New-build vs resale price gap on the Costa del Sol (2026)
New-build properties on the Costa del Sol incur a total cost 19% higher per square metre than resale homes for foreign buyers. This difference is driven by both a market premium for new construction and distinct tax obligations, with recent data from 2025 and 2026 confirming robust demand in the region.
Understanding the New-Build vs. Resale Price Gap on the Costa del Sol
The Costa del Sol continues to be a highly attractive destination for foreign property buyers, driven by its climate, lifestyle, and strong rental yields. As the market evolves, understanding the price dynamics between new-build (obra nueva) and resale properties is crucial for informed investment decisions. This study analyses the current price gap, incorporating both purchase prices and associated taxation for foreign buyers in 2026.
The Headline Figure: A 19% Total Cost Premium
Our analysis indicates that new-build properties on the Costa del Sol present a total cost per square metre that is approximately 19% higher than that of comparable resale homes. This figure accounts for the initial purchase price differential and the distinct tax regimes applied to each property type.
Price Per Square Metre: A Regional Perspective
Drawing on data from the Colegio de Registradores, the average price per square metre for new-build properties in Malaga province stood at €2,467 in the first quarter of 2025.1 In contrast, resale homes averaged €2,153 per square metre during the same period.1 This represents an initial purchase price premium of approximately 14.58% for new construction.
Broader market trends show continued price appreciation. The average price for residential property in Malaga province was €3,101 per square metre for the full year 2025.2 More recently, national data from the Colegio de Registradores for the second quarter of 2026 reported the average price for used housing at €2,448 per square metre, reaching a new historical maximum.3 While national new-build prices saw a slight quarterly decrease of 0.7% in Q2 2026, the overall market remains robust.3
Taxation: A Significant Differentiator
The tax obligations associated with property acquisition in Spain play a substantial role in the overall cost difference between new-build and resale properties. Foreign buyers, like all purchasers, must navigate these differing structures, a topic often covered in our New-build vs. resale tax guide.
- New-Build Properties: These are subject to Value Added Tax (IVA) at a general rate of 10% on the purchase price.4 Additionally, Stamp Duty (Actos Jurídicos Documentados – AJD) is applied, typically at 1.2% of the purchase price in Andalusia.5
- Resale Properties: These are subject to Property Transfer Tax (Impuesto de Transmisiones Patrimoniales – ITP). In Andalusia, the general rate for ITP is 7% of the purchase price.5 While reduced rates exist for specific buyer profiles or property values, the 7% rate is most common for foreign buyers of typical Costa del Sol properties.
The cumulative effect of these taxes means that a new-build property incurs approximately 11.2% in taxes and duties (10% IVA + 1.2% AJD), whereas a resale property incurs 7% ITP. This 4.2 percentage point difference in tax rates contributes significantly to the total cost gap, as elaborated in resources like our Completion costs new-build guide.
The Total Cost Calculation
To quantify the total cost premium, we apply the respective tax rates to the average price per square metre figures for Malaga province from Q1 2025:
- New-build: €2,467/m² (purchase price) + (10% IVA + 1.2% AJD) = €2,467 1.112 = €2,743.04/m²
- Resale: €2,153/m² (purchase price) + 7% ITP = €2,153 1.07 = €2,303.71/m²
Based on these figures, the effective total cost per square metre for a new-build property is 19.07% higher than for a resale property. This substantial premium reflects both the intrinsic value ascribed to modern construction, often incorporating superior energy efficiency and contemporary designs, and the higher tax burden on new-builds.
Market Dynamics and Foreign Buyer Demand
The Costa del Sol property market, particularly in Malaga province, continues to demonstrate strong performance, with significant international interest. In 2025, foreign buyers accounted for 13.8% of all property purchases in Spain, with even higher percentages observed in coastal regions.2 In the second quarter of 2026, the percentage of housing purchases by foreigners reached a historical maximum of 15.98% nationally, with Balearic Islands (32.27%) and Comunitat Valenciana (31.03%) showing the highest proportions.3 While specific 2026 data for Malaga province’s foreign buyer share is not yet fully disaggregated, it is consistently among the highest in Spain. This sustained demand, coupled with a sometimes limited supply of new properties, contributes to maintaining the premium for new-build homes in prime locations across the Costa del Sol.
The figures
| Metric | Value | Source |
|---|---|---|
| Average Price/m² - New-build, Malaga Province (Q1 2025) | €2,467 | Colegio de Registradores |
| Average Price/m² - Resale, Malaga Province (Q1 2025) | €2,153 | Colegio de Registradores |
| Average Price/m² - Overall, Malaga Province (Annual 2025) | €3,101 | Colegio de Registradores |
| IVA Rate on New-Build Property (General) | 10% | Agencia Tributaria |
| ITP Rate on Resale Property (Andalusia, General) | 7% | Agencia Tributaria de Andalucía |
| AJD Rate on New-Build Property (Andalusia, General) | 1.2% | Agencia Tributaria de Andalucía |
Comparative Costs and Taxation for New-Build vs. Resale Property in Malaga Province (Q1 2025 - 2026)
Frequently asked questions
What is the primary factor contributing to the new-build price premium?
The premium for new-build properties is influenced by several factors, including modern construction standards, superior energy efficiency, contemporary designs, and often, prime locations. Additionally, the differing tax structure, particularly the IVA and AJD, contributes to a higher total acquisition cost compared to resale properties.
Are there any reduced tax rates for property purchases in Andalusia?
Yes, for resale properties, Andalusia offers reduced ITP rates (e.g., 6% for main residences under €150,000, or 3.5% for young buyers or large families under specific conditions). However, these typically apply to specific buyer profiles or lower-value properties that may not be representative of the Costa del Sol new-build market.
How does the scarcity of new-build properties affect prices?
A consistent theme in the Spanish property market, especially in high-demand areas like the Costa del Sol, is a limited supply of new construction. This scarcity, against a backdrop of strong domestic and international buyer demand, helps to maintain and even increase the price premium for new-build homes, particularly in desirable locations.
What are the key taxes for foreign buyers of new-build property?
Foreign buyers of new-build properties primarily pay Value Added Tax (IVA) at 10% and Stamp Duty (AJD), which is 1.2% in Andalusia. These are calculated on the purchase price of the property.
What are the key taxes for foreign buyers of resale property?
Foreign buyers of resale properties in Andalusia pay Property Transfer Tax (ITP), which has a general rate of 7% of the purchase price. Other costs such as notary and registration fees apply to both new-build and resale properties.
