When someone asks me whether it is better to invest in a new-build property or a resale home, they almost always start with the same question: which one appreciates more? It is a logical question, but an incomplete one. What really matters is how much money you have left in your pocket on the day you sell, and that depends on much more than the sale price.
In this guide I explain how I make that calculation, which costs are usually forgotten, and which factor, more than any other, determines the price you will be able to sell for.
If you are still deciding what to buy, start with the general comparison between new build and resale [PENDING LINK: New Build vs Resale pillar page]. Here I focus only on the financial side of an investment.
Selling price and profit are not the same thing
One of the most common mistakes is confusing a price rise with profit. If you buy a home for €500,000 and sell it for €600,000, the price has risen 20%. But that does not mean you have earned €100,000.
When you buy, you pay taxes, notary, land registry and other costs. While you own the property, you pay community fees, IBI (annual property tax), insurance and maintenance. And when you sell, you will have to pay the sales commission, municipal capital gains tax (plusvalía municipal) and income tax on the gain. When you add everything up, the real percentage is usually considerably lower than the headline figure.
What makes each type of property appreciate
There is no universal rule. Each type appreciates for different reasons.
New build tends to attract buyers for what it offers today: modern layouts, energy efficiency, up-to-date installations and fewer renovations in the short term. Resale can have an advantage when it is in an established location where there is almost no land left for new developments, or when it is bought below its potential value and improved with a well-planned renovation.
That is why I distrust promises of guaranteed appreciation percentages. Neither option guarantees it. It depends on the entry price, the exact location and the supply available when you sell.
The full calculation: three scenarios instead of one
To see how the result changes, I compare two hypothetical transactions with the same holding period: five years. Both have the same exit costs, which I estimate at 4% of the sale price (commission and selling costs). I do not yet include capital gains tax, which I explain further below.
We start from these figures:
- New build: purchase price €500,000, plus €65,000 in taxes and initial costs. Total investment: €565,000.
- Resale: purchase price €430,000, plus €40,000 in taxes and costs, plus €75,000 in renovation. Total investment: €545,000.
We also consider three sale scenarios, with a different price for each type of property:
| Scenario | New build sale | Resale sale | New build net gain | Resale net gain | New build total return | Resale total return | New build annual return | Resale annual return |
|---|---|---|---|---|---|---|---|---|
| Cautious | €600,000 | €590,000 | €11,000 | €21,400 | 1.95% | 3.93% | 0.39% | 0.77% |
| Base | €700,000 | €660,000 | €107,000 | €88,600 | 18.94% | 16.26% | 3.53% | 3.06% |
| Optimistic | €780,000 | €720,000 | €183,800 | €146,200 | 32.53% | 26.83% | 5.79% | 4.87% |
Illustrative example. It does not represent real market prices or appreciation. The gain is after selling costs and before capital gains tax, financing and holding costs.
Look at what the table shows. In the cautious scenario, resale comes out ahead, simply because it starts from a smaller investment. In the base and optimistic scenarios, new build wins, because the exit price is higher. The result depends on the assumptions, which is why it is worth testing several before deciding. A single scenario can give you whatever conclusion you want.
Remember too that the resale renovation is a cost that can rise. If it does, the numbers change. And if there are delays with licences or works, what you lose is time.
The factor almost nobody mentions: money is not invested in the same way
There is a difference that the simple calculation does not capture. In an off-plan purchase, most of the price is not paid up front. In the developments I work with, the usual pattern is to pay around 30% during construction and the remaining 70% at the deed signing. In a resale, you pay the full price at the deed signing, and the renovation is also paid in parallel.
This means that, with the same total figure, during the construction months you only have part of your money tied up. If you compare annual return rather than total return, the result can change quite a lot. Bear in mind that each development sets its own payment schedule, so check it in the contract.
Advance payments also carry a legal guarantee. Amounts you pay before the property is delivered must be secured by a bank guarantee or insurance, under Law 57/1968 and the first additional provision of the Spanish Building Act (Ley de Ordenación de la Edificación). Check this with your lawyer before making any payment.
Taxes and costs when you sell
These are the items to plan for when you sell. Confirm the exact amounts and percentages with your gestor or tax adviser, because they depend on your personal situation.
- Sales commission and transaction costs.
- Municipal capital gains tax (plusvalía municipal), calculated on the cadastral value of the land and the years of ownership.
- Capital gains tax. If you are a Spanish tax resident, it is taxed under IRPF (personal income tax). If you are a non-resident, it is taxed under IRNR (non-resident income tax), with different rates depending on whether you are resident in the EU or the EEA.
- Withholding on sale by non-residents. When a non-resident sells, the buyer must withhold 3% of the price and pay it to Hacienda (the Spanish tax authority). Confirm with your gestor which capital gains tax rates apply to you.
If you want to review what you pay when buying, I explain it in my article on taxes when buying a property in Spain.
What really determines the price you will be able to sell for
When people talk about appreciation, they almost always talk about the area. I would add another factor which, in my experience, weighs just as much or more, and which almost nobody explains: what you will be competing against on the day you want to sell.
If you buy in a new-build development, when you decide to sell, your home will compete with the units the developer still has available and with the later phases of the same project. A developer can adjust prices, offer payment terms or launch new phases. As a private owner, you do not have that flexibility.
If you buy a resale, your competition is the second-hand supply in the surrounding area and nearby new developments. That supply can be limited if the area is established, and that is where resale has its advantage.
So, before buying with a view to appreciation, I recommend asking:
- How many units are still unsold in the development, and in which phases.
- Whether other developments are planned in the same area, and when.
- What is currently selling in the area, and at what price per square metre.
- Who the likely buyer of that property will be in five years’ time.
The checks before reservation, such as the developer, licences and guarantees, are explained in my guide to the 10 essential questions to ask before buying off-plan.
Appreciation in Sotogrande, Estepona and Benahavís
The Costa del Sol markets are very different from one another, which is why I do not recommend applying a single appreciation percentage to the whole area.
For reference, these are the asking prices per square metre that Idealista published in September 2026:
- Estepona: €5,021/m², 17.1% more than a year ago.
- Benahavís: €5,602/m², 6.5% more than a year ago.
- Sotogrande: €4,082/m², 11.1% more than a year ago and the highest level in the series.
These are asking prices, not actual sale prices, and they do not distinguish between new build and resale. They are useful for seeing the trend, but not for calculating what you would get when selling a specific property. The fact that prices have risen strongly over the last year does not guarantee they will keep doing so. A rapid rise can also mean you are already buying at a high price.
Sotogrande combines established properties, detached villas and contemporary developments. Golf, the marina and the residential setting all influence the appeal of each property. You can find more detail in my Sotogrande guide.
Estepona combines areas close to the beach, urban areas and new-build developments. Here the exact location and the supply of comparable properties make the difference. You can find more information in my Estepona guide.
Benahavís is known for its golf urbanisations, villas and residential developments. I explain it in detail in my Benahavís guide.
When each option tends to work better
There is no single answer, but there are some guidelines I find useful:
- New build tends to fit better if you want to pay in stages, you do not want to take on a renovation, and the development is in an area with sustained demand.
- Resale tends to fit better if you find a location that is hard to replicate at a price that makes the renovation worthwhile, and you have the experience or support to manage works and licences.
- In both cases, the longer the holding period, the less the entry and exit costs weigh on annual returns.
Although I specialise in new build, when a client asks me about a resale, I prefer to explain its advantages and risks clearly rather than recommend something that does not fit their goals.
Frequently asked questions about property appreciation
How much does a new-build property appreciate?
There is no guaranteed percentage. It depends on the purchase price, demand, location and market trends. A development may increase in value during construction, but it may also hold its value or lose it.
Is it better to buy new build or resale as an investment?
It depends on the purchase price, the renovation cost in the case of a resale, and how long you plan to keep the property. The most reliable approach is to compare complete scenarios rather than rely on a single number.
Is buying off-plan more profitable?
It can be, if the entry price is competitive and the market performs well. It also involves risks related to timelines, construction and future demand. And paying in stages can improve annual returns, because your money is invested for less time.
What taxes do I pay if I sell at a profit?
Municipal capital gains tax and capital gains tax, which depends on whether you are a tax resident or non-resident. Check your situation with a tax adviser before selling.
Does location matter more than the age of the property?
It is often one of the decisive factors, but it should be weighed together with the purchase price, the condition of the property, the costs and the competition it will face when you sell.
Choosing well matters more than getting the appreciation right
Before thinking about how much a property might rise in value, check whether you are buying a good property at a reasonable price. Appreciation is a consequence of that, not a starting point.
I am Celeste Alonso and I have been working in the property market since 2007. At The Property Agent I specialise in new build and off-plan properties between Sotogrande and Benahavís, helping domestic and international buyers compare projects and understand their terms. You can learn more about how I work in my professional profile [PENDING LINK].
Want to compare new build and resale for your investment on the Costa del Sol?
I can help you work through the numbers for each option, compare developments and organise the purchase process together with your independent lawyer. Get in touch and we will take a look.
Celeste Alonso, The Property Agent
WhatsApp: +34 637 22 79 86
Email: [email protected]
This content is for information only. The examples are hypothetical and do not constitute guarantees of return or appreciation, nor tax or legal advice.
