Many people know what their dream home is like and wonder whether they should buy or build a house. Both options have pros and cons, and what you decide depends on your needs, preferences and budget. Examine the implications to make the right choice. But is it cheaper to build or to buy a house in Spain? We have the details.
Is buying or building a house in Spain better?
There is no single or perfect answer to this question, but it depends on many factors. Here are some aspects and details to consider so you make the right decision for you:
- Budget
- What type of home you need
- Personalisation
- Efficiency and sustainability
- Renovations
- Land
- Location
- Property availability
- Quiet location
- Resale value
- Risks
Which is cheaper, building or buying a house?
Budget is one of the most important aspects to consider. How much can you afford to spend? Calculating the money you have available can point you in the direction of building or buying.
The first step in building a house in Spain is to get the land. If you don't have land, you'll have to buy it and have that amount to work out or calculate the total budget available. Moreover, plots of land require development, land surveying, inspections, etc., which will increase the project's end cost.
Land is also a factor that affects the property's location, as not all areas have plots of land available, or if they do, they are expensive. Bear all this in mind to determine which is cheaper.
If you want to buy a house, you also have to remember that most second-hand properties require some renovation, the cost of which will have to be calculated and added to the budget available. As for new builds, the budget can be more static but there are not always developments with the characteristics you want.
Something else to consider is that you need to have around 30% of the property value saved before buying a property (so that the bank will grant you the loan and pay the costs associated with the purchase), so if you don't have this, you may be better off buying a plot of land and building your house little by little.
In short, building a house from scratch may be more expensive, but this is not always the case.
Building and buying costs in Spain
Analysing the costs of building a house versus buying an existing one is essential for anyone deciding between these options. Each approach has its own complexities and variables that affect the final budget. Let's look at both scenarios to get a clearer perspective:
Costs of building a house in Spain
Building a house from scratch offers many advantages but poses challenges and extra costs. The main factors influencing the budget are:
- Buying land: the starting point is buying suitable land, the price of which varies significantly depending on location and soil type.
- Site preparation and permits: before building, the land may require development, including, for example, levelling, surveying, earthmoving and obtaining permits, paying fees, etc.
- Building costs: they vary widely depending on the materials, labour, house design and other factors, such as architects' fees.
- Fittings and furniture: when building a house, you'll have to buy most of the furniture, appliances and new elements.
- Additional costs: Don't forget to include the costs of installing utilities such as electricity, water, sewerage, asphalting, etc.
Costs of buying a house in Spain
Buying a house simplifies some aspects of the process, but it also has its own costs:
- Buying price: varies according to property location, size, condition, age and market situation.
- Renovations and repairs: second-hand homes may require upgrades or repairs, the costs of which should be assessed and added to the total budget.
- Buying costs: these include transfer taxes, notary fees, registration fees, fees, etc.
- Maintenance: consider the property's ongoing maintenance and possible long-term improvement costs. Moreover, other taxes and fees should be considered, such as IBI, rubbish tax, if there are community fees, etc.
Financing and loans (if any) should be added to these costs and expenses, which may be necessary in both situations.
Should I buy a plot of land or a house?
Firstly, clarify what kind of property you need now and in the future. Consider aspects like: Are you looking for a second home, a holiday home or a permanent home? Do you expect your family to expand soon? How many rooms do you need? Do you want a garden, swimming pool, etc.? All of this will influence whether you should buy a house or plot.
It is worth noting that building a house on a plot of land involves paying different taxes compared to buying a second-hand or a new build.
Buying-related taxes are generally higher, including VAT and stamp duty, etc. Moreover, building a house involves additional costs such as building permits, architects' fees and other professional fees, which you don't have to pay when buying a pre-built property.
Pros and cons of building rather than buying in Spain
If you're tempted by the idea of building a house rather than buying one, consider the following:
- Building a house gives you more personalisation power. However, it is not a given, as everything has to be feasible, and depending on the plot's characteristics, municipal regulations, and the local authorities, it may or may not be possible.
- Building a house from scratch and moving quickly are often incompatible. In this situation, prefab houses are an option, as they are built in much less time than traditional methods.
- If you're looking for a sustainable and efficient house, building one may be a better option than buying one, as you can design it taking advantage of natural resources. You can choose the orientation, bioclimatic design, etc.
- If you want a house in a particular area, you're more likely to find a property than land. In cities, there are not usually plots of land for sale in the most sought-after or central areas.
- The stress of such a big project takes its toll on many people. Not everything works out how you want it to: you can have problems, disputes, etc.
- Considering the property value, it is worth noting that the older a property is, the cheaper it will be unless it is being renovated and is in a very sound condition. If you build a house, it will be newer than a second-hand one and generally be worth more.
- Building a house from scratch means facing several risks that do not exist when buying a ready-built home, such as construction delays due to adverse weather conditions, labour problems or difficulties in the material supply chain. In addition, there is a risk that the final construction cost will exceed the initial budget due to unforeseen events or changes in the project.
Pros and cons of buying rather than building in Spain
If you are more inclined to buy rather than build a house, here are some considerations to bear in mind:
- When buying a pre-built home, there is less scope for personalisation, but it is possible. You can renovate it as you wish, as long as the property allows it. However, renovations increase the budget and the time it will take to move in. It is worth noting that new developments allow a great deal of personalisation within certain limits.
- If you need to move house soon, buying a pre-built house will obviously be much quicker than building one. There are always building delays, and what was one year suddenly becomes two.
- New houses are more sustainable than existing ones, although newly built houses need to be efficient to meet European standards. This could also be achieved in a pre-built house, depending on the property, but the cost of the work to achieve this would have to be added.
- There are not always plots of land in your desired location, but there are often ready-built houses.
- Buying a house is less stressful than building one from scratch, as you need to agree with the architect, builders, and contractors and be actively involved in the process.
- When buying an existing house, most risks can be identified and assessed in advance through an inspection.
