1. The Buying Process for Off-Plan & New Developments
Step 1: Research & Choose the Right Property
Spain offers a wide range of new developments, from beachfront luxury apartments to golf-front villas. Research the developer’s reputation, the location, and expected completion dates before making a decision.
Step 2: Reserve the Property
Once you’ve chosen a property, you’ll need to pay a reservation fee, typically between €3,000 and €10,000, to secure it. This amount is deducted from the final purchase price.
Step 3: Sign the Private Purchase Contract (PPC)
Within a few weeks of reservation, you’ll sign a Private Purchase Contract (PPC) with the developer. At this stage, you will need to pay 10% to 30% of the property price, depending on the payment structure.
Step 4: Staggered Payments During Construction
For off-plan properties, payments are typically made in installments during the construction phase. Each developer has a different payment plan, which is detailed in the contract.
Step 5: Final Payment & Property Completion
Once construction is completed, the final payment is made, usually through a mortgage or bank transfer. A Notary appointment is arranged for the signing of the Title Deed (Escritura Pública de Compraventa), officially transferring ownership.
2. Costs & Taxes When Buying a New Development in Spain
Buying a new property involves several additional costs beyond the purchase price. Here’s what to expect:
Taxes:
✅ VAT (IVA): 10% of the purchase price (applies to new properties only, not resales). ✅ Stamp Duty (AJD – Actos Jurídicos Documentados): Between 1.2% and 1.5%, depending on the region.
Legal & Administrative Costs:
✅ Notary Fees: €800 – €1,500 (varies based on property price). ✅ Land Registry Fees: €500 – €1,000. ✅ Legal Fees: 1% – 1.5% of the purchase price (recommended to hire an independent lawyer). ✅ Mortgage Costs (if applicable): Includes bank fees, valuation costs (€500 – €1,000), and mortgage registration tax.
Total Additional Costs: Expect to pay around 12% – 14% of the property price in taxes and fees.
3. Things to Beware of When Buying Off-Plan
✅ Choose a Reputable Developer – Research the builder’s track record and completed projects. ✅ Guarantees & Bank Guarantees – Developers must provide a bank guarantee or insurance policy for your deposits, protecting your money if the project is delayed or canceled. ✅ Contract Terms – Ensure the completion date, payment schedule, and refund policies are clearly defined. ✅ Mortgage Pre-Approval – If financing, confirm eligibility before signing the contract. ✅ Snagging Process – Before final handover, inspect the property for defects and request fixes before accepting delivery.
4. Why Invest in an Off-Plan Property in Spain?
✅ Early-Bird Pricing & Capital Growth – Off-plan properties are often cheaper than completed units and appreciate in value. ✅ Customization Options – Many developments allow buyers to choose materials, layouts, and finishes. ✅ Energy Efficiency & Modern Design – New homes meet higher energy efficiency standards and include the latest smart-home technology. ✅ Higher Rental Yield Potential – New builds attract premium tenants and offer high ROI for investors.
Conclusion
Buying an off-plan or new development property in Spain is a fantastic opportunity, but it’s essential to understand the process, costs, and risks. Working with an experienced real estate agent and lawyer ensures a smooth purchase and protects your investment.
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