Buying off-plan in Spain, the full journey from reservation to keys

Terms used

• Contrato de compraventa — The contrato de compraventa is the private purchase contract with the developer, and it is your main binding commitment.
• Escritura de obra nueva — The escritura de obra nueva is the notary deed that declares a newly built building and registers it in the Land Registry.
• Licencia de primera ocupación — The licencia de primera ocupación is the town hall licence confirming a finished building matches its permit and is fit to live in.
• Escritura — The escritura is the public deed signed before a notary that transfers the home to you.
• IVA — IVA is Spanish VAT, charged at 10% on new homes.
• AJD — AJD is stamp duty on documented legal acts, set by each region, charged on new-build purchases.
• Seguro decenal — The seguro decenal is the developer's ten-year insurance against structural defects.
• Cédula de habitabilidad — The cédula de habitabilidad is a certificate that a home is fit to live in, used in some regions.

Key rules

• 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: Do not pay stage payments without an individual guarantee for your money in your name.
• Taxes: New homes pay 10% IVA plus regional stamp duty, not the resale transfer tax.
• Before the deed: Make sure the licence of first occupation and the ten-year insurance are in place before you sign the deed.

The order things happen

Buying off-plan follows seven steps:

1. Reservation contract and small deposit.
2. Private purchase contract (contrato de compraventa) and first payment.
3. Stage payments during construction.
4. Registration of the new building (escritura de obra nueva).
5. Licence of first occupation.
6. Public deed (escritura) before a notary.
7. Handover of keys.

Your real commitment starts at step 2. It can start at step 1 if the reservation contract sets penalties, so read it before you sign.

1. Reservation

A reservation takes the home off the market for a short time. You use that time to review documents while the developer prepares the main contract. Deposits are typically a few thousand euros, often 3,000 to 6,000 euros.

• If you withdraw, you usually lose the deposit.
• If the developer fails to deliver the required documents or the main contract on time, the deposit should be returned.
• If the developer withdraws after taking your deposit, you can claim it back, often doubled, if the contract is drafted that way.

Refunds depend on the exact wording, so check it before paying. Do the checks in the checklist below before you hand over money. The developer must also guarantee deposits taken for homes under construction.

2. Private contract: the main commitment

The private contract is on the developer's standard form. Do not treat it as a formality. It is your main binding document. Expect to pay about 10% of the price, less the reservation, plus 10% IVA. This is market practice, not a legal rule.

Before signing, check:

• The price, the payment schedule and the delivery date.
• The description of the home and its finishes.
• The guarantee for your payments.
• What happens if the developer is late.
• Any clause that looks one-sided. Unfair clauses are void under consumer law, but it is easier to spot them before you sign.

You are entitled to pre-contract information from the developer, so ask for it in writing.

3. Stage payments

A typical schedule is a further 10% to 30% in instalments during construction, monthly or tied to milestones. Amounts are plus 10% IVA. Each developer sets its own schedule in the contract.

Never pay without a guarantee for your money. It should be an individual certificate or policy in your name, in place before or when you make the payment.

4. Registering the new building

The escritura de obra nueva declares the finished building before a notary and registers it in the Land Registry. The división horizontal sets up the individual homes, their shares and the community rules. Usually the developer completes both before the first sale deeds. The registry also asks for the energy certificate and the libro del edificio.

The architect's certificate of end of works (certificado final de obra) is needed for this step.

5. Licence of first occupation

The town hall issues the licencia de primera ocupación after checking that the finished building matches the building licence and is fit to live in. The developer applies for it with the certificate of end of works. Without it, you may struggle to connect permanent electricity, water and gas.

Rules differ by region. Some regions use a cédula de habitabilidad (Catalonia, Valencia, the Balearics). Others replace the licence with a responsible declaration of first occupation. Ask the developer which applies and request a copy.

The developer must also have the ten-year structural insurance (seguro decenal) before the sale deed. Ask for proof.

6. The deed before a notary

At the notary you pay the balance, usually 60% to 70% of the price, often financed by a mortgage. You also pay taxes. A new home from a developer is taxed with 10% IVA plus stamp duty (AJD), which each region sets, commonly 0.5% to 1.5%. Resale homes are taxed differently, so do not apply resale costs to your budget. Confirm the current regional rate with your regional tax agency.

Before signing, check that the documents from steps 4 and 5 are ready and that the notary has the draft deed in advance.

7. Handover

Inspect the home before accepting the keys. Compare it with the contract and list any defects in writing. The ten-year insurance covers structural defects.

Where to go next

The documents list, the warnings and the FAQ below cover the details. If you are still deciding between a new and a resale home, use the decision below.

Choosing between options

Should you buy a new home from a developer or a resale home?

• Buy from a developer (off-plan or new-build): Choose this if you want the statutory protections: guaranteed advance payments, a ten-year structural insurance and consumer law. You pay IVA plus stamp duty (AJD, set by each region, commonly 0.5% to 1.5%), you sign the developer's standard contract, and you pay in stages.

• Buy a resale home: Choose this if you want to move in sooner and pay one price on one deed. You pay transfer tax (ITP, set by each region, typically 6% to 10%) and no IVA. Protection comes mainly from general civil law on hidden defects and from checking the property register.

Compare the total cost in your region, IVA plus AJD against ITP, then weigh it against how much buyer protection and how much waiting time you accept.

Documents you need

• Reservation contract, signed with the developer. It takes the home off the market for a short time while you review the documents and the developer prepares the main contract.

• Private purchase contract (contrato de compraventa), on the developer's standard form. This is your main binding commitment and sets the payment schedule.

• Escritura de obra nueva and división horizontal, signed before a notary and registered in the Land Registry by the developer. It declares the new building and sets up each unit, its share and the community statutes.

• Architect's certificate of end of works (certificado final de obra), issued once construction is finished. The developer needs it to apply for the occupation licence.

• Licence of first occupation (licencia de primera ocupación), issued by the town hall. In some regions you get a cédula de habitabilidad or a responsible declaration of first occupation instead.

• Proof of the ten-year structural insurance (seguro decenal), which the developer must have before the sale deed.

• Energy certificate and building book (libro del edificio), which the registry asks for.

• Public deed of sale (escritura) signed before a notary, where you pay the balance and taxes before receiving the keys.

Checks before you pay a developer

• Ask the developer, in writing and free of charge, for its identity and tax details, the building licence or planning status, the project description with plans, and the builder's and architect's details.

• Ask for a nota simple from the Property Registry (Registro de la Propiedad), online or in person, for the plot or building.

• Check on the nota simple that the developer is the registered owner and that the obra nueva (new building) declaration is registered.

• Look for mortgages and embargoes registered against the land, and ask the developer whether it has a construction mortgage on the building.

• If there is a construction mortgage, ask for the right to take over your share of it, or for the lender to divide it (división de hipoteca) and release your home when you pay.

• Ask for the individual guarantee certificate or policy covering your payments, issued in your name before or when you pay.

• Check that the guarantee names you, the home, the developer and the amounts covered.

• Confirm that the bank is in the Bank of Spain register of credit institutions, or that the insurer is in the DGSFP register of insurers (Spain's insurance regulator).

• Contact the bank or insurer directly to confirm the guarantee exists, and check the payment account with a lawyer.

• Check that the contract names the parties and the home, with plot, plans, built area and registry data, plus the total price, payment schedule and the account that receives your payments.

• Check that a detailed memoria de calidades (list of materials and finishes) is attached, covering materials, insulation, windows, kitchen, bathrooms and energy rating.

• Compare the useful and built areas in the contract with the plans, and see whether common elements are included.

• Read the area-tolerance clause: it should state the price per square metre and a price adjustment or right to cancel if the difference goes past the tolerance.

• Check that the developer can only change the home when the architect, licence or authorities require it, or to use equivalent-quality materials, without reducing quality or area.

• Find the delivery date and any grace period; make sure it is short and clearly defined, and that it does not remove your right to terminate afterwards.

• Look for clauses that charge you the plusvalía (a municipal tax on land value) or the developer's mortgage costs, and ask for them to be removed.

• Check that the contract names the defect insurance, the licence status and how disputes are resolved, then have a lawyer review the full contract before you pay.

What to watch out for

• Losing the reservation deposit: If you withdraw after reserving, you usually lose the deposit, often 3,000 to 6,000 euros. A reservation that sets penalties can commit you before any main contract exists. Read the reservation terms before paying, and only pay once you know what happens if you withdraw or if the developer fails to deliver the documents on time.

• Treating the private contract as a formality: The private purchase contract is your main binding commitment, with a first payment of around 10% plus IVA. Walking away afterwards can cost you money. Have a lawyer read the contract before you sign and check that your payments are guaranteed.

• Paying without a guarantee for your money: Advance payments for a home under construction must be guaranteed by the developer. Without that, your money is at risk if the project fails. Do not pay any stage until you hold the guarantee in your name.

• Unfair clauses in the developer's standard contract: The contract is the developer's own form, and some clauses may be unfair to you. Unfair clauses are void under consumer law, but sorting that out later is slow. Ask for changes to anything one-sided before signing.

• Assuming resale rules and costs apply: A developer sale pays IVA plus stamp duty (AJD), not the resale transfer tax. Budget accordingly. Ask your regional tax agency for the current AJD rate in your region.

Frequently asked questions

Do I lose my reservation deposit if I change my mind?

Yes, if you withdraw, you usually lose the reservation deposit, which is often 3,000 to 6,000 euros. If the developer fails to deliver the documents or the main contract on time, the deposit should be returned. If the developer pulls out, you can claim it back, sometimes doubled if the contract says so.

At what point am I actually committed to buying off-plan?

You are mainly committed when you sign the private purchase contract, which usually comes with a first payment of around 10% plus IVA. A reservation can also commit you earlier if it sets penalties, so read its wording before paying.

How much of the price do I pay before the keys?

Typically the balance of 60% to 70% is paid at the deed and handover, often with a mortgage. Before that you pay the reservation, about 10% at the private contract and a further 10% to 30% in instalments during construction. These are market norms set in each developer's contract.

What is the licence of first occupation and why does it matter to me?

The licencia de primera ocupación is issued by the town hall (ayuntamiento) once the finished building matches its building licence and is fit to live in. You normally need it to connect permanent electricity, water and gas.

Does the building have to be registered before I sign the deed?

Yes, the developer normally signs and registers the escritura de obra nueva, which declares the finished building, before the individual sale deeds. The registry also asks for the energy certificate and the building book (libro del edificio). Ask the developer for proof that this is done before you sign.