Off-Plan vs Resale: Pros, Cons and Timelines

Choosing between an off-plan (newly built, bought before or during construction) and a resale (second-hand) property is the first big decision most foreign buyers face on the Costa del Sol. The two routes differ in the taxes you pay, the legal protections you receive, how you finance the purchase and, above all, the timeline. This guide compares off-plan versus resale across every practical dimension so you can decide which suits your budget, your patience and your risk tolerance. All figures reflect the position in Andalusia for 2026 and use official Spanish tax names, which we keep in Spanish (IVA, ITP, AJD, IRNR, Modelo 210) as you will see them on documents.

Off-plan vs resale: the headline differences

The clearest divide is tax. A brand-new home sold for the first time by a developer is a commercial supply, so it carries IVA (VAT) at 10% of the price plus AJD (stamp duty, Actos Juridicos Documentados) at 1.2% in Andalusia ¹². A resale home is a private transfer, so instead of IVA you pay ITP (transfer tax, Impuesto sobre Transmisiones Patrimoniales) at a flat 7% in Andalusia and no separate AJD ²³. In headline terms an off-plan purchase is taxed at 11.2% and a resale at 7%, though other costs narrow the gap.

The second divide is time. Off-plan means buying largely from plans, a show home and specifications, then waiting months or years for keys. Resale means viewing the actual property and, once conveyancing is done, completing in weeks.

Buying off-plan: pros, cons and timeline

Advantages of off-plan

• Staged payments ease cash flow. You typically pay a reservation fee, then instalments during construction, then the balance at completion, spreading the outlay (and the IVA on it) over the build period rather than all at once.
• Brand-new condition and warranties. New builds come with statutory construction guarantees and modern energy efficiency, so there is usually nothing to renovate.
• Choice and personalisation. Buying early can mean better plot or floor selection and, in some developments, a say over finishes.
• Potential capital growth during construction if the market rises between reservation and completion, though this is never guaranteed.

Disadvantages of off-plan

• Higher purchase tax (10% IVA + 1.2% AJD versus 7% ITP) ¹²³.
• You are buying from plans, so the finished home can differ from your expectation in light, views or finish quality.
• Completion risk and delay. Build programmes slip, and your money is committed before you can see the result.
• Mortgage timing. A lender will usually only formalise the loan near completion, so you fund the staged payments yourself in the meantime.

Why deposit protection matters off-plan

Because you hand over money before the home exists, Spanish law requires the developer to secure your stage payments. The long-standing framework is Ley 57/1968, under which advance payments must sit in a special account backed by a bank guarantee or insurance policy, and buyers can recover 100% of the deposits plus statutory interest if the home is not delivered as contracted ⁴. Insist that every payment is covered by an individual guarantee before you transfer funds, and have an independent lawyer confirm it in writing.

Typical off-plan timeline

1. Reservation contract and fee (property taken off the market).
2. Private purchase contract (contrato de compraventa) with the payment schedule and delivery date.
3. Staged payments during construction, each covered by a bank guarantee.
4. Licence of First Occupation (Licencia de Primera Ocupacion) issued by the town hall.
5. Completion before a notary, balance and taxes paid, keys handed over.

Buying resale: pros, cons and timeline

Advantages of resale

• Lower purchase tax at 7% ITP in Andalusia, with no separate AJD ²³.
• What you see is what you get. You view the real property, its actual light, views and neighbours before committing.
• Faster completion. Once checks are done you can complete in weeks and move in or let straight away.
• Established communities with mature gardens, working amenities and a known community-fee history.

Disadvantages of resale

• Condition risk. Older properties may need updating, and defects are the buyer’s problem unless disclosed.
• The valor de referencia can raise your tax bill. ITP is charged on the higher of the price paid or the Junta de Andalucia reference value, so a low purchase price does not always mean a low tax base ³.
• The 3% retention when the seller is non-resident. If you buy from a non-resident, you (the buyer) must withhold 3% of the price and pay it to the Agencia Tributaria via Modelo 211 within one month, as an advance on the seller’s IRNR (this protects you, but you must handle it correctly) ¹.

Typical resale timeline

1. Reservation, then a private purchase contract with a deposit (commonly around 10%).
2. Legal due diligence: title, charges, licences, community debts and energy certificate.
3. Completion before a notary, with the balance, ITP and fees paid.
4. ITP filed and paid within 30 calendar days of signing the deed ³.

The costs beyond the headline tax

Whichever route you choose, budget for the extras that apply to both. Notary and Land Registry fees are regulated by law and scale with price (roughly 600 to 1,200 euros each for a property between 200,000 and 500,000 euros) ⁵. Add legal fees (typically around 1% plus IVA) and, if you borrow, mortgage arrangement and valuation costs. As a rule of thumb, allow about 13% to 15% of the price in taxes and fees for an off-plan new build and about 10% to 12% for a resale.

Financing differs too. Non-resident buyers can usually borrow up to around 60% to 70% of the price or valuation, so you should plan for a larger deposit than a Spanish resident would need. Confirm the exact loan-to-value with your lender early, and see our related guide on getting a mortgage as a non-resident.

Ongoing taxes: the same for both once you own

After completion, off-plan and resale owners are taxed identically. Every owner pays annual IBI (the municipal property tax, set by each town hall as a percentage of the cadastral value) and, if you are a non-resident, you must file Modelo 210 for IRNR each year. Where the property is not let, you pay tax on imputed income calculated as 1.1% or 2% of the cadastral value (1.1% where the cadastral value was revised in the last ten years, otherwise 2%), taxed at 19% for EU/EEA residents and 24% for non-EU residents such as UK nationals ¹⁶. The imputed-income Modelo 210 is filed by 31 December of the following year; rental income is declared quarterly or annually depending on your circumstances ⁶. When you eventually sell, the seller pays plusvalia municipal on the increase in land value plus any capital gains tax, and if you are non-resident the 3% retention will apply to you as seller ¹. For the full picture see our guides on non-resident taxes and on selling a Costa del Sol property.

So which should you choose?

Choose off-plan if you value brand-new condition, can wait for completion, want to spread payments and are comfortable with build risk backed by a bank guarantee. Choose resale if you want to see exactly what you are buying, move in quickly, pay less purchase tax and prefer an established community. Neither is universally cheaper once you weigh tax, condition, timing and financing together. Whatever you decide, appoint an independent Spanish lawyer (never one recommended solely by the seller or developer), obtain your NIE early and confirm every figure in writing before you transfer money. For the practical first steps, read our guides on getting your NIE and opening a Spanish bank account, and on the conveyancing process.

This guide is general information, not tax or legal advice. Rates and rules can change and personal circumstances vary, so confirm your position with a qualified Spanish lawyer or tax adviser before committing.