If you’re considering buying a property in Spain, one of the first factors you’ll need to decide on after location is if you want to buy a new build or an older home.
Whether it’s a property for you to live in or a buy-to-let one, there are several advantages and disadvantages when it comes to investing in a new build or obra nueva in Spanish.
Greater energy efficiency
New buildings have to comply with new building standards and regulations, this means a greater energy efficiency too. For example, new builds in Spain must now have double glazing with a thermal glass system and better insulation. They will also be fitted with more efficient electrical appliances. Ultimately this means you will be paying a lot less money for energy bills, as well as updates that need doing to the property such as adding double glazing.
READ ALSO: What you should know before buying an off-plan property in Spain
Warranties
Buying a new build means it’s covered by certain warranties and certain guarantees, should there be a problem with the property. Spain's Building Regulations Act means that you can file claims up three years after purchase if there are damages or defects in the fittings and facilities, and up to 10 years if there is damage to the structure of the building.
More modern fixtures and fittings
Of course, new properties will come not only with more modern construction techniques, but also the fittings and appliances inside. You’re likely to have the latest boiler and heating systems, electric stove tops, instant hot water and air conditioning. Older properties will lack many of these, unless they’ve been updated and renovated recently.
Options for payment plans
When you buy an obra nueva, particularly if it’s off plan, there are many more options for how and when you pay. For example, with an off-plan home you will usually pay in installments over the length of time it takes for construction to be completed. This means you have greater financial flexibility than when you buy a pre-owned home and have to pay everything up front.
Greater customisability
One of the greatest advantages to buying a new build, especially if it’s off plan is that you can choose many of the furnishings and fittings yourself and make it customisable, so you can put your own stamp on it. This may include the types of tiles you want in the bathroom, the type of flooring and the kitchen cabinets and work tops. If you buy an older home, you’ll likely spend a lot more money on adding these features and spend time living in a bit of construction site or waiting until you can change them.
It could have a better investment potential
Some new builds have yield a better return on investment than others, depending on the location. Typically a new property will be a better investment if it’s in an area where there is high demand and low availability. According to data from property website Idealista, the gross profitability of new-build home in Spain was around 7.3 percent in the first quarter of 2024. This means that, for every euro invested in a buy to let property, you can earn back an average of €0.073 per year.
Parking spaces and common areas
New builds these days will often include parking areas, whether that’s underground parking in an apartment block or a garage if it’s a single home. But older properties didn’t always take this into consideration, so you may have to pay more for renting or buying a nearby parking space. New builds will likely have common areas too, which could be a rooftop garden, a communal swimming pool or even a gym.
Cons
Higher cost
Generally new builds cost a lot more than older properties. According to property website Fotocasa, buying a new-build home costs on average €14,000 more than a pre-owned one. You will of course be saving money in other areas we’ve mentioned such as energy bills and updates to the property, so you’ll have to work out if it will be worth it or not.
Location
Generally new properties tend to be located on the outskirts of cities or in urbanisations further away. You’ll rarely find a new build in the centre of a popular city. If you want all the newer fixtures and fittings in the centre of a city, your best bet is older building that has been completely gutted and renovated.
Resale value
Buying a new build doesn’t always mean it’s a better return on investment. According to the real estate agency Housing Costa Blanca, “New build properties may hold their value well initially, they may not appreciate at the same rate as older, more established properties”.
ITP: What you need to know about property transfer tax in Spain
More to pay in tax
When you buy a new home, you will have to pay 10 percent IVA or VAT. This is a higher tax than the ITP (Property Transfer Tax) which is between six and eight percent, and paid when buying a pre-owned home.
Longer waiting periods and delays
You’ll usually have to wait longer to move into a new build while you want for it to be completed. This is most often the case when you buy off plan. You also have to take construction delays into consideration.
Limited options for characterful properties
It’s likely that you’re not only attracted to Spain because of its great weather, food and vibrant culture, but also its architecture and style too. New builds rarely feature the traditional Spanish characteristics, including wrought iron balconies, patterned facades, wooden shutters or even interior architectural elements like fireplaces and Catalan vaulted ceilings (in Catalonia). New builds are typically more functional with plain exteriors and simple interiors without decorative elements like tiles and ceiling roses.
Conclusion
So, after weighing up all the pros and cons, should you invest in a new build or not? As you can see above, the answer depends on lots of different factors, from where you want your property to be located, if you're living in it yourself or plan on renting it out, your initial budget, if you're willing to put in some work, and even your taste in aesthetics, so there's no right or wrong answer.
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