When buying a property in Ibiza, many people find themselves torn between choosing a new-build home or a second-hand one. While new-builds often stand out for their modernity, design, and energy efficiency, there are strong reasons to consider purchasing a second-hand property, especially when considering the total cost of the transaction, including taxes.

1. Taxes: A Key Difference

One of the most significant factors differentiating the purchase of a new-build home from a second-hand property is the tax payment.

• New-Build Home: When buying a new property, you are required to pay VAT at 10% on the purchase price. This tax can represent a substantial cost, particularly in an area like Ibiza, where property prices tend to be high. For example, if you buy a house for €500,000, the VAT will be €50,000, which is a significant amount just in taxes.
• Second-Hand Home: On the other hand, when purchasing a second-hand property, instead of VAT, you pay the Property Transfer Tax (ITP). In the Balearic Islands, this tax is only 8% (for properties under €400,000). This means that for a property valued at €500,000, you would pay €40,000 in ITP, representing an immediate saving of €10,000 compared to the VAT on a new-build.

This tax saving can be a decisive factor for buyers looking to reduce the initial costs of their purchase.

2. Location and Space: Larger Properties in Established Areas

Another advantage of buying a second-hand home is that they are usually located in more established and central areas, where infrastructure and services are fully developed. Many second-hand homes also offer more space, both indoors and outdoors, which can be particularly appealing for families or those seeking more comfort.

In contrast, new-builds tend to be more compact and located in expanding areas, where services and infrastructure may not yet be fully developed.

3. Lower Initial Cost

As previously mentioned, the savings on the ITP compared to VAT is already a significant advantage. However, in addition to taxes, second-hand homes generally have a lower initial purchase price. Although some may require renovation, the total cost is often lower than that of a new-build, especially in high-demand areas like Ibiza.

4. What About Renovations?

A common argument in favour of new-builds is that they do not require immediate renovations. However, it is important to remember that many second-hand homes have been renovated and modernised by their previous owners, meaning they can be in excellent condition. Even if some renovations are needed, the cost of these works may be offset by the savings in taxes and the lower initial purchase price.

5. Resale Value

In many cases, second-hand properties in established areas have greater long-term resale potential. Prime locations, with nearby services and well-established neighbourhoods, can significantly increase in value over time, making second-hand homes a solid investment.

Conclusion: Why Is It Better to Buy a Second-Hand Home?

While new-build homes offer modernity and energy efficiency, the higher initial cost and taxes make them a more expensive option. Second-hand homes not only allow you to save on taxes like ITP, but they also tend to offer more space and better locations in already well-established areas.

If you’re looking to buy a home in Ibiza, at CASAVIVA Inmobiliaria, we help you explore the best second-hand options that suit your needs and budget. Contact us for personalised advice and to find your perfect property on the island!