New build or resale? How to choose on the Costa del Sol

Most people who start looking at property on the Costa del Sol quickly discover that the market has two quite different faces. On one side, new developments with modern layouts and low running costs. On the other, homes you can move straight into in established areas, often closer to the sea. Both can be good buys, but they suit different people.

A new build gives you a home nobody has lived in, built to today's standards for insulation and energy use. You can usually choose the tiles, kitchen and finishes yourself, and the developer must take out ten-year insurance against structural defects that stays with the property. The drawback is the wait: you often buy off plan, and it can take eighteen months to two years before you get the keys. New developments are also built where there is land available, which often means a little further from the seafront promenade.

A resale home gives you the opposite. You see the property as it really is: the view, the morning sun, the neighbours and how well the community (urbanización) is kept. You can move in straight away, and you buy into established areas with mature gardens and everything close by. In return, the standard may be older, and some homes need renovating. The price is usually more negotiable than with a developer, too.

Then there are the taxes, which many buyers overlook. When you buy a resale home in Andalucía, you pay 7 per cent transfer tax, ITP. On a new build you pay 10 per cent VAT (IVA) instead, plus 1.2 per cent stamp duty, AJD. So a new build usually costs a few percentage points more in tax than a comparable resale home. On the other hand, running costs are often lower for the first few years, and there is nothing to renovate. Your lawyer should work out the exact figures before you commit, because the reference value set by the Spanish cadastre (Catastro) can affect the calculation. Our buying guide goes through the costs step by step.

The payment schedule is also different, and it matters more than people think. With a new build you pay in stages during construction, usually a reservation deposit first and the rest along the way. If you are selling a property in your home country to fund the purchase, that gives you breathing space. With a resale home, you usually pay a deposit when the private contract is signed and the rest in one go at the notary a few weeks later.

Our advice is simple: look at both before you decide. Put two or three new-build projects and as many resale homes on the same viewing trip. Most people only know what they want once they have stood in both types of home on the same day, and quite often the answer is different from what they expected when they boarded the plane.

Wondering what suits you? Have a no-obligation chat with Pål Anders, and we will work it out together. And once the keys are in your hand, our article on running costs and taxes for owners in Spain shows what to budget for each year.