Quick answer: the off-plan versus resale question is usually argued on discount and on risk, and both framings miss the thing that decides most files: when the money moves. Off-plan spreads payment across eighteen to thirty months, produces no income at all until delivery, and costs 10% IVA plus 1.2% AJD in Andalucía. Resale takes the whole price at completion, produces income within weeks, and costs a flat 7% ITP. That is a 4.2 percentage point tax gap and roughly two years of rent, running in the same direction, and off-plan has to earn all of it back through price, specification, or the value of a building with its full warranty period ahead of it. This page prices both sides of that curve rather than asserting a winner.
The protections referred to throughout are set out in the bank guarantee guide and the developer delay risks guide. For the wider off-plan process see the off-plan property guide, and for where on this coast to buy, Marbella against Estepona and the Costa del Sol investment guide.
What is actually different between the two?
Strip out the marketing on both sides and three things separate a new-build purchase from a second-hand one on this coast. Everything else people argue about is downstream of them. The payment curve differs. Off-plan takes a reservation, then a deposit on contract, then staged instalments against construction milestones, then the balance at notary. Resale takes a reservation, an arras deposit of usually 10%, and the balance at notary a few weeks later.
The tax treatment differs, and in Andalucía it differs sharply. A new build from a developer is a first transmission subject to 10% IVA plus 1.2% AJD. A resale between private parties is subject to ITP at a flat 7% regardless of value. Nothing about the property causes this; it is a consequence of who is selling.
The warranty position differs. A new building starts its Ley 38/1999 periods on reception of the works. A resale carries whatever is left of them, plus a maintenance history and a community with a track record.
| Off-plan new build | Resale | |
|---|---|---|
| Acquisition tax in Andalucía | 10% IVA + 1.2% AJD = 11.2% | Flat 7% ITP |
| When the full price leaves you | Staged over roughly 18 to 30 months | At completion, in one movement |
| First rental income | On delivery, plus licensing time | Within weeks of completion |
| Protection on money paid early | Individual bank guarantee per instalment | Not applicable: nothing is paid early |
| Building warranty | Full: 1, 3 and 10 years from reception | The remainder of the original periods |
| Inherited community debt | None to inherit | Current year plus three preceding |
| Letting licence | Must be obtained; check the new community’s rules | May already hold VFT registration |
How much does two years of silence cost?
This is the number that decides most comparisons and it almost never appears in the brochure, so it is worth calculating explicitly. Take a €500,000 purchase let at a 5% gross yield: €25,000 of rent a year. An off-plan buyer collecting nothing for two years between reservation and delivery forgoes €50,000 of gross rent, which is 10% of the purchase price. Add the tax gap of 4.2 points, another €21,000 on the same purchase, and the off-plan buyer begins roughly €71,000 behind the resale buyer who bought the same thing finished.
That figure is gross and slightly overstated, for two honest reasons.
The first is that the resale buyer does not keep all of that rent. Deduct management, community fees, IBI, vacancy and non-resident income tax, 19% on net for EU and EEA residents, 24% on gross for others, and the net advantage is materially smaller than €50,000, though still substantial.
The second is more interesting and cuts the other way. The off-plan buyer has not paid the full price during those two years. Staged instalments mean a large part of the purchase money remains theirs, earning whatever it earns, until the milestone falls due. On a €500,000 purchase where perhaps 30% to 40% is paid before completion, the uncommitted balance is a real sum sitting outside the deal for up to two years. At any meaningful return that offset is worth tens of thousands, and it is the only structural argument in off-plan’s favour on the cash-flow axis.
So the honest verdict on timing is: resale wins, but by less than the raw rent calculation implies, and the gap narrows further the longer the construction period and the higher the return available on the uncommitted capital.
We will run the payment schedule, the tax, the forgone rent and the retained capital side by side for any Costa del Sol development you are considering, before you reserve.
Model both curves on the same property budgetHow does an off-plan payment schedule actually run?
The curve described above is abstract until you see the stages, and the stages matter because each one commits you further while giving you less room to withdraw. A Costa del Sol development typically moves through four steps. A reservation takes the unit off the market for a short window, usually a few thousand euros, against a document that should state precisely what happens to that money if you do not proceed. The private purchase contract follows within roughly a month and carries the first substantial payment, commonly around a fifth to a third of the price, and this is the point at which the bank guarantee must exist. Stage payments then fall due against construction milestones over the build period. The balance is paid at the notary on completion, together with IVA and AJD, which are due then rather than earlier.
Three things about that sequence are worth stating plainly:
- Your negotiating position peaks before the reservation and declines afterwards. Everything you want written into the contract, specification, delivery date, consequences of delay, what happens to the deposit, has to be secured at the point where the developer still wants your signature.
- The guarantee attaches from the contract stage onward, which is exactly when meaningful money starts to move. A reservation fee paid before any guarantee exists is the one genuinely unprotected sum in the sequence, which is a reason to keep it small.
- The tax arrives at the end, not spread across the stages. A buyer budgeting from the instalment schedule alone will be short at completion by the whole 11.2% plus notary, registry and legal fees. That is a common and entirely avoidable surprise.
A resale schedule is far simpler: a reservation, an arras contract with usually 10% down, and completion within a few weeks. The compression is itself an advantage, less time for circumstances, financing or intentions to change on either side.
Can you actually let a brand-new unit?
Assuming so is the second most expensive mistake in off-plan after underestimating the wait, because the letting position for a new development is genuinely unknown at the point of purchase in a way a resale’s is not. Two permissions have to line up. The community must permit tourist letting: a new development’s constitution is written by the developer, and while investment-oriented schemes on this coast usually permit it explicitly, the community that forms afterwards can restrict it by the three-fifths majority the horizontal property law allows. The municipality must permit it in that zone, and Andalusian municipalities have been given power to limit tourist dwellings by area, which means a permissive regional framework no longer settles the question for a specific address.
Only once both hold can the property be entered on the Registro de Turismo de Andalucía as a vivienda con fines turísticos, and only then does the national registration required for platform advertising become obtainable.
A resale that is already letting has resolved all of this, visibly, and the evidence is documentary rather than predictive. That certainty is worth real money to an income buyer and is almost never reflected in the asking price.
What protects the money you pay before the building exists?
Paying for something that does not yet exist is the substantive risk in off-plan, and Spain regulates it more firmly than most jurisdictions, which is precisely why the protection has to be obtained rather than assumed.
Every sum an off-plan buyer pays ahead of delivery must be covered by an individual bank guarantee or insurance policy in that buyer’s own name, with the funds paid into a special account. The regime began with Ley 57/1968, was carried into the Ley de Ordenación de la Edificación, and its purpose is narrow and specific: if the development is not delivered, the buyer recovers the sums paid by presenting the guarantee, without the developer’s cooperation and without queuing behind other creditors.
Spanish case law has strengthened it further. Supreme Court doctrine has held receiving banks jointly liable where they accepted buyer instalments without ensuring the required guarantee was in place, which means the protection reaches beyond a developer that may no longer exist.
Three practical points follow, and they are where files go wrong:
- The document is individual, not collective. A developer’s general bank facility, a project escrow arrangement, or a letter describing the company’s financial standing is not the instrument. It must name you and the amount.
- It must exist before the money moves, not afterwards. Once funds have gone, obtaining the guarantee depends on the goodwill of the party you would be claiming against.
- It covers sums paid, not profits or opportunity cost. A guarantee returns your instalments. It does not compensate you for two years of a rising market you sat out, or for the rent you did not collect.
That third point is the honest limit. The guarantee removes the catastrophic outcome; it does not remove delay risk, and delay is far more common than failure.
Ley 57/1968 protection is the reason an off-plan payment schedule is fundable at all. Each stage payment should be covered by its own guarantee certificate naming the buyer, the amount and the guaranteeing bank or insurer, rather than by a single scheme-level document, and the promoting entity on your reservation contract should be the entity named on that certificate. On delivery, statutory warranties run for 10 years on structure, 3 on habitability elements and 1 on finishes. A resale carries none of that, which is what a structural survey and two years of community accounts partially substitute for. Acquisition tax differs too: 10% IVA plus roughly 1.2% AJD on a new build in Andalucía against a flat 7% ITP on a resale. On a €400,000 property that is roughly €45,000 against €28,000, payable in cash at completion either way.
What does a resale carry that a new build does not?
Second-hand property comes with a history, and history contains both assets and liabilities. Both are routinely overlooked in negotiations conducted on price per square metre.
On the liability side, community debt is the specific exposure. Under the Ley de Propiedad Horizontal, the property itself answers for unpaid community charges for the current year and the three preceding ones, and that liability travels with the property to the buyer. A certificate of no outstanding debt from the community administrator is a standard pre-completion item and should never be waived. Beyond that: an ageing building may face a derrama, a special levy for major works, and a reserve fund that has been allowed to run thin.
On the asset side, and this is the part sellers rarely think to mention, a resale inherits the unexpired remainder of the Ley 38/1999 warranties. A building five years past reception still carries five years of structural cover backed by compulsory insurance. A building two years past reception carries eight, plus one more year of habitability cover. That is genuine transferable value, it costs the buyer nothing, and it belongs in the conversation.
A resale may also carry an existing VFT registration on the Registro de Turismo de Andalucía, which converts an uncertain future application into a present fact. Given that Andalusian municipalities have been given the power to restrict tourist dwellings by zone, an existing registration on a property that already lets is worth more than it was a few years ago.
What does a new build carry that a resale does not?
The case for buying new is not primarily financial, and pretending otherwise is how buyers end up disappointed by the arithmetic above. New Costa del Sol stock is built to current building regulations, which means insulation, glazing, cooling and energy performance materially better than the coast’s large stock of 1970s to 1990s apartments. That shows up in running costs, in comfort during a Málaga August, and in energy certification, which matters increasingly at resale. It also shows up in maintenance: a new building should not need a derrama in its early years.
The layouts differ too. Contemporary developments are designed for how the coast is now used, larger terraces, open kitchens, secure parking, communal pools and gyms, whereas much older stock was designed around smaller units and different expectations.
And there is the selection argument, which is the one that genuinely moves buyers: buying early in a development means choosing the orientation, the floor and the view, rather than taking what remains. On a coastal property where sea view and aspect drive both enjoyment and resale, that choice has real value even though no spreadsheet captures it.
None of this repays a 4.2-point tax gap and two years of rent on its own. Taken together with a keen launch price, it sometimes does. The buyer’s job is to decide which of those things they are actually paying for.
Which risks belong to which option?
The risk profiles are not the same size; they are different in kind, and each is manageable by a different action.
| Risk | Off-plan | Resale |
|---|---|---|
| Non-delivery | Real; mitigated by the individual guarantee | None |
| Delay beyond the contracted date | Common; guarantee does not compensate for it | None |
| Specification differing from the show unit | Real; mitigate through the contract and the memoria de calidades | None, you see what you buy |
| Hidden structural defect | Covered ten years from reception | Covered only for the unexpired remainder |
| Inherited community debt | None | Current year plus three preceding |
| Special levy for major works | Unlikely in early years | Real in ageing buildings |
| Letting permission | Uncertain until the community and the municipality are known | May already exist and transfer |
| Market movement during the wait | Full exposure, in both directions | None |
That final row deserves a moment, because it is the one buyers describe as an advantage and it is symmetric. Buying off-plan means committing at today’s price to something delivered in two years. In a rising market that is a gain; in a falling one it is a loss, and the buyer is contractually committed either way. It is exposure, not upside, and it should be described as such.
What would change this answer?
The argument here is that timing and tax favour resale unless off-plan compensates. Three circumstances overturn it:
- A genuine launch discount. If a development prices early phases materially below the finished market, the discount can cover the tax gap and the forgone rent outright. This is real and does happen, but it must be measured against comparable finished stock in the same location, not against the developer’s own later phases.
- A short build period. The whole calculation scales with time. A development delivering in twelve months rather than thirty forgoes half the rent, and the case tightens considerably.
- If you are not letting the property. For a buyer purchasing for personal use, the forgone rent is zero and the entire cash-flow argument evaporates. What remains is a 4.2-point tax difference against a new building’s specification, warranty and choice of unit, a much closer contest, and one that reasonable buyers settle in either direction.
If none of these applies, the resale case is the stronger one and the burden sits with the off-plan proposal to show why it is not.
Which option suits which buyer?
Off-plan suits a buyer who wants a specific unit in a specific new development, who values current-regulation construction and a full warranty period, who can leave capital uncommitted profitably while instalments fall due, and who is not depending on rental income in the meantime.
Resale suits an income buyer almost by default: lower acquisition tax, rent from within weeks, a building whose condition can be inspected rather than promised, and often a letting registration already in place. It also suits any buyer who needs certainty of timing.
Neither suits a buyer comparing them on headline price alone. The 4.2-point tax gap and two years of rent do not appear in a price per square metre, and a comparison that omits them is not measuring the same thing on both sides.
Which buyer scenarios does each suit?
Off-plan suits the buyer who can fund roughly 18 to 30 months of staged payments with no income against them, and who values the Ley 57/1968 guarantee on every instalment plus the ten, three and one year warranties on delivery. This scenario needs the cash-flow gap modelled honestly rather than treated as a detail.
Resale suits the buyer who needs income from the first month, or who wants a known community with visible accounts and a track record rather than a projection. You give up the guarantee and the warranties, and a structural survey plus two years of accounts covers a good part of what they would have covered.
Neither suits a buyer comparing the two on price per m2 alone. The difference here is when the money moves and when it starts working, not what the metre costs. Build both cash-flow profiles across the same period, including the acquisition tax difference between 10% IVA plus AJD on new build and 7% ITP on resale in Andalucía.
What to verify before you commit
Insider tip: ask for the guarantee certificate itself rather than the developer’s statement that guarantees are in place. Under the Ley 57/1968 regime each instalment should be covered individually, and the certificate names the guaranteeing entity, the amount and the buyer. A developer who can produce it within a day is running a normal process; one who cannot has told you something worth knowing before the next payment falls due.
Most of this checklist is about documents rather than about the building, because the difference between the two options is a difference in what protects your money and when. An off-plan purchase moves cash across roughly 18 to 30 months before it produces anything, and each instalment is only as safe as the guarantee behind it. A resale produces income from the first month and carries no guarantee at all.
- For off-plan, obtain the individual bank guarantee or insurance policy in your own name for every instalment, and do not release funds without it in hand.
- Confirm the contracted delivery date and what the contract actually provides if it is missed: the guarantee returns your money, it does not pay you for the delay.
- Check the memoria de calidades against the show unit, in writing, and confirm what may be substituted.
- For resale, obtain the community’s certificate of no outstanding debt before completion, and read the last two years of minutes for any planned derrama.
- Ask what remains of the Ley 38/1999 warranty periods on a resale, and obtain the date of reception of the works.
- Confirm the letting position: whether an existing VFT registration transfers, or whether a new one is obtainable in that zone and permitted by the community.
- Model the tax explicitly at 11.2% for Andalusian new build and 7% for resale, and add notary, registry and legal work on top of both.
- Run the cash-flow curve, not just the price: when each payment falls due, when income starts, and what the uncommitted balance earns in the meantime.
Frequently Asked Questions
On tax, resale wins clearly in Andalucía: a flat 7% ITP against 10% IVA plus 1.2% AJD, a gap of 4.2 percentage points. On price per square metre it depends on the development and the vintage of the resale, with no reliable general rule. Off-plan starts 4.2 points behind and must earn it back through price, specification or warranty value.
A resale can let within weeks of completion. An off-plan unit produces nothing until delivery, typically eighteen to thirty months out, and nothing during any delay. Two years of forgone rent at around 5% gross is roughly a tenth of the purchase price, the largest single number in this comparison.
Every sum paid before delivery must be covered by an individual bank guarantee or insurance policy in the buyer's name, under the regime originating in Ley 57/1968 and now carried in the LOE. If the development is not delivered you call the guarantee directly. Supreme Court doctrine has also held receiving banks jointly liable where they took buyer money without ensuring the guarantee existed. It is real protection, and worthless if you never obtain the document.
It carries the unexpired remainder. Ley 38/1999 runs one year on finishes, three on habitability and functionality, and ten on structural elements from reception of the works, the last insurance-backed. A five-year-old resale still has five years of structural cover, transferring with the property and rarely priced into the negotiation.
Community debt above all: under the Ley de Propiedad Horizontal the property answers for unpaid charges for the current year and three preceding, and the liability follows the property. Get a certificate of no outstanding debt from the administrator. Ageing buildings may also face a derrama for major works.
Resale in most cases, and by more than the yield tables suggest: income from day one, 4.2 points less tax, and often an existing VFT registration. Off-plan suits an income buyer only where price, specification or letting characteristics repay two years of silence.
Further reading: the bank guarantee guide for the Ley 57/1968 regime in detail, developer delay risks for what the guarantee does not cover, and the off-plan property guide for the full process. On location, see Marbella against Estepona and the Costa del Sol investment guide.
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