For many foreigners looking to buy a home in Torrevieja or other parts of Spain, one of the first important decisions is choosing between a new build and a resale property. While both options may seem similar from a practical standpoint, there are significant legal and tax differences that should be understood before making a decision.

The first major difference lies in taxation. When buying a resale property, the buyer must pay Property Transfer Tax (ITP), the rate of which varies depending on the autonomous community. In the Valencian Community, for example, the standard rate is usually 10%. However, if the property is new and purchased directly from the developer, the applicable tax is VAT (10%) along with Stamp Duty (AJD). This detail can significantly impact the overall cost of the transaction.

Another important difference concerns legal guarantees. In a new build, the developer is required to offer certain guarantees, such as the ten-year structural warranty that covers structural damage for ten years. There are also guarantees for defects in finishes or installations. In a resale property, these guarantees do not exist, unless they are still valid if the property is relatively new.

From a documentation standpoint, when buying new homes it’s essential to verify that the developer has a building permit, a certificate of occupancy, and that any deposits paid are legally guaranteed. However, when buying a resale property, the analysis should focus on its registration status, any encumbrances, its zoning regulations, and compliance with current legislation.

For foreign buyers, especially those not residing in Spain, it is essential to conduct a thorough legal review before signing any contract, whether it be a preliminary sales agreement or a public deed. Each type of property involves different risks and requires specific checks.

Choosing between a new or resale home isn’t just about price or the property’s condition; it also involves legal, tax, and legal protection implications. Expert advice allows you to make an informed and confident decision.

Consult with A&G Lawyers before signing and receive personalized legal advice to choose the best option for your real estate purchase in Spain.