Buying off-plan — purchasing a property before or during construction — can be attractive on the Costa Blanca: lower prices, customisable finishes, and modern energy efficiency. However, it carries specific risks requiring careful legal protection.
What Does Buying Off-Plan Mean?
You buy based on plans and specifications. Payments are made in stages as construction progresses. Delays are common.
Legal Protections for Off-Plan Buyers
Spanish law (Ley 57/1968 and Ley 20/2015) requires developers to guarantee all advance payments through bank guarantees or insurance. If the developer fails to deliver, your money must be returned with interest. Your lawyer must verify guarantees exist before any payment. This is non-negotiable.
The Payment Schedule
Typically: reservation deposit, then milestone payments (foundations, structure, roof), with the final balance at delivery. Total paid before delivery is commonly 20-30%.
What Your Lawyer Should Check
Developer track record, building licence granted, advance payment guarantees in place, detailed specifications in the contract, delivery date with penalties for delay, and 10-year structural guarantee insurance.
Risks of Buying Off-Plan
Construction delays are extremely common. The finished product may differ from plans. Developer financial difficulties can slow money recovery. Market conditions may change.
Snagging and Delivery
Carry out a thorough snagging inspection before accepting keys. Spanish law provides a 10-year structural guarantee, 3-year habitability guarantee, and 1-year finishing guarantee.
Tax Considerations
New builds attract VAT (IVA) plus Stamp Duty (AJD), slightly higher than the 10% Transfer Tax on resale properties. Rates may change — verify with your lawyer.
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Disclaimer: This article is provided for general informational purposes only and does not constitute legal, tax, or financial advice. Tax laws and regulations are subject to change and may vary depending on individual circumstances. No solicitor-client relationship is created by reading this article. For advice specific to your situation, please contact a qualified legal professional. Tomas Ballestero Lawyers accepts no liability for actions taken based on the information contained herein.
Considering an off-plan property on the Costa Blanca? Our experienced property lawyers in Costa Blanca & Valencia offer a free initial consultation. Call +34 965 792 946.