What to know before buying a new build property: a practical guide to avoiding mistakes

Buying a new build property is one of the most significant financial decisions you can make, offering notable advantages over choosing a home that requires renovations.

Below, we explain what you need to know before purchasing a new build, including all necessary documentation, taxes, additional expenses, and other key aspects to ensure the transaction is a success.

What documentation should you review before signing?

Before proceeding with the purchase agreement for any property, it is crucial to review the linked documents to confirm everything is in order. Specifically, you should prioritize the following:

• Building permit: which confirms the construction has municipal approval;
• Energy efficiency certificate: which is mandatory and useful for estimating energy consumption; and
• Specifications manual: which details the promised materials and finishes.
• Certified plans signed by an architect,
• Insurance guarantees: ensuring the developer has contracted the ten-year insurance known as seguro decenal.
• Land Registry report: which guarantees the land belongs to the developer and is free of charges.

What taxes and expenses will you have when buying a new-build home?

Purchasing a new build also involves additional costs, such as tax payments, which must be factored in when assessing the total acquisition cost. These typically include:

• IVA: usually 10% of the property value, and
• Stamp Duty (AJD): which varies by autonomous community but generally ranges between 0.5% and 1.5%.
• Notary and registry fees: are mandatory costs when formalizing the purchase, alongside
• Management fees: based on the specific services provided.

What warranties does the developer offer under the Building Act?

The Building Act (LOE) requires developers to be liable for various types of defects to provide security to buyers. These warranties include a:

• Ten-year period for structural defects affecting the building's stability
• Three-year period for flaws in construction elements affecting habitability
• One-year period for defects in finishes.

These periods begin on the date of delivery. For this reason, we always recommend demanding proof of the ten-year insurance policy, as it guarantees protection against serious structural issues.

Is it better to buy a completed new-build or one under construction?

In the new build sector, there are two main options: purchasing a home that is already finished or buying one that is still under construction. Both options offer key advantages and disadvantages:

• Timelines: A completed new build allows for immediate move-in, whereas a project still in progress may face potential construction delays.
• Specifications: Projects under construction carry a slight risk of changes to the materials initially proposed in the planning phase.
• Costs: Buying a finished property often requires a higher investment compared to a project in its early or constructive phases, where prices may be lower.

How to verify a developer’s reliability?

The reputation of the developer is a key factor. You should always seek to work with reliable, secure companies with a clear standing in the sector. You can do this by:

• Checking their track record: Investigate their previous developments and read client reviews regarding their experience with the company.
• Reviewing their solvency: Verify their financial health through official commercial registries.
• Insisting on separate bank accounts: Ensure that payments are made into specific accounts backed by bank guarantees.
• Checking official registrations: In some regions, you should verify that the company is listed in the official Registry of Developers.

Ready to take the next step?

Knowing how to purchase a new build property requires preparation, thorough document review, a clear grasp of costs, and the assurance of working with the best in the industry.

At Realia, we have been providing expert development, management, and property operation services across various real estate sectors since 2000.

Thanks to this extensive experience and the success of our previous projects, we currently offer completed new build developments such as Somnia Mare by Portum in Badalona Puerto, Realia Essència in Sabadell, and Realia Parque del Ensanche in Alcalá de Henares.

In addition to these opportunities, we also offer a wide variety of new build promotions currently on the market in different phases of construction, which we encourage you to discover.