When considering the purchase of a property, the common question often arises about whether it’s better to buy new construction or a resale home. This decision is crucial, and in this article, we’ll provide you with a detailed insight into the advantages and disadvantages of opting for a new home or a resale property.
The choice between a new and a resale home doesn’t have a one-size-fits-all answer. Both options have their own benefits and challenges. Newly constructed homes tend to be more energy-efficient, albeit often coming with a slightly higher price tag. Conversely, resale homes are often in central locations but may require improvements. Your ultimate choice will depend on your preferences and needs as a buyer.
Advantages of New Construction Homes
Some of the advantages of buying new construction homes include efficient layouts, good lighting, large windows, spacious terraces and balconies, and greater integration of home automation compared to resale properties. They often feature communal areas such as pools, gardens, playgrounds, and open spaces. Another advantage of purchasing off-plan new homes is the ability to personalize finishes and layout, offering flexibility in adapting the property to the buyer’s preferences. However, the downside is the wait until construction is complete to move in. Other things to consider are:
- Energy Efficiency: Newly constructed homes tend to be more expensive, but they are highly energy-efficient. This results in lower energy consumption and therefore, savings on your utility bills. The Technical Building Code (CTE), which unifies construction and efficiency regulations, mandates that all new buildings ensure “rational use of energy.” This document requires homes to have thermal insulation to control their temperature, low-energy lighting, and that a portion of their energy consumption comes from renewable sources (produced on-site or externally). This level of efficiency is registered in the energy efficiency rating label, a mandatory element for any home being sold or rented.
- Lower expenses: In the case of a new construction home, the buyer won’t need to undertake significant renovations, either inside the property or within the building, reducing the likelihood of having to approve communal contributions significantly compared to a resale property. “During the first 10 years, most of the common expenses will be routine: communal elevator, electricity, water, cleaning, and administration.
- Quality Guarantees: New construction homes come with quality guarantees supported by the Building Regulation Law (LOE). This ensures that every new property has coverage for one year for damages or defects in the finishes of the work, three years for defects related to the habitability of the residents, and 10 years for structural failures in the building.
- Tax: Taxes are another factor to consider when dealing with a new construction home. The buyer must pay the Value Added Tax (VAT), which is 10% of the final selling price. Additionally, they must handle the Documented Legal Acts Tax (AJD), which varies depending on the autonomous community.
Advantages of Second-hand Homes
Second-hand homes typically have a more affordable price tag but often require renovations. In many cases, these properties require rehabilitation or refurbishment. Additionally, updates in regulations, such as fire safety systems, for instance, require owners to undertake changes in the building. Other things to consider include:
- Central Location: Many second-hand homes are situated in more central and established areas, which can be convenient for those who value accessibility.
- Renovations: The age and condition of the property will determine the extent of renovations. It’s essential to check its condition before purchasing the property. It’s also worthwhile to inspect the property at different times of the day to verify if it has enough natural light or if there is excessive noise. This inspection should also be done on the facade and in communal areas, such as the elevator.
- Taxes: Taxes are another factor to consider when dealing with second-hand homes. The buyer must face the Property Transfer Tax (ITP), the amount of which depends on the percentage applied to the purchase price stated in the deeds and the autonomous community where the property is located, or the reference value for sales purposes indicated in the Land Registry if it is higher than the sale price.
Banks consider valuation and applicant profile, without distinguishing between new and second-hand homes when granting mortgages. Your choice will be based on preferences, personal circumstances, and budget. Both types of homes have advantages; the final choice will depend on what suits you best.
If you are interested in buying new or second-hand property, don’t hesitate to take a look at our housing listings. Additionally, you can get in touch with us and if you communicate your requirements, we’ll provide available options that fit your needs.