New build vs resale: mortgage differences in Spain

Banks do not treat new builds and resale properties the same. New builds are lower risk for them — new construction, predictable appraisals, modern standards. Resale generates more uncertainty, and uncertainty means worse terms for you. Understanding these differences saves you from surprises at the worst moment.

Tax differences

This is the first hit to your wallet:

• New build (obra nueva): You pay 10% VAT (IVA) on the purchase price, plus stamp duty (AJD — Actos Juridicos Documentados), which varies by region (0.5% to 1.5%).
• Resale (segunda mano): You pay transfer tax (ITP — Impuesto de Transmisiones Patrimoniales), between 6% and 10% depending on the region.

The total tax bill is often similar, but with new builds the IVA is typically paid in stages as you make advance payments to the developer (promotor). As one forum user explained: "They don't charge you all the IVA at once — you pay 10% VAT on each instalment during construction."

Advance payments to the developer

With new builds, you typically pay 10-20% before the keys are handed over: the reservation deposit, the purchase contract, and staged payments during construction. By the time you need the mortgage, you have already put down a significant chunk.

Several users see this as an advantage: "With the advance payments I only needed financing for 75% of the appraised value plus the 10% IVA." But the risk exists: if the bank denies your mortgage, recovering your advance payments depends on the developer's bank guarantee (aval bancario), which is legally required but not always straightforward to claim.

Developer mortgage vs your own mortgage

Key difference: with new builds, the developer already has a mortgage on the entire development. When keys are handed over, they offer you a subrogation (subrogacion) — stepping into that existing mortgage. Convenient. But the developer's mortgage was negotiated for a construction company, not for you. The bank wins twice: it keeps the mortgage active and places you on terms you had no opportunity to negotiate.

Shopping around almost always produces better terms. As one community member buying a new build shared: "We ended up going with new build, but the subrogation terms were not competitive. We went to BBVA and they improved them significantly."

Always request the FEIN (binding offer document) for the developer's subrogation. Compare it with at least 3-4 banks on your own. Subrogation is the easy path. It is rarely the best one.

Appraisal differences

With new builds, the appraisal (tasacion) usually lands close to the purchase price — new property, developer reference price. Little surprise. With resale, the appraisal can go either way: above the price (meaning the bank lends you more) or below (leaving you short on financing).

Forum users document this constantly: "The estate agent told us it would appraise at 210,000 without a problem. The surveyor came in at 200,000." If you are buying resale and your mortgage depends on the appraisal, get an estimate before signing the preliminary deposit (arras).

Timelines

The most practical difference: with resale, you typically have 60-90 days from signing the arras to close the mortgage. With new builds, you may have months or years between the reservation and key handover. Time to shop calmly, but also time for market conditions to shift against you.

Do not start seriously shopping for a mortgage more than 3-4 months before key handover. Offers expire, and if you request quotes too early, you will have wasted the effort by the time you actually need to sign.

Which is easier to finance?

Banks prefer new builds. New property, no hidden defects, current energy efficiency regulations, lower short-term depreciation risk. Some banks offer better conditions or higher LTV for new builds. It is the product that fits their risk models best.

With resale, everything depends on the property's condition, location, and age. A well-maintained resale in a high-demand area finances just as easily as new build. A 40-year-old apartment needing renovation can complicate the appraisal and, by extension, the mortgage.