In Spain the two routes are taxed differently and protected differently. IVA plus stamp duty against regional ITP, a ten-year structural insurance, and the bank guarantee that backs off-plan deposits.
Buying in Spain splits into two legally different transactions. A first sale by a developer is a VAT transaction with its own warranties and its own payment-protection rules. A resale between private parties is a transfer-tax transaction where the protection mostly comes from your own checks. The headline price is rarely the right way to compare them, so here is what actually differs.
The tax difference
A resale is taxed with ITP (transfer tax), which is set by each autonomous community. Guides for 2026 put it at roughly 6% to 10%, with Madrid around 6%, Andalusia around 7% and Catalonia around 10%. A new build bought from a developer carries 10% IVA on residential property plus stamp duty (AJD), which regional guides place between about 0.5% and 1.5% depending on the region. Rates change and some regions adjust them from time to time, so check the current figure for the exact community before you compare offers.
The practical point: on a similar price the two routes can land at a similar total, but the new build puts a larger sum into IVA that you pay on top of the price, and it matters for how much a bank will finance. Total acquisition costs for non-residents are commonly quoted at 10% to 15% on top of the price.
Warranties: what a new build gives you
Spain's Building Regulation Law (LOE) sets three periods of liability for new residential buildings: ten years for structural defects, three years for habitability issues such as weatherproofing, and one year for finishing defects. The ten-year structural cover is backed by a decennial insurance policy (seguro decenal) that the developer is expected to arrange, and notaries and the Land Registry will generally not process a new residential sale without proof of it. The policy passes to later owners for the years that remain, which also helps when you resell. Ask for the certificate and check that it names the building.
A resale has no fresh warranty. If the building is less than ten years old, the remaining structural cover may still apply, but for older homes the condition is on you, which is why a surveyor and the checks in our Spain resale checklist matter.
Off-plan: how deposits are protected
If you pay advances on a home that is not built, Spanish law requires the developer to back every payment with a bank guarantee or an insurance policy covering the amount paid, with the funds channelled through a special bank account. This comes from the Building Regulation Law and Law 57/1968 as strengthened by Law 20/2015. One practical detail reported by Spanish law firms: such guarantees are valid only once the developer holds the building licence, so a reservation paid before the licence exists is not covered in the same way.
Before paying anything, check these points:
- the building licence is granted and matches the unit you are buying
- you are given a guarantee or policy naming you and the specific unit, not a general document
- the money goes to the special account, not to a general developer account
- the contract states the completion date and what happens if it is missed
- you can see who holds any loan on the plot and how it is released unit by unit
Resale: the costs that are not on the listing
A resale is usually available immediately and in a known neighbourhood, but it can carry costs the asking price hides: renovation, energy upgrades, community arrears and ageing systems. Buy with a nota simple from the Land Registry, an energy certificate and a surveyor's view, and set aside a renovation budget before you negotiate. Because the seller is a private person, there is more room to negotiate on price than with a developer who has a fixed price list.
A simple way to decide
- choose a new build if you want modern insulation and layout, a clear warranty and a longer horizon, and you can accept waiting for completion
- choose a resale if you want to move in or let quickly, to buy in an established area, or to renovate to your own taste
- compare the all-in cost, including tax, renovation and the mortgage you can actually get, not only the asking price
FAQ
What taxes differ between the two? A resale pays regional ITP, while a new build pays 10% IVA plus AJD stamp duty, and the exact rates depend on the region. Is a new build safer? It has a ten-year structural insurance and, off-plan, legally required deposit guarantees, but you must verify them yourself. Can I lose an off-plan deposit? The guarantee is designed to prevent that, but only if it exists, is valid for your unit and the licence is in place. Does a resale come with any warranty? Not a new one, although part of the original ten-year cover may remain on a recent building. Is the mortgage the same for both? Not necessarily, see our guide to Spanish mortgages for foreigners.
How we help
D.H. Realting can help you compare specific new-build and resale options and put the right questions to the developer or seller. This article is general information, not legal, tax or investment advice. Rates and rules change by region and over time, so confirm the current figures with your lawyer and the relevant authority before you commit.