Buying Off-Plan in Spain: How It Works and How Your Money Is Protected

Buying off-plan means paying for a home that does not exist yet. You commit at today's price, pay in stages while it is built, and receive the keys at the end. Done properly, it can be the best-value way into Sotogrande and the wider Costa del Sol: new-build specification, modern energy standards, and often a lower price than the finished equivalent will command.

Done carelessly, it is the purchase most likely to go wrong, because for months or years your money is in a project rather than a property. The good news is that Spanish law gives off-plan buyers strong protection. The bad news is that the protection only works if the paperwork is actually in place, and checking that is your lawyer's job, not the developer's.

This guide walks through the process from reservation to the end of the ten-year structural warranty.

Step 1: Before you reserve

Before any money changes hands, there are three things to establish.

You need an NIE. The Número de Identificación de Extranjero is the tax identification number every foreign buyer needs to sign contracts, pay taxes and register the purchase. It can take weeks to obtain, so start early. A lawyer can apply on your behalf with a power of attorney.

You need your own lawyer. Not the developer's, not the agent's, yours: an independent Spanish lawyer who acts only for you and is paid by you. Every check described below is a check your lawyer should carry out. If anyone suggests you do not need one for a new build, that is the moment to slow down.

The project needs a building licence. A developer can market and even take reservations before the licence (licencia de obra) is granted, but you should not move beyond a small, refundable reservation until it has been. Your lawyer can confirm it with the town hall.

Step 2: Reservation

The first payment is usually a reservation fee, commonly a few thousand euros up to around €10,000–€20,000 for higher-value homes, which takes the unit off the market for a short period while contracts are prepared.

Read the reservation document before you pay. The key question is whether the fee is refundable, and on what terms, if the private purchase contract is not signed. A reservation fee is normally deducted from the price, but the conditions vary by developer.

Step 3: The private purchase contract

Within a few weeks the reservation is replaced by a private purchase contract (contrato privado de compraventa). This is the document that matters most, and it should state at a minimum:

• the exact unit, its plans, surface areas, specification and any parking or storage included;
• the total price and whether VAT is included;
• the payment schedule;
• the expected completion date and what happens if it is missed;
• the bank guarantee or insurance covering your stage payments (see below).

On signing, buyers typically pay a further instalment, bringing the total to somewhere between 20% and 40% of the price, sometimes split across construction milestones. The balance is paid on completion.

How your stage payments are protected

This is the part every off-plan buyer needs to understand.

Under Spanish law, money a buyer pays a developer before completion on a residential new build must be guaranteed, either by a bank guarantee (aval bancario) or an insurance policy (seguro de caución), and paid into a special account that is used only for that development. If the project is not started, not finished, or not delivered in time, the guarantee lets you recover what you paid, plus interest.

In practice, the protection is only as good as the document. Before each payment, your lawyer should confirm that:

• an individual guarantee or insurance certificate has been issued in your name, covering the amount you are about to pay;
• it comes from a properly authorised Spanish bank or insurer;
• the payment is going into the development's designated account, not a general company account.

Never pay a stage instalment on a promise that the guarantee "is being arranged". Ask for the certificate first.

The costs of buying new

New builds are taxed differently from resales. Instead of the regional transfer tax, you pay:

• VAT (IVA) at 10% of the purchase price for residential property (garages and storage bought separately can be charged at 21%);
• stamp duty (AJD), which in Andalucía is currently 1.2% of the price;
• notary, land registry and legal fees, typically adding roughly 1.5–2% more.

VAT is usually paid in proportion to each stage payment, so the cash you need at each milestone is higher than the headline percentages suggest. Our guide to the real cost of buying in Spain as a non-resident covers the full picture, including the annual taxes that follow.

Step 4: Completion

When construction finishes, the developer obtains the end-of-works certificate and, in Andalucía, completes the occupancy formalities that allow the home to be lived in and connected to utilities. Your lawyer should confirm these are in place before you complete.

Completion happens at a notary, where the title deed (escritura) is signed, the balance is paid, and you receive the keys. The deed is then registered at the Land Registry in your name.

Step 5: Snagging

Before completion, inspect the property in detail, ideally with an independent surveyor or snagging specialist. List every defect, from cracked tiles and poorly hung doors to drainage, damp and electrical faults, and get the list acknowledged in writing by the developer.

It is common to complete with a short snagging list outstanding, agreed for repair within a set period. A long or serious list is a reason to negotiate before signing.

Your warranties after handover

Spanish building law gives new homes three layers of protection from the date of handover:

• 1 year for finishing defects;
• 3 years for defects affecting habitability, such as damp, insulation or installations;
• 10 years for structural defects, backed by compulsory ten-year insurance (seguro decenal) on the building.

Keep your snagging records and correspondence. They make warranty claims far easier.

What goes wrong, and how to avoid it

Most off-plan problems trace back to a handful of avoidable mistakes:

• Paying without a guarantee in your name. The single most important check.
• Using the developer's recommended lawyer. Their interests are not yours.
• Ignoring the completion clause. Know what happens, and what you can do, if delivery is late.
• Assuming the show home is the specification. Only the contract and its annexes count.
• Budgeting for the price, not the cost. VAT, stamp duty and fees come on top.

Is off-plan right for you?

Off-plan suits buyers with time on their side, who want a new-build home and are comfortable with their money being committed for one to three years. It suits less well if you need certainty of a move-in date, or if your finances depend on reselling another property at a particular moment.

Makarios Estates works on the buyer's side. If you are weighing an off-plan home in Sotogrande or along the coast, talk to us before you reserve, and we can help you work out which questions to put to the developer and to your lawyer.

This guide is general information, current at October 2026 and focused on Andalucía. It is not legal, tax or financial advice. Laws, tax rates and procedures change, and individual circumstances alter the answer: always take independent advice from a Spanish lawyer and a qualified tax adviser before you reserve, sign or pay.