax differences
New build: 10% IVA (Spanish VAT) on residential homes. Resale: ITP (Impuesto de Transmisiones Patrimoniales, the property transfer tax) of between 6% (Madrid) and 10-11% (Catalonia). Total costs on a resale are usually 8-12% of the price.
Price and room to negotiate
New builds usually have a fixed price with very little room. Resales have much more, especially flats that have been on the market for a while or owners in a hurry.
Construction guarantees
New builds come with statutory guarantees of 1, 3 and 10 years (under the LOE, the Ley de Ordenación de la Edificación, Spain's Building Act). Resales only have the 6 months for hidden defects under the Civil Code.
Which suits each profile
For a first home: A new build if the price is affordable: no pending refurbishment and high energy efficiency. For investment (letting or flipping): A resale, especially auction properties or bank repossessions, with a bigger potential discount.
Discounted resale assets: Explore bank repossessions and court auctions on RadarPro.
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