The 10% IVA + 1.2% AJD on new build versus the 7% ITP on resale is not a small difference. A practical guide to when each makes sense.
Most buyers arrive at the new-build-versus-resale question through taste. They have a picture in their head — crisp glass-and-concrete with a sunken lounge, or weathered Andalusian stone with a mature garden — and they choose accordingly. That is a perfectly good way to choose a home. It is a poor way to choose a transaction, because the two paths are taxed under entirely different regimes, and the gap between them is large enough to fund a swimming pool.
This is the part that gets lost in the showroom, so let us be precise about it.
Two regimes, one decision
In Andalucía, a resale property — meaning any second or subsequent transfer — is taxed under Impuesto sobre Transmisiones Patrimoniales (ITP). Since the 2021 reform, the region applies a flat 7%, regardless of price. There is no progressive scale to climb; a €1 million apartment and an €8 million villa are both charged at the same percentage.
A new build bought directly from a developer is not taxed under ITP at all. Instead the buyer pays IVA (VAT) at 10% on the price, plus stamp duty (AJD) at 1.2%. You never pay both ITP and IVA on the same purchase — but on a new build the combined headline tax is 11.2%.
Seven percent against 11.2%. That is a 4.2-percentage-point difference in tax alone, before a single fee.
The arithmetic is unforgiving at the prices this coast trades at. On a €2 million purchase, the tax line is roughly €140,000 on a resale versus €224,000 on a new build — an €84,000 swing. On a €3.5 million home, the same gap widens to around €147,000. That is not a rounding error. It is, very often, the difference people thought they were negotiating on the price.
The all-in numbers
Tax is the largest cost but not the only one. On top of either route, budget for notary fees (broadly €600–1,200), land registry (roughly €400–1,000), and independent legal representation at around 1–1.5% of the price. A gestor may handle the administrative filing.
Add it together and the working rules of thumb for Andalucía are clean:
- Resale: budget around 10–12% on top of the price, all-in. Cash buyers tend to sit at the lower end.
- New build: budget around 12–14% all-in.
These are the numbers a buyer should carry into the very first conversation, not discover at the notary.
The trap is not the tax — it is the assumption
So where is the “trap”? It is rarely the tax rate itself, which is published and fixed. It is the unexamined assumption that sits on either side of it.
The new-build trap is treating the higher tax as invisible because the property is shiny, turnkey and sold with confident staging. Buyers anchor on the headline price and forget that they are also paying an extra four points of tax for the privilege of being the first owner. Sometimes that premium is entirely justified — but it should be a decision, not an oversight.
The resale trap is the mirror image: assuming a resale is automatically the cheaper outcome because the tax is lower. Two things frequently erase the saving. The first is renovation — a resale that needs modernising can consume the entire 4-point tax advantage in builders’ invoices, and then some. The second is the tax base itself. ITP is charged on the higher of the declared price or the official valor de referencia set by the cadastre. Since 2022 that reference value has narrowed the room for under-declaration, and on some properties it sits above the agreed price — meaning the buyer pays 7% on a number larger than what they actually paid. A resale that looked cheap on tax can quietly cost more than expected.
In other words, neither route is reliably cheaper. The cheaper route is the one that is correctly costed before you commit.
A worked comparison
Numbers make the abstract concrete, so here are two buyers, each spending €2.5 million, one on a resale and one on an equivalent new build, in Andalucía.
The resale buyer pays 7% ITP — €175,000 — plus notary, registry and legal costs of roughly €30,000–40,000, for an all-in transaction cost in the region of €205,000–215,000.
The new-build buyer pays 10% IVA (€250,000) plus 1.2% AJD (€30,000) — €280,000 in tax — plus similar fees, for an all-in cost closer to €310,000–320,000.
That is a difference of roughly €100,000 on a €2.5 million purchase, attributable almost entirely to the tax regime rather than to anything about the homes themselves. The new-build buyer may be perfectly happy to pay it for warranty, specification and staged payments. The point is that it is a six-figure, fully foreseeable line item — and it should appear in the budget on day one, not as a surprise at completion.
When each genuinely makes sense
Strip away the taste and the cases are fairly clear.
New build or off-plan suits the buyer who wants the latest specification and energy performance, values the ten-year structural warranty that comes with new construction, prefers a staged payment schedule during the build over a single completion, and is comfortable paying the tax premium and waiting for delivery. For off-plan in particular, there is the additional possibility of capital appreciation between reservation and completion in a rising market — though that is an opportunity, not a guarantee, and it should be underwritten conservatively.
Resale suits the buyer who wants an established address with mature landscaping and proven views, needs possession now rather than in eighteen months, values the room to negotiate that a motivated private seller can offer, and would rather take the lower tax and direct any spare budget into making the home their own. The non-negotiable here is due diligence: legality of any extensions, valid licences of first occupation, and a clean nota simple. The 4-point saving is only real if the property is genuinely clean.
A footnote for investors
One 2026 change is worth flagging for anyone buying to resell rather than to live. The reduced 2% ITP rate available to professional operators reselling within a set period now applies only to properties valued up to €500,000, and the resale window has been shortened from five years to two. In the prime coastal market, where most homes comfortably exceed that threshold, the standard 7% applies — which simply confirms what serious investors here already know: in this segment the decision is driven by location, scarcity and design, not by transfer-tax mechanics.
The point
The choice between new build and resale deserves to be made on the merits — light, layout, location, the life you intend to live in the house. But it should be made with the tax difference fully on the table, because at Costa del Sol prices that difference runs to tens or hundreds of thousands of euros, and it is entirely foreseeable. The buyers who get caught are not the ones who chose the more expensive route. They are the ones who did not know they were choosing.
Rates cited are for Andalucía and are current as of early 2026; autonomous communities can amend them, and figures should always be confirmed at the time of purchase. This guide is general information, not tax or legal advice — your own lawyer and fiscal adviser should confirm the position for your specific transaction.