Buying a New Build or Existing Home in the Canary Islands: The Pros and Cons

The Canary Islands, a Spanish archipelago located off the northwest coast of Africa, are well-known for their stunning landscapes, subtropical climate, and vibrant culture. Over the years, the islands have become a hotspot for property investment, attracting both locals and international buyers seeking either a holiday home, investment property, or primary residence. When considering a property purchase in the Canary Islands, one of the first and most consequential decisions is whether to buy a new build or an existing (resale) home. Each option presents distinct advantages and drawbacks, dictated by factors ranging from cost, location, and amenities to legalities and lifestyle preferences.

This comprehensive guide delves deep into the topic, contrasting the pros and cons of buying a new build versus an existing home in the Canary Islands. Whether you’re a retiree, an investor, or a first-time buyer, understanding these differences can help you make an informed and fulfilling purchase.

Understanding the Property Market in the Canary Islands

The Canary Islands’ real estate market is shaped by its unique geography, culture, and economic climate. The main islands—Tenerife, Gran Canaria, Lanzarote, and Fuerteventura—offer diverse locations, from bustling urban centres to tranquil seaside villages.

• Diverse landscapes: From volcanic terrains and black sand beaches to lush forests and arid plains.
• Tourism-driven economy: Influences the demand for holiday homes, especially in tourist hotspots around Las Palmas, Santa Cruz, Costa Adeje, and Puerto del Carmen.
• Growing foreign interest: Particularly among UK, German, and Nordic buyers, driving up demand for both new builds and resales.

Understanding these factors provides context as to why the choice between a new build or existing home is more than a matter of property age—it’s a decision that affects every aspect of property ownership on the islands.

Defining New Builds and Existing Homes

What Qualifies as a New Build?

A new build (obra nueva) refers to a property that has been recently constructed and has not been previously inhabited. It could be within a complex or a standalone home and is usually bought directly from a developer or builder. New builds might also include "off-plan" properties, which are sold before construction is completed.

What Defines an Existing (Resale) Home?

An existing home (segunda mano or reventa) refers to a property that has been previously owned and is up for sale. These can range from modern apartments to historic villas, and vary widely in age, style, and condition.

Having clarified this distinction, let’s explore the advantages and disadvantages of each to help you decide which is the better fit for your aspirations in the Canary Islands.

The Pros of Buying a New Build in the Canary Islands

1. Modern Design and Amenities

One of the major draws of new builds is their contemporary design and up-to-date amenities. Properties are built to current standards, often offering:

• Open-plan layouts
• State-of-the-art kitchens and bathrooms
• Energy-efficient systems
• Smart home technology
• Modern security features
• Communal facilities, such as gyms, pools, gardens, and children's play areas

For buyers seeking a "move-in ready" home with the latest features, new builds are unmatched.

2. Energy Efficiency and Sustainability

With growing environmental awareness, developers in the Canary Islands are integrating energy-efficient standards into new constructions. Features may include:

• Double-glazed windows for insulation
• Solar panels for water heating
• High-grade insulation
• Eco-friendly materials
• Optimized orientation for natural light

Greater sustainability means lower utility costs and a reduced carbon footprint—benefits that appeal to modern buyers and future-proof your investment.

3. Customization Opportunities

Purchasing an off-plan new build often allows buyer customization. You may be able to select:

• Flooring types
• Kitchen fittings
• Color schemes
• Bathroom fixtures

This degree of personalization enables you to create a home that matches your tastes and lifestyle needs from the outset.

4. Lower Maintenance and Peace of Mind

With all-new materials and warranties in place (often 10 years for structural issues), the likelihood of unexpected repairs is minimal. Common benefits include:

• Less wear and tear
• Manufacturer-backed appliance guarantees
• Structural insurance ("decenal" insurance)

This translates to time and cost savings, particularly attractive for non-resident owners or those seeking a hassle-free second home.

5. Regulatory Compliance and Legal Protection

New builds must meet the latest Spanish building codes and legal standards, offering buyer protection. This reduces the risk of hidden legal or planning issues, such as:

• Non-permitted extensions
• Illegal alterations
• Outdated certifications

Many new build contracts come with bank guarantees covering deposits paid prior to completion, further safeguarding your investment.

6. Attractive Payment Plans

Developers typically offer structured payment plans for new builds (usually staggered between reservation, construction milestones, and completion). This offers:

• More time to raise funds
• Portfolio management flexibility for investors
• The ability to plan finances ahead of occupancy

For buyers needing time to arrange their affairs, this can be a major plus compared to the one-time payment typically required for existing homes.

The Cons of Buying a New Build in the Canary Islands

1. Construction Delays and Project Risks

One of the most cited drawbacks of buying a new build is the risk of construction delays or, in rare circumstances, project abandonment (though regulation has improved since the 2008 financial crisis). Possible issues include:

• Delays due to permitting or supply chain disruptions
• Unexpected developer or contractor insolvency
• Changes to plans or specifications

If your move is time-sensitive or you plan to rent the property immediately, these uncertainties could be problematic.

2. Higher Purchase Costs and Taxes

New builds generally carry higher taxes in Spain. In the Canary Islands, buyers typically pay:

• IGIC (Impuesto General Indirecto Canario), the Canary Islands’ version of VAT, at a rate of 7% on new builds
• Stamp duty (AJD) typically at 1%

By comparison, resales incur the property transfer tax (ITP), also usually set at 6.5% in the Canaries. Other costs, such as notary, registry, and legal fees, are similar.

3. Less Mature Neighborhoods

New developments are sometimes located in up-and-coming or recently built areas. This may mean:

• Less established infrastructure (schools, shops, restaurants)
• Construction noise for months or years if the area is still being developed
• Lack of established community

If you value a vibrant local atmosphere and mature surroundings, this could be a notable downside.

4. Limited Character and Uniqueness

Many new builds, especially in larger developments, have a uniform aesthetic. They may lack the historical features, craftsmanship, or quirky charm that some buyers seek in Mediterranean or Canarian homes:

• No original tilework, wooden beams, or traditional stonework
• Less architectural diversity

If you prioritize architectural individuality, a new build might feel generic or impersonal by comparison.

5. Potential for Snags and ‘Teething Troubles’

While a brand-new home eliminates older property issues, it is not immune to construction defects, snagging, or unfinished non-structural work:

• Minor plumbing or electrical issues
• Paintwork defects
• Finishing delays in landscaped gardens or communal areas

Although covered by builder warranties, buyers should still allocate time for thorough inspections and follow-ups with the developer.

The Pros of Buying an Existing Home in the Canary Islands

1. Rental History and Proven Value

Existing homes, particularly those in established areas, often come with a track record of rental income, occupancy, and price appreciation. This allows buyers to:

• Analyze real-world rental yields
• Gauge occupancy rates in the local market
• Assess potential for capital gains based on historical data

Especially valuable for investors or buyers seeking immediate rental returns.

2. Immediate Availability and Move-In

Unlike new builds, existing homes are typically ready for immediate occupancy:

• Perfect for relocating quickly or starting holiday rentals without delay
• No construction or developer timeframes to navigate

This makes resales the go-to option for buyers with urgent needs or specific timeframes.

3. Character, Authenticity, and Historical Features

Many existing homes in the Canary Islands boast unique architectural styles, traditional features, and a sense of history:

• Charming village houses with Canarian balconies and volcanic stone walls
• Historic townhouses in Santa Cruz or Las Palmas
• Handcrafted tiles and original fireplaces

If you’re drawn to properties with personality, buying an existing home offers plenty of choice.

4. Established Neighborhoods and Infrastructure

Resale properties are usually situated in areas with fully developed infrastructure:

• Better access to public transport, schools, shops, and healthcare
• Mature landscaping and communal facilities
• Active local community and neighborhood life

This is especially beneficial for families or those seeking a lively, social environment.

5. Potential to Negotiate on Price

Unlike new builds, which often have fixed pricing, the market for resales can allow for price negotiation:

• Sellers may be open to offers, especially if motivated by personal circumstances
• The potential to secure bargains on properties in need of updating or quick sales

Experienced buyers or skillful negotiators can maximize value by leveraging market conditions.

6. Lower Taxes and Reduced Purchase Costs

As mentioned earlier, buying a resale involves paying the property transfer tax (ITP) (6.5% in the Canaries), which can be less than the IGIC and AJD associated with new builds. This translates to:

• Lower upfront costs for purchase

Other purchase fees—such as the notary, registration, and lawyer—are broadly similar.

The Cons of Buying an Existing Home in the Canary Islands

1. Outdated Systems and the Need for Renovation

Many existing homes may show their age, with outdated wiring, plumbing, insulation, and fixtures. Common challenges include:

• Old-fashioned kitchens and bathrooms
• Limited energy efficiency
• Structural repairs or damp issues, especially in coastal or historic areas

Renovation can be rewarding but requires time, effort, and a realistic budget appraisal.

2. Hidden Legal or Technical Issues

Some resale properties come with complex histories that might complicate the purchase:

• Unpermitted extensions or alterations
• Boundary disputes
• Missing or outdated documentation (title deeds, habitation certificates, energy certificates)

A qualified surveyor and solicitor specializing in Spanish property law are recommended to ensure the property is free from encumbrances.

3. Higher Maintenance and Running Costs

Older properties can entail:

• More frequent repairs
• Inefficient heating, cooling, or insulation systems
• Higher insurance premiums

Long-term costs can outweigh initial savings if significant upgrades are needed.

4. Limited Customization Opportunities

While you can always renovate, major structural changes to an existing home may be restricted by:

• Structural limitations
• Local planning permissions
• Constraints in listed buildings or protected areas

Buyers with a specific vision may find these obstacles daunting or expensive to overcome.

5. Greater Competition in Highly Sought-After Areas

Prime locations on the Canary Islands, especially along the coastlines and in established resorts, are highly competitive. This can result in:

• Bidding wars over popular properties
• Little room for negotiation on price
• Stock shortages of desirable properties

Buyers need to move quickly and work with local agents to secure the best opportunities.

Comparative Analysis: New Build vs Existing Home

Let’s compare key factors side by side to illustrate the main differences between new builds and existing homes in the Canary Islands:

Factor	New Build	Existing Home
Purchase Price	Usually higher, less negotiable	Potential for bargaining, lower initial price
Taxes & Fees	IGIC (7%) + AJD (1%)	ITP (6.5%)
Availability	Off-plan/under construction; delayed move-in	Immediate occupancy, instant rental yield
Customization	Possible if buying off-plan	Limited; changes may require permits or structural work
Maintenance	Minimal, with warranties	Possible need for updates and repairs
Neighborhood	Emerging areas; facilities developing	Established communities; mature infrastructure
Character	Modern, uniform	Charming, unique, historical features
Legal Risks	Lower, due to modern compliance	Potential for unresolved legal or planning issues
Rental Yields	Variable, new market entry	Known history, easier to forecast

Case Studies and Real-Life Examples

Case Study 1: The Investor’s Perspective

Background: Anna, a UK-based investor, is interested in maximizing short-term holiday rental income in Tenerife. She's weighing a new build apartment in a modern complex against a well-established villa in Costa Adeje.

• New Build: The apartment offers high energy efficiency, amenities like a pool and gym, and a flexible payment plan. However, completion is 18 months away and the area is still "up and coming."
• Existing Home: The villa requires some upgrading, but boasts sea views, proximity to restaurants, and is in a sought-after rental location with a proven track record.

Outcome: Anna chooses the existing villa, reasoning that immediate rental yields and established market data offset her renovation outlay.

Case Study 2: The Retiree’s Perspective

Background: Peter and Linda, newly retired from Ireland, want a "lock-up-and-leave" home for extended stays. They appreciate both comfort and low maintenance.

• New Build: A townhouse in a gated community, with a builder’s warranty, offers peace of mind and communal facilities—including gardens and a pool. Downsides include ongoing construction in adjacent phases and a lack of mature surroundings.
• Existing Home: An apartment in a bustling village, full of character but with dated interiors and no lift access.

Outcome: Peter and Linda opt for the new build, prioritizing convenience and confidence in build quality over character.

Legal Considerations and Due Diligence

Buying a New Build: Essential Precautions

Even with greater regulatory controls, buyers should:

• Ensure the developer provides a bank guarantee for deposits
• Only sign contracts after independent legal review
• Confirm that all planning permissions have been granted
• Obtain copies of building licenses, plans, and habitation ("cédula de habitabilidad") certificates
• Check delivery timescales and the terms of penalties for late completion

Buying an Existing Home: What to Check

Due diligence for resales means extra checks, such as:

• Clear title and ownership status
• No unpaid utility bills, community fees, or municipal taxes
• Verification of property boundaries
• All necessary building permissions for alterations
• Energy efficiency certificate (EPC)
• Structural surveys for older or historic homes

Financing Options and Mortgage Availability

Mortgages for New Builds

Some developers have agreements with local banks for developer-linked mortgages. These may offer:

• Attractive rates
• Simplified application process

However, it’s important to compare with the wider market and consider factors such as early repayment fees and loan-to-value ratios. Banks may finance up to 70% of the purchase price for non-residents.

Mortgages for Existing Homes

When buying a resale, buyers can approach any bank of their choice. Mortgage terms may vary based on:

• Property age and condition
• Location desirability
• Buyer’s financial standing

Older properties requiring renovation may be valued cautiously by lenders, potentially reducing the mortgage amount available.

Location Factors: Island, Region, and Surroundings

Whether you choose a new build or existing home, the specific island and address can be even more critical than property age. Factors to consider include:

• Island climate (warmer in the south, more temperate in the north)
• Proximity to beaches, natural parks, or urban amenities
• Accessibility to airports (Tenerife South, Gran Canaria, etc.)
• Tourist activity levels (impacting rental yields and lifestyle)

Popular areas for new builds often include the southern resorts of Tenerife and Gran Canaria, whereas charming historic homes may be more common in old towns such as La Orotava or Arrecife.

Practical Tips for Buyers

• Define your priorities early: Lifestyle, location, rental yield, maintenance effort, and architectural style.
• Budget for all costs: Not just the purchase price, but taxes, legal fees, and any required renovations.
• Use independent legal and financial advisors: Avoid conflicts of interest by selecting professionals not connected to the seller or developer.
• Visit the property and neighborhood in person, if possible
• Research the developer’s track record (for new builds): View previous projects and customer reviews.
• Commission a building survey, especially for older homes
• Consider long-term plans for resale or inheritance: Some family circumstances may favor newer homes with better accessibility.
• Stay up-to-date with legal changes: Non-EU buyers, in particular, should follow any changes to residency laws or property rights.

Off-Plan Purchases: Special Considerations

Buying “off-plan” can be particularly advantageous:

• Lower launch prices
• Greatest choice of units
• Potential for capital appreciation before completion

However, the risk profile is higher—always seek a bank guarantee and clear completion dates. Monitor the developer’s financial health and read reviews from previous customers.

Significant Trends and the Evolution of the Canaries Property Market

The Canaries' real estate market is influenced by shifting demographics, increased demand for eco-friendly homes, and stronger local and EU regulations.

• Remote working trends have increased demand for both new builds with office space and resales in scenic villages.
• Golden Visa and residency rules have fluctuated over the years, affecting non-EU buyers’ decisions.
• Evolving sustainability standards incentivize new build projects with eco-friendly features.
• COVID-19 has accelerated interest in homes with terraces, gardens, or proximity to nature—benefiting both modern developments and characterful village properties.

Future Outlook: Should You Buy New or Existing?

There is no universal answer, as the best option depends on your financial situation, goals, and lifestyle desires. As a rule of thumb:

• Buy a new build if you want modern comforts, energy efficiency, peace of mind, and can wait for completion.
• Choose an existing home if you are drawn to unique character, established neighborhoods, immediate occupancy, or see value in renovation.

Whatever your decision, thorough due diligence and independent advice are your best safeguards to enjoying a successful and rewarding real estate journey in the Canary Islands.

FAQs: Buying Property in the Canary Islands

1. Can non-residents buy property in the Canary Islands?
   Yes; there are no restrictions on property ownership for foreigners in the Canaries. However, different tax rules may apply depending on residence status.
2. Do I need a local bank account to buy property?
   While not strictly necessary, opening a Spanish bank account is strongly recommended for paying utility bills, local taxes, and mortgage repayments.
3. How much are notary and registration fees?
   Typically, allow 1–2% of the property price, but fees can vary depending on the value and municipality.
4. Are property prices rising in the Canary Islands?
   Prices have shown steady growth, particularly for high-quality homes in popular locations. However, the market can fluctuate due to economic factors, tourism trends, and regulatory shifts.
5. Can I obtain a mortgage as a non-resident?
   Yes; many Spanish banks lend to non-resident buyers, typically up to 70% of the property’s appraised value.
6. What annual costs should I expect as a homeowner?
   Budget for local property tax (IBI), rubbish collection fees, community charges (if in a complex), insurance, and utility bills.

Conclusion: Making Your Choice in the Canary Islands

The choice between buying a new build or an existing home in the Canary Islands is highly personal—and best arrived at through a clear understanding of your needs, budget, and long-term objectives. Each route offers significant benefits and presents challenges that must be carefully weighed.

New builds promise modern convenience, lower maintenance, and greater legal reassurance at a premium price and potential for delays. In contrast, existing homes offer character, established locations, immediate use, and negotiable pricing, but may demand more ongoing care and due diligence.

Whether you fall for the gleam of a cutting-edge apartment in Playa Blanca or the timeworn charm of a village house in Gran Canaria, let the Canaries’ sun-soaked promise be your guide. With research, prudence, and an eye on the future, your island dream can become a rewarding reality.