New-Build vs Resale Property: Differences, Taxes and Procedures

When the time comes to buy a home, one of the first decisions is often whether to choose a new-build or a resale property. Location, price, layout and the condition of the property are important factors, but they are not the only ones.

The choice also affects issues that may be less obvious at first, such as the taxes you will have to pay, the documentation you need to review, the procedures required before signing or how long you will have to wait before moving in.

That is why, before deciding between a new-build vs a resale property, it is worth understanding how each type of purchase works. In this guide, we look at the main differences so that you can assess which option best suits your needs.

New-Build vs Resale Property: Key Differences at a Glance

Although the purchase process shares some steps, such as signing the public deed before a notary and subsequently registering the property with the Land Registry, there are important differences between the two options.

The specific taxes and any reduced rates may vary depending on the autonomous community, territory, characteristics of the property and the buyer’s personal circumstances. It is therefore always advisable to check the applicable tax rules before completing the purchase.

What Is Considered a New-Build Property?

For tax purposes, there is an important distinction: a property is not considered “new” simply because nobody has lived in it recently.

The Spanish Tax Agency considers a first transfer to be one in which a completed property is purchased from the developer, subject to certain exceptions relating to properties that have previously been used for a period of time. As a general rule, these first transfers are subject to VAT.

Second and subsequent transfers of a property are considered resale properties for these purposes and are normally subject to ITP.

This distinction is important because it determines many of the tax differences between buying a new-build property and purchasing a resale property.

What to Check When Buying a New-Build Property

When buying a new home, much of the documentation relates to the development and the construction process.

If the property is still under construction, it is also important to carefully review the expected completion dates, the terms of the contract, and how payments are made before handover.

The purchase process can therefore begin several months before you are able to move into your home. This allows you to plan the purchase further in advance, although it is important to have a clear understanding of the expected timeline from the outset.

What to Check When Buying a Resale Property

With a resale property, checks focus particularly on understanding exactly what you are buying and the property’s current legal and physical status.

Land registry information allows you to verify who owns the property and whether there are any mortgages, attachments, or other charges registered against it.

It is also particularly important to check the status of the owners’ association. Unless the buyer waives this requirement under the legally established conditions, the seller must provide the corresponding certificate confirming payment of community fees. The notary also checks matters relating to IBI property tax, the cadastral reference, and the energy performance certificate.

Depending on the age of the building and the regulations of the autonomous community, it may also be necessary to check its status regarding the Technical Building Inspection (ITE) or other equivalent inspections.

There is also another issue that does not always appear in the main documentation: special assessments by the owners’ association. Before buying, it is advisable to find out whether any works have already been approved or are planned that could involve an additional expense once you become the owner.

Does the Mortgage Process Change?

Not substantially simply because the property is new or resale.

If you need financing, the bank will assess your financial situation and carry out the necessary checks on the property. In both cases, a valuation may be required and the mortgage formalisation process must be completed before the property purchase.

What can change, however, is the planning.

With a new-build development purchased during construction, there is normally a completion date known in advance, whereas with a resale property the period between the deposit agreement, financing and signing the deed can be considerably shorter.

That is why it is important not only to know how much you can finance, but also when you will need to have each amount available.

New-Build Property: A Purchase That Can Begin Before You Receive the Keys

One of the defining characteristics of a new-build property is that it can be purchased while it is still under construction.

This allows the buyer to follow the progress of the project and organise payments until final handover. Depending on the development, there may be an initial reservation payment followed by different instalments.

In these cases, it is particularly important to keep contracts, receipts and all documentation relating to the amounts paid. Consumer information requirements also include specific documentation concerning the guarantee of advance payments made during the construction process.

Once the property has been completed and the corresponding requirements have been met, the public deed will be signed, any outstanding amounts will be paid and the keys will be handed over.

Resale Property: Pay Attention to the Condition of the Home and Building

With a resale property, the buyer has one clear advantage: they can visit a completed property and directly inspect many of its features.

However, precisely because both the property and the building have already been in use, it is important to look beyond the layout and finishes.

The condition of installations, windows, insulation, communal areas and structural elements can affect the true cost of the purchase. It is also advisable to ask about renovations that have been carried out, building maintenance and any works planned by the owners’ association.

A resale property may be ready to move into or may require a complete renovation. Factoring this potential investment into your budget allows for a more realistic comparison with the price of a new-build property.

So, Is It Better to Buy a New-Build or a Resale Property?

There is no single answer. The choice will depend on which aspects are most important to you.

A resale property may be an attractive option if you are looking for a very specific location, want to have access to the property within a short period of time or find a home whose condition and price meet your needs.

A new-build property, on the other hand, allows you to be the first to live in the home, understand the characteristics of the project from the outset and generally reduces the need for initial renovation work. It may also offer spaces and solutions designed to meet current needs and building standards.

The comparison should therefore not be based solely on the advertised price. It is advisable to consider the total cost of the transaction, including taxes, expenses, potential renovations, maintenance and future needs.

Choosing a Home Means Choosing How You Want to Live

Comparing a new-build vs a resale property requires looking far beyond whether a home has previously been occupied. The tax treatment is different, as are some of the checks required before purchase, and each option involves a different way of organising the process until you receive the keys.

Understanding these differences will help you make a more informed decision and prepare both the necessary documentation and your budget from the outset.

At ACCIONA, we develop new-build residential projects designed to create functional, efficient spaces connected with the needs of the people who will live in them. Our approach to housing places particular emphasis on design, wellbeing, and sustainability, creating spaces conceived to help you make the most of everyday life.

If you are considering buying a new home, you can explore our developments and discover the different options available to find the home that best suits the way you want to live.

The information contained in this section is for information purposes only and does not constitute legal, tax or financial advice. The applicable regulations and the circumstances of each transaction may affect the taxes, costs and procedures associated with the purchase.