Secondary market vs. primary market – which to choose?

When we decide to buy a property in Spain, we are faced with a choice – whether to buy a new house, in which no one has lived before and we can furnish it according to our own ideas, or to purchase it on the secondary market. Today we would like to briefly discuss both solutions.

Tailored to your preferences

Both property options have undoubted advantages that attract those interested in buying property in Marbella or other Andalusian cities.

Primary market

  • Modernity: new houses or residential complexes are nowadays built to the highest standards. By purchasing a property from a developer, which we will later adapt to our own ideas, we can be sure that it will include modern smart home solutions, a more functional layout or better acoustics.
  • Aesthetics: there is no denying that today’s architectural style is aesthetically different from that which was popular, for example, 20 years ago. Although the new buildings still retain an Andalusian, Mediterranean style, they can be distinguished from older buildings without the slightest hesitation. For many people, the new snow-white façades are a huge draw, acting on their sense of aesthetics.
  • Arrangement: when buying a property in Spain on the primary market, it will be up to you to decide how it is arranged and finished. This is a huge advantage for people who dream of having their home on the Costa del Sol decorated according to individual preferences. Depending on the developer, different materials and colour schemes are often offered. It should be remembered that the developer’s state in Spain differs from that known in Poland, and the property handed over to the owner is largely finished. The only thing left for the residents to do is to put in furniture and add a few lamps.
  • Economy: the last advantage that is often overlooked is the much lower costs associated with maintaining the premises. New housing estates are built with better materials that, among other things, retain heat better or guarantee lower electricity consumption thanks to more efficient installations, resulting in lower utility costs for the purchaser.

Secondary market

  • Location: secondary market properties in Spain are often located in areas that are inaccessible to new developments. If you prefer, for example, a house or flat on the front line of the sea, it will be much easier to find an offer that meets your criteria on the secondary market. The Costa del Sol coastline has been built up to an extent that makes it difficult for investors to build new residential complexes or detached properties in such a location.
  • Infrastructure: Housing estates on the secondary market are characterised by the surrounding well-developed infrastructure. Over the years, schools, roads, restaurants and shops have sprung up in the immediate vicinity, making everyday life more convenient.
  • Finalisation of the transaction: if we decide to buy a property on the secondary market, we can move into it immediately after signing the purchase/sale agreement. This is an element that is not available to those who decide to buy a property from a developer, as the date of delivery of a house or a flat is often postponed – for example by several months or even years. In the secondary market, the property is available immediately.

Buying a secondary or primary market property – different costs

The decision to buy a property in Spain on the secondary or primary market also involves various costs that we have to pay when concluding the transaction. In most cases, a total of approximately 8% to 13% of the value of the chosen property must be added to the price of the property. Additional costs include, among others, lawyer’s fees, notary fees and taxes. While the first two issues are identical for both markets, the difference comes in the case of tax issues.

Secondary market:

  • Property Transfer Tax (ITP) – currently only 7% of the value of a house purchased on the secondary market. Previously, there were different levels of taxation, but the Government of the Autonomy decided to standardise the ITP to encourage investors to buy property in Andalusia.

Primary market

  • VAT – if we buy a house from a developer, we have to pay VAT of 10% of the value of the property.
  • An AJD of 1.2% of the value of the property.

You can read more about the entire purchasing process here.

Record interest in real estate

Real estate on the Costa del Sol and throughout Andalusia has been receiving a huge amount of interest from investors over the past several months. The year 2021 was a record year in terms of the number of property acquisitions concluded. Across Spain, 564,000 were carried out, of which as many as 117,000 took place in Andalusia – more than 91,000 were in the secondary market and 25,000 in the primary market.

In addition, Andalusia was the only Spanish autonomy that managed to surpass the figure of 100,000 concluded property purchase contracts in Spain. These figures clearly indicate that Andalusia is today undoubtedly the most popular region for those interested in moving to the Iberian Peninsula to find a new home.

If you are interested in more detailed information on the property market in Spain and Andalusia, then take a look at our posts where we have discussed the market data: