New build or second-hand property? Key factors in deciding which property to buy

Deciding which type of property to buy in Spain is one of the first steps you should take in your search process. Choosing between a new build and a second-hand property is a common confusion among buyers. Is it better to buy a new build property or a second-hand one? In reality, there is no definitive answer. Both options have their advantages and disadvantages, so the decision will depend solely on your needs and desires.

According to data from the INE (Spanish National Statistics Institute), in Spain in 2023, 110,323 new build properties and 475,264 second-hand properties were purchased. This means that, of the total properties bought in the last year in Spain, 81 % were second-hand and only 19% were new build properties. According to our data, since the beginning of 2024, 89% of buyers that have visited thinkSPAIN have been interested in second-hand properties. There are a variety of factors that can influence this decision. That’s why, in this article, we want to give you the information you need to help you to make the right decision for you.

What is considered to be a new build and what are second-hand properties?

Second-hand properties are those that have had at least one previous owner. On the other hand, it might be said that new build properties are those that are handed over for the first time and, therefore, have not had a previous owner. However, the definition of a new build is more complicated, since there are different circumstances to consider.Below, we list some of the circumstances where property is considered to be a new build:

• A recently built property bought directly from the construction company or developer.
• An off plan property, in other words, a property that hasn't been built yet.
• A construction that was built several years ago, provided it hasn’t been lived in.
• A property that has been rented out for less than two years, provided the property owner has been the developer and the tenant is the future buyer. If the property has been rented for more than two years or the buyer is not the former tenant, it will be considered a second-hand property.
• Properties that have undergone renovation work that has affected the structure of the property. For example, if load bearing walls have been removed or a new floor or garage has been built. These are considered to be new build due to restoration or complete renovation.
• Properties that have not been previously registered with the Spanish Land Registry, even though they are not newly built. This is known as an unregistered new build and can occur, for example, when a property that was previously deemed to be inhabitable now meets the current regulatory requirements to be lived in.

Buying a new build or second-hand property in Spain: Differences, advantages and disadvantages

When talking about the advantages and disadvantages of buying a new build or second-hand property, it is important to bear in mind that each buyer has different needs. What may be considered a benefit by one buyer, may be seen as a drawback by another. For that reason, we want to present you with different factors that may be decisive when it comes to choosing one property over another.

Location of the property

If you want to live in a city centre or a specific neighbourhood, the best option for you is likely to be buying a second-hand property, since you will find more available in these areas. This is because in Spain new build properties are usually located on the outskirts of cities, where there is more land available for building. However, if you would prefer to live in a residential area, away from the hustle and bustle and noise of the city, you will find many more options for buying a new build property.

Waiting time before moving in

Do you need to move house immediately or are you happy to wait a while? The time you have available or can wait to move into your new property will also be crucial in making your decision. In general, second-hand properties are ready to move into. However, in the case of new build properties, it is likely that they are still under construction or they may even only exist in plan form. This means you will have to wait for a few months, or even years, for the property to be ready. Therefore, if you are in a rush to move into your new property, second-hand properties will be the best option for you.

Design and potential renovations

For some people, a renovation is the ideal opportunity to design your home to suit your own taste. If you are one of these people and you enjoy the process, second-hand properties will be perfect for you. However, if you prefer to avoid any renovations, the best option for you would be to buy a new build property. These properties are brand new, with new materials and are more modern, and with no defects caused by use. However, if you buy a second-hand property, there is an increased likelihood of having to carry out some type of renovations, no matter how small they may be.

You are likely to want to paint the walls, replace a bathroom or outdated kitchen, change the floor, remove a wall or many other things. Not all second-hand properties will need the same renovations, but it is important to know what work you will need to carry out before buying the property. To do so, we recommend being prepared during viewings and knowing What to look out for when viewing property for sale in Spain. If your goal is to move without needing to do any renovations, the most recommended option is to look for a new build property.

Renovations can also refer to the works and maintenance required in a building. A building that is 20 or 30 years old is more likely to require more renovation work to be carried out which involves an additional cost.

Layout and communal areas

The layout of new build and second-hand properties tends to be quite different. Within changing needs and lifestyles, the layout and size of properties has also changed. In general, older properties usually had more rooms and longer corridors. However, nowadays, properties usually offer more spacious rooms, open plan kitchen-living areas, en-suite bathrooms, larger terraces and well-lit spaces.

In addition, it is common for new build properties to have larger communal areas than older properties. These areas may include a swimming pool, children’s play area, padel court and even a gym. For those interested in using these facilities, this can be a huge advantage. However, it is important to bear in mind that the more services the community offers, the higher the community fees will be. This can be a drawback for those who don’t wish to use any of these areas. Therefore, as we mentioned earlier, everything is dependent on the tastes and needs of the buyer.

Energy efficiency

Although at the start we mentioned that what can be beneficial for one seller, may be a drawback for another, this isn’t the case with energy efficiency. In this regard, new build properties have a clear advantage, since all new buildings must comply with the European Union’s measures to reduce energy consumption. These properties must meet the criteria set out in the Technical Building Code (CTE in Spanish), which results in better insulated properties, with more efficient systems and lower energy consumption.

Is it more expensive to buy a new build property or a second-hand one in Spain?

The costs associated with buying a new build property or a second-hand property in Spain may also be a determining factor when choosing one over another. There are two things that will influence costs: the price per square metre and the taxes payable as a result of the sale.

Differences in price per square metre

The price of a property is, without a shadow of a doubt, one of the most important aspects that every buyer considers when looking for a new home. Determining the budget available and what that budget can buy is the first step in the process. Therefore, it is not surprising that the price per square metre becomes a determining factor when it comes to choosing between a new build or second-hand property.

According to data from Spain’s Association of Property Registrars (Colegio de Registradores de España), the average purchase price in the first quarter of 2024 was €1,998/m². The average price of second-hand property was €1,940/m², compared to €2,223/m² for new build property. This indicates that the price per square metre of new build property is almost 14% higher than that of second-hand property. To illustrate this with a clear example, a second-hand property measuring 100m², would be priced at €194,000 while a new build of the same size would reach €222,300.

Differences in purchase taxes

There are three taxes involved in the purchase of a property in Spain: VAT (IVA or Impuesto sobre Valor Añadido), Property Transfer Tax (ITP or Impuesto de Transmisiones Patrimoniales) and Stamp Duty (known as AJD or Actos Jurídicos Documentados). The payment of each of these will depend on the type of property purchased:

• When buying a new build property: you will pay VAT and AJD (Stamp Duty). VAT is 10% of the registered value of the property and is common throughout Spain. Added to this will be the AJD (equivalent to stamp duty), which will range between 0.5 and 1.5% depending on the autonomous community.
• When buying a second-hand property: ITP (property transfer tax) will be applied. Depending on the autonomous community in which the property is being bought, the amount to be paid will be 6% or 10% of the value of the property.

We tell you more about these taxes in our article These are the taxes you will pay when buying a property in Spain.

With all of this in mind, we want to help you to understand that the choice between one property or another will depend on several factors. The key is to be clear from the beginning on your budget, the location you wish to live in and the characteristics you would like your new property to have. From there, you can start the search and compare different properties to find the best one to suit your needs. If you need help in starting your search on thinkSPAIN, we recommend you read our article How to find your ideal property with thinkSPAIN.