Special Considerations When Buying Off-Plan

If you are considering buying off-plan, in other words you want to purchase a villa or apartment that has not yet been built, you should be especially careful. In this kind of transaction you are required to make a series of payments, before construction begins and whilst it is in progress. Obviously, buyers need a guarantee that some or all of their money will be returned if the project stalls, fails to complete on time or, in the worst case scenario, simply never gets off the ground. Most reputable developers will offer you a scheme whereby a bank guarantees that your money will be returned if anything goes wrong. Some of these schemes are offered free of charge; in other cases you will have to pay a small percentage.

When you complete the purchase of a new property you will be liable to pay VAT (IVA) at a rate of 7% and stamp duty at a rate of 1% on the purchase price.

It is standard practice in Spain for new-build properties to be handed over without utilities like water and electricity. You should include payment of a small fee for the connection of these services in your budget. You should also be aware that it can take some time, up to four weeks in many cases, for this to be carried out, so it is not advisable to make plans to use your new property during this time.

If you are buying a property from a promoter or developer it is extremely important to have professional legal representation.