What is Off-Plan (Sobre Plano) in Spain?
Buying off-plan 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.
Bank Guarantee: The Most Critical Protection
The most important legal protection for off-plan buyers in Spain is the bank guarantee (aval bancario). Developers are legally required to protect all pre-delivery payments with a bank guarantee or insurance policy. If the developer fails to complete or goes into administration, you are entitled to claim back all stage payments plus 6% annual interest.
Your lawyer must verify that a valid guarantee is provided for every stage payment you make. Never pay a stage payment without receiving the corresponding guarantee certificate.
What to Check in the Developer's Contract
Developer contracts protect the developer. 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?
- Specifications and materials: Are finishes and fittings clearly described? Vague descriptions allow cheaper substitutions.
- Plot size and built area: Discrepancies between contracted and actual size are common.
- Community fees: What are the projected community fees? Any restrictions on use?
- IVA and AJD: Confirm VAT (10%) and stamp duty (1.2% in Andalucía) are clearly stated.
Taxes for New Build Properties
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 apartment: €40,000 VAT + €4,800 AJD. Budget approximately 12–14% in total additional costs.
Completing an Off-Plan Purchase
Before signing the title deed, your lawyer verifies: (1) the licencia de primera ocupación has been granted; (2) all stage payments are accounted for; (3) the property matches contracted specifications; (4) the property is correctly described in the Land Registry. Do not sign without the first occupation licence.