Chapter

New build or resale: how the two purchases differ

§ 1Two purchases, two legal routes

The AEAT explains the dividing line. A first sale of a new home by the developer is subject to VAT, while a home sold by an earlier owner, or a used home sold by a business, is subject to the regional transfer tax instead. The registrars add that the stamp duty on documents applies to new homes alongside VAT, and that the transfer tax varies by region. The rate of VAT on new homes is 10%, and the rates for the other taxes are in the costs and taxes section.

The tax is only the visible difference. The legal route changes who carries the risk of defects and who is protected if something goes wrong, and those differences are the real reason to decide which route you want.

§ 2Resale

In a resale the seller is usually a private owner. The main risks are in the history of the property: charges on the registry entry, unpaid community fees and defects nobody mentioned. The notaries say the seller remains liable for defects that are not obvious unless the buyer releases them, so check what any release clause removes. Buying a resale property sets out the checks and the usual order.

§ 3New build

When a developer sells, the building law gives the buyer defined guarantees. The law sets liability periods of one, three and ten years for finishing defects, habitability defects and structural defects, and it requires a ten-year guarantee on the structure of housing. Buying a new build explains the contract, the licence and the documents a developer must hand over.

Two further pages deal with the protections: the ten-year warranty and snagging and handover, which covers what to check on the day you receive the keys.

§ 4Off plan

Buying before the home exists means paying before you can see it. The law requires developers who collect advance payments to guarantee their refund from the date the building licence is obtained, and to hold the money in a separate account used only for that home. Buying off plan describes how an off-plan sale proceeds, and bank guarantees on off-plan payments explains what the guarantee covers and how to ask for it.

The registrars advise checking, before any deposit, the developer's registration, its ownership of the land and the building licence. What can go wrong if those checks fail is the subject of developer risks, which also explains what a buyer can do if a developer becomes insolvent.

§ 5A route in between

Some buyers join a housing cooperative that builds homes for its members. Buying through a cooperative explains how a cooperative differs from a developer sale, because the members share the risk of the build.

§ 6How to decide

Start from your plans and your tolerance for risk, not from the price. A buyer who wants to move in soon, with the fewest unknowns, often prefers a finished home. A buyer who accepts a wait for a home built to modern standards may prefer new. The decision interacts with your purpose and the structure of the purchase, so read matching the purchase to your plans and how to structure a purchase alongside this page.

If you are not yet sure that you want to buy, weighing up a purchase comes first. For the legal position of the buyer, foreign buyers' eligibility applies equally to both routes.

§ 7Where this fits

The choice between new and resale shapes the steps that follow, and the steps from viewing to keys shows where each route differs. The section overview for how buying works in Spain lists the other decisions and keeps them in order.

§ 8Comparing the two on one sheet

To compare a resale and a new build fairly, put both on the same sheet. For each, write the price, the tax that applies to it, the notary and registry costs, the cost of any work needed and the date you could use the home. Then add the protections: for a resale, the seller's liability for non-obvious defects; for a new build, the liability periods and the ten-year structural guarantee. For an off-plan home, add the guarantee on advance payments and the date of completion.

The sheet shows where the difference lies in money and in time. Often the apparent saving on one side is balanced by a cost or a risk on the other, and the choice then depends on how much waiting and how much uncertainty you are willing to accept.

§ 9Questions to put to either seller

Ask each seller who owns the home, what charges it carries, what is included in the price, what documents exist and who will draft the deed. Ask for answers in writing. A resale seller who cannot produce basic papers and a developer who will not show the licence are in the same position: you have learned something before paying anything.

§ 10Why the choice matters early

Choose between new and resale before you fall for a particular home, because the choice changes the tax, the checks, the timetable and the people you deal with. A buyer who starts with a new build and switches to a resale halfway through has to redo the budget and the checks. A buyer who knows in advance which route fits finishes sooner and with fewer surprises.

Tax note. Rates depend on the region, the type of property and the buyer, and they change. Figures here are dated and sourced; examples are illustrative and show their assumptions. Confirm yours with the regional tax agency or a tax adviser.