New-build and off-plan purchases

It covers advance-payment guarantees, delayed delivery, tax on new builds, checking for defects before you accept the home, the structural guarantees, and buying a plot to build on. It is for anyone considering, planning or carrying out a move to Spain who is thinking of buying a home that is not yet finished, or has just been finished.

Start with "Buying off-plan in Spain, the full journey from reservation to keys". It walks you through each stage, document and payment in order, so the other pages make sense when you reach them.

Renovation permits, resale checks and mortgages are not covered here.

Key rules

• VAT on new homes: The first sale of a new home pays 10% IVA on top of the price, and each stage payment carries that IVA when you pay it.
• Interest on refunds: Refunded advance payments carry legal interest of 3.25%, counted from the date of each payment.
• Defect claim window: You must bring a claim for a building defect within two years from the date the damage appeared.
• Commitment: You are bound from the private contract, and sometimes from the reservation if it sets penalties.
• Reservation deposit: If you withdraw, you usually lose it; if the developer fails to deliver documents on time, it should be returned.
• Guarantee: The developer must guarantee your advance payments with a bank guarantee or insurance, and you should hold your own certificate or policy before paying.

New-build and off-plan purchases: the whole process, step by step

• Reserve the home and pay a small deposit (see the full journey article): At the start, before the main contract

• Check the advance-payment guarantee and the separate bank account before paying (see the article on how your advance payments are protected): Before you sign the private contract and before any stage payment

• Sign the private purchase contract and make the first payment, commonly around 10% plus 10% IVA: After the reservation, once the documents are reviewed

• Pay the stage payments during construction, each with 10% IVA (see the article on tax timing): Monthly or at construction milestones, each time you pay

• If delivery slips, check the contract's grace period, usually 3 to 6 months and sometimes up to 12, then decide whether to end the contract and claim a refund (see the article on delayed delivery): After the stated delivery date plus any grace period

• Sign the public deed before a notary and pay the balance and taxes: After the occupation licence is granted

• Inspect the home and write every defect in the handover record with dated photos; agree a repair deadline, often 30 days (see the snagging article): At handover, before you accept the keys

• The advance-payment guarantee ends once the home is delivered and the first occupation licence is granted: At delivery and deed

• Use the 1-year finishing, 3-year habitability and 10-year structural warranties, counted from the signed acceptance of the works (see the 10-year guarantee article): 1, 3 and 10 years after acceptance of the works

• Bring any defect claim once damage appears: Within two years from the date the damage appeared

Documents you may need

The home and the lease

• Your signed purchase contract — Buying off-plan in Spain, the full journey from reservation to keys, Delayed completion, what your contract says versus what the developer promised
• Licence of first occupation — Buying off-plan in Spain, the full journey from reservation to keys, Snagging a new Spanish home before you accept delivery
• Energy certificate and building book — Buying off-plan in Spain, the full journey from reservation to keys

Payments and receipts

• Individual guarantee certificate or policy for your payments — How your advance payments on a new build are protected
• The bank's details for the special account that receives your advance payments — How your advance payments on a new build are protected
• The bank guarantee or insurance policy covering your advance payments — Delayed completion, what your contract says versus what the developer promised

Guarantees

• Proof of the ten-year structural insurance — Buying off-plan in Spain, the full journey from reservation to keys

Other documents

• Escritura de obra nueva and división horizontal — Buying off-plan in Spain, the full journey from reservation to keys
• Architect's certificate of end of works — Buying off-plan in Spain, the full journey from reservation to keys
• Public deed of sale — Buying off-plan in Spain, the full journey from reservation to keys

Each article lists the other documents it asks for, where you need them.

New-build and off-plan purchases: questions that cross several articles

At what point am I committed when buying off-plan?

You are mainly committed when you sign the private purchase contract, and sometimes already at the reservation if it sets penalties. A reservation deposit, often 3,000 to 6,000 euros, is usually lost if you withdraw. Read the reservation terms in the full journey article and what happens if the developer withdraws in the article on delayed delivery.

Is my money safe if I pay stage payments during construction?

Your advance payments must be guaranteed by a bank guarantee or insurance, and the developer must receive them in a special separate bank account. The guarantee covers the payments plus legal interest, and the IVA paid with them is generally covered too. Read How your advance payments on a new build are protected to check the documents.

How much do I pay at each stage of an off-plan purchase?

A typical schedule is about 10% on signing the private contract, a further 10% to 30% during construction, and the balance of 60% to 70% at the deed, all plus 10% IVA. These are market norms and each developer sets its own. See the full journey article for the stages and the article on tax timing for IVA.

When does the guarantee on my payments end?

The guarantee ends when the home is delivered and the first occupation licence is granted. Until then, if the building is late, you can end the contract and claim your money back from the guarantor. Read the article on delayed delivery for your options and the snagging article for handover.