What is Off-Plan (Sobre Plano) in Spain?
Buying off-plan (sobre plano) means purchasing a property before it is built — paying stage payments to a developer as construction progresses, with the final payment and title deed at completion. Off-plan developments are extremely common on the Costa del Sol, from individual villas in Mijas to large apartment complexes in Marbella, Estepona, and Fuengirola.
Bank Guarantee: The Most Critical Protection
The most important legal protection for off-plan buyers in Spain is the bank guarantee (aval bancario) or insurance policy covering all stage payments. Under Spanish law (dating back to Ley 57/1968, confirmed by the Supreme Court and extended to all deposits paid by buyers), developers are legally required to protect all pre-delivery payments with a bank guarantee or insurance policy. If the developer fails to complete the property or goes into administration, you are entitled to claim the full return of all stage payments plus 6% annual interest from the guaranteeing bank.
Your lawyer must verify that a valid bank guarantee or insurance certificate is provided for every stage payment you make — not just the initial reservation deposit. Never pay a stage payment without receiving the corresponding guarantee certificate. This is the single most important step in protecting your investment.
What to Check in the Developer's Contract
Developer contracts are drafted to protect the developer's interests. Your lawyer reviews them to ensure:
- Completion date and penalty clauses: Is there a firm completion date? What penalties apply if the developer is late? A good contract includes meaningful financial penalties for delays beyond an agreed longstop date.
- Specifications and materials: Are the property specifications, finishes, and fittings clearly described in the contract and memory of qualities? Vague descriptions allow developers to substitute cheaper materials.
- Plot size and built area: Are the cadastral plot size and built area confirmed? Discrepancies between contracted and actual size are common and can affect the value significantly.
- Community of owners: What are the projected community fees? Who manages the development initially? Are there any planned restrictions on use (short-term lettings, alterations)?
- IVA and AJD: Confirm that VAT (10%) and stamp duty (1.2% in Andalucía) are included in the agreed price or clearly stated as additional charges.
Taxes for New Build Properties
Unlike resale properties where ITP transfer tax (7%) applies, new builds from developers are subject to IVA (VAT) at 10% of the purchase price plus AJD stamp duty at 1.2% in Andalucía. On a €400,000 new build apartment, that is €40,000 in VAT plus €4,800 in AJD — a total tax burden of €44,800, plus notary, Land Registry, and legal fees. Budget approximately 12–14% in total additional costs over the purchase price.
Completing an Off-Plan Purchase
At completion, before signing the title deed, your lawyer must verify: (1) the licencia de primera ocupación (first occupation licence) has been granted — this confirms the property was built in accordance with the planning licence and is legally habitable; (2) all stage payments are accounted for in the deed; (3) the property matches the contracted specifications and any punch-list items are noted; (4) the property is correctly described in the Land Registry. Do not sign the deed without the first occupation licence — it is not just a formality, it affects the property's legal status and insurability.