Buying an off-plan property means making a decision about a home that does not yet physically exist or is still under construction. The buyer cannot assess the finished result and must instead analyse the project, its documentation, the contract and the developer’s ability to fulfil what has been agreed.
This type of purchase may offer advantages such as a wider choice within the development, payments spread throughout the construction period or certain customisation options. However, none of these advantages should be taken for granted. They will depend on the project, its stage of development and the conditions confirmed in writing.
Short answer: buying an off-plan property can be a safe transaction if the developer, the legal status of the land, the licence, the contract, the technical specifications, the payment schedule and the guarantees covering advance payments are checked before any money is transferred. A bank guarantee or surety insurance does not replace these checks, but it provides essential protection for the money paid during construction.
Buying a new-build property and buying off-plan are not exactly the same
A new-build property is one purchased directly from the developer on its first transfer. It may be completely finished, under construction or sold before building work begins.
Buying off-plan is a specific form of new-build purchase: the property is acquired before it is completed. Therefore, every property bought off-plan is a new build, but not every new-build property is purchased off-plan.
The distinction matters. In a completed property, the layout, views, natural light, materials and communal areas can be physically inspected. With an off-plan purchase, much of the decision is based on plans, renders, technical specifications and contractual commitments.
When might an off-plan property be the right choice?
There is no universal answer. Buying off-plan may make sense when the expected completion date fits the buyer’s plans, there is enough flexibility to wait and the development concentrates its value on aspects that genuinely matter to the buyer’s future way of life.
It may be particularly interesting for someone seeking an unusual property type, wishing to choose between different orientations or floors, valuing certain customisation options or wanting to plan a second home in Marbella and on the Costa del Sol well in advance.
It may also be the wrong option. A buyer who needs to occupy the property by a fixed date, wants to inspect every finish personally or requires complete certainty about the finished surroundings may find a completed property more suitable.
The right question is not whether buying off-plan is better than buying a finished property. The question is what uncertainties the buyer is willing to accept and what they receive in return.
Before looking at developments, define the decision you need to make
The usual filters—price, floor area, number of bedrooms or a swimming pool—are not enough to assess a development. Before comparing projects, it is advisable to define:
- The property’s main purpose: permanent residence, second home, future relocation or investment.
- The date from which it must be available.
- The elements that are non-negotiable.
- The compromises that can be accepted.
- The capital that will need to remain available during construction.
- The level of tolerance for possible changes to the completion date.
- The level of maintenance and communal services the buyer is prepared to assume.
Two developments with similar budgets may offer completely different ways of living. One may concentrate the investment on privacy and interior space; another on communal services, views or proximity to the beach. The property offering the most features is not necessarily the one that best protects the buyer’s priorities.
What to check before reserving an off-plan property
1. Who the developer is
The identity of the development company, its registration with the Spanish Commercial Registry and the authority of the person signing on its behalf must be verified. It is also advisable to examine its experience, previously completed projects and the parties involved as builder, architect and other relevant professionals.
A recognised brand can provide useful context, but it does not replace a documentary review of the specific development.
2. The legal status of the land
Before paying any amount, the Land Registry should be checked to establish who owns the plot, the developer’s legal relationship with it and whether any mortgages, attachments, easements or other encumbrances exist.
The Land Registry extract, known as the nota simple, shows the registered owner, description and encumbrances. The Spanish Association of Registrars recommends obtaining the registry information before transferring money or signing a contract.
3. The licence and the authorised project
A render shows a visual intention; it does not in itself prove that the construction has been authorised on those terms. It should be verified that a basic project has been submitted to the local council, as this demonstrates that the project is in the development phase. It would also be advisable for the project to already have a building licence, as the property could be delivered within a period of between 24 and 30 months.
It is also important to establish the development’s actual stage. Assessing a project on which work has not yet begun is not the same as assessing an advanced construction, even if both properties are marketed as off-plan purchases.
4. The plans and technical specifications
The plans should clearly identify the property, its orientation, floor areas, layout, terraces, parking space, storage room and share in the communal areas. It is important to distinguish between usable floor area, built area and built area including the proportional share of communal elements.
The technical specifications should be sufficiently detailed. During the initial stages, references to a particular brand or equivalent are acceptable, as it is understood that these brands will be specified once the detailed construction project has been submitted.
Elements that are often absent from renders should also be reviewed: acoustic insulation, air conditioning, ventilation, storage, lighting, accessibility, installations, maintenance and the operation of communal areas.
5. The marketing information
Brochures, plans, emails, renders and marketing documents should be retained. Spanish Royal Decree 515/1989 establishes that the information, characteristics and conditions included in the offer, promotion and advertising of residential properties may be enforceable even if they do not expressly appear in the contract.
Even so, the strongest protection is to incorporate into the contract and its appendices any feature that was decisive in the purchase decision.
What the contract should contain
The private sale and purchase contract should be reviewed before signing, preferably by an independent lawyer representing only the buyer. At a minimum, it should clearly identify:
- The property, its ancillary spaces and its location within the development.
- The plans and technical specifications incorporated into the contract.
- The price, taxes and any additional costs.
- The payment schedule and payment methods.
- The completion date or delivery period.
- The consequences of delay or breach.
- The conditions under which the project, layout or materials may be changed.
- The treatment of customisation options.
- The conditions for terminating the contract.
- The guarantee covering advance payments and the account into which they must be paid.
Any possible extensions should not be worded indefinitely. The buyer needs to understand which situations may change the timeframe, how they will be notified and what rights they will have if the property is not delivered as agreed.
Changes requested by the buyer must also be documented. Their description, price and effect on the completion date should be confirmed in writing.
Bank guarantees for off-plan property purchases: what they protect
The term “bank guarantee” is commonly used, although the legal protection may also be arranged through surety insurance. In both cases, its purpose is to guarantee the return of the amounts paid in advance if construction does not begin or is not completed within the agreed period.
The Spanish Building Act establishes that, once the building licence has been obtained, the developer must guarantee the amounts paid through a joint and several bank guarantee issued by a credit institution or through surety insurance taken out with an authorised insurer.
The guarantee must cover:
- The amounts paid in advance by the buyer.
- The taxes applicable to those amounts.
- Legal interest on the money from the date of the advance payment until the scheduled completion date.
Advance payments must also be deposited in a special account, separate from the developer’s other funds and used for expenses arising from the construction.
When the contract is signed, the developer must provide the document certifying the individual guarantee. A general reference stating that the development has a guarantee facility is not sufficient.
What to check in the bank guarantee or surety insurance
- The identity of the buyer or buyers.
- The property and development to which it relates.
- The bank or insurance company providing the guarantee.
- The guaranteed amount.
- The inclusion of taxes and legal interest.
- Its connection with the sale and purchase contract.
- The expected completion date and the validity period of the guarantee.
- The procedure to be followed in the event of breach.
Every payment should be documented and its coverage verified. The guarantee should not be treated as a document that only needs to be checked once if further amounts are subsequently paid.
The Bank of Spain confirms that the guarantee must remain in force for the full amount of the advance payments, including taxes and the corresponding legal interest.
What happens if the property is not delivered?
If construction does not begin or the property is not delivered within the agreed period, the buyer may, depending on the circumstances and the contract, terminate the sale and request the return of the amounts paid, taxes and interest, or grant the developer an extension through an additional clause setting a new date.
To make a claim against the guarantor, the buyer must normally first submit a formal, verifiable demand to the developer. If the developer does not return the amounts within the statutory period of thirty days, a claim may be made against the guaranteeing institution. When it is not possible to make that prior claim against the developer, the law allows the buyer to approach the guarantor directly.
Not every delay should automatically be handled in the same way. The contract, the cause of the delay, the communications and compliance with the formal requirements should be examined by a professional.
There is no universal payment schedule
It is common to find examples in which one percentage is paid on reservation, another during construction and the balance on signing the title deed. However, there is no single payment schedule that applies to every development.
The structure may vary according to the project, its stage, its price and its commercial conditions. What matters is that the buyer understands from the outset:
- How much must be paid at each stage.
- What condition triggers each payment.
- The account into which the funds must be paid.
- The guarantee protecting each amount.
- What happens if the project or the buyer cannot proceed.
The reservation payment requires particular attention. Before paying it, the buyer should check whether it is refundable or non-refundable, the deadline for signing the private contract and the circumstances under which the money can be recovered.
Taxes and the real budget for a new-build property
The budget should not be calculated solely on the advertised price. The first transfer of a new residential property by the developer is generally subject to VAT at 10%, according to the Spanish Tax Agency.
Stamp Duty, known in Spain as AJD, also applies in Andalusia. The general rate in force when this article was written is 1.2%, although specific circumstances may receive different treatment and the regulations should be checked before each transaction.
Notary, Land Registry, legal advice, technical inspection and financing costs may be added to these taxes. Customisation options may also change the final budget and their tax treatment.
The Inmolux property tax calculator provides an initial estimate. The final calculation must always be adapted to the transaction and the buyer’s circumstances.
Financing: future completion must also be planned today
A staggered payment schedule may make it easier to organise capital, but it does not guarantee that the buyer will obtain financing when construction is completed. Mortgage approval will depend on the buyer’s financial situation at that time, the property valuation and the lender’s criteria.
For an international buyer, the country of residence, the currency in which income is received and exchange-rate fluctuations during construction may also affect the transaction.
Before committing, it is therefore advisable to prepare different scenarios: a cash purchase, partial financing, changes in the valuation or the need to contribute more capital than expected. Taking over the developer’s financing may be considered, but it should not be accepted without comparing it with other alternatives.
What to monitor during construction
The review does not end when the contract is signed. During construction, a complete file should be kept containing the contract, appendices, plans, technical specifications, proof of payment, guarantees and communications.
It is also advisable to:
- Request verifiable updates on construction progress.
- Check that each payment matches the contractual schedule.
- Document any change to materials, layout, price or timeframe.
- Obtain written confirmation of the selected customisation options.
- Monitor the progress of the entire development, not only the individual property.
- Prepare the financing and documentation required for signing the title deed well in advance.
Frequent communication is useful, but it must be supported by documentation. Verbal explanations do not replace written agreements.
Before signing the title deed and receiving the keys
The completed property should be compared with what was agreed in the contract. Before completion, it is advisable to carry out a technical inspection, review any possible defects and formally record the issues identified.
The inspection should include the property, its ancillary spaces and any communal elements that can be inspected. Depending on the transaction, the following should also be checked:
- The final works certificate.
- The first occupancy licence or equivalent document.
- The Land Registry status and any encumbrances.
- The energy performance certificate.
- The ten-year structural insurance policy where required.
- The building book and installation manuals.
- The conditions for connecting utilities.
- The owners’ association rules, services and budget.
The first occupancy licence or equivalent document and the delivery of the property are relevant to the cancellation of the guarantees covering advance payments. A bank guarantee protects the money paid during construction; it should not be confused with liability for defects that appear after completion.
Liability for defects after completion
The Spanish Building Act establishes different liability periods, calculated from formal acceptance of the construction work:
- One year for material damage caused by workmanship defects affecting finishing elements.
- Three years for damage caused by defects in building elements or installations that affect habitability.
- Ten years for damage arising from structural defects that compromise the building’s mechanical strength and stability.
These periods do not mean that every issue is automatically covered. The nature and cause of the defect, the date it appeared and the responsible party must be assessed in each case. Any issue should be reported and documented as soon as possible.
What to examine particularly carefully in a development in Marbella and on the Costa del Sol
In Marbella, the value of a development does not depend only on the property itself. The future surroundings, orientation, access, remaining phases and the model used to manage communal services can significantly change the day-to-day experience and cost of ownership.
Before deciding, it is advisable to analyse:
- What may be built nearby and how it could affect the views or privacy.
- The actual orientation of the property and its outdoor spaces.
- Access and the level of dependence on a car for everyday life.
- Which communal areas will be delivered during each phase.
- Who will manage the services and their estimated cost.
- The maintenance of gardens, swimming pools, security, wellness areas and other facilities.
- How the property will operate during extended periods of absence.
- The relationship between the completion date and the intended use.
A swimming pool, gym or security service can add value if the buyer will use it and accepts its maintenance cost. If these services do not suit the buyer’s lifestyle, they may become facilities the buyer pays for without enjoying.
Warning signs that justify stopping before signing
- Pressure to reserve without sufficient time to review the documentation.
- Requests to make payments into an account other than the one stated in the contract.
- No individual guarantee covering the advance payments.
- A lack of clarity about the licence or the legal status of the plot.
- An imprecise completion date or indefinite extensions.
- Technical specifications based on generic wording.
- Excessively broad powers allowing the developer to change the project unilaterally.
- Promised services, views or features that are not documented.
- Estimated owners’ association fees or maintenance costs that are not provided or explained.
- Promises of guaranteed returns or appreciation.
- Resistance to the buyer consulting an independent lawyer.
Stopping does not necessarily mean rejecting the development. It means requesting the information required before assuming a commitment that may be difficult to reverse.
A more useful way to compare developments
| Area | What to check | Main question |
|---|---|---|
| Personal suitability | Purpose, lifestyle, timing and priorities | Does this property protect what I really need? |
| Project | Licence, plans, specifications and phases | What exactly will be built? |
| Developer | Identity, experience and capability | Who assumes responsibility? |
| Contract | Price, timeframe, changes and termination | What has actually been committed to in writing? |
| Payments | Schedule, account and receipts | When is the money paid and under what conditions? |
| Guarantees | Individual bank guarantee or surety insurance | Is the full advance payment protected? |
| Completion | Documentation, inspection and defects | Does the result match what was agreed? |
| Total cost | Taxes, financing and maintenance | What will the full financial commitment be? |
Buying off-plan with sound judgement
A good off-plan purchase is not necessarily the one promising the most services, allowing the widest choice of finishes or presented with the most attractive renders. It is one in which the project fits the buyer’s life, the commitments are clearly defined and the uncertainties have been identified before any money is transferred.
What is truly premium is not limited to what can be seen. It also lies in the documentation reviewed, the unsuitable options ruled out, the payments protected, the coordination between professionals and the preparation for completion.
At Inmolux, we do not begin by sending every available development. We first understand the intended use, priorities and acceptable compromises; we then select the options based on a clear hypothesis of suitability. You can explore our selection of new-build properties on the Costa del Sol or tell us what decision you need to make.
This article provides general information and does not replace legal, tax, financial or technical advice tailored to a specific transaction.
Official sources consulted
- Spanish Law 38/1999 on Building Regulations.
- Spanish Royal Decree 515/1989 on information in residential property sales.
- Bank of Spain: guarantees for the repayment of advance payments.
- Spanish Association of Registrars: guide to buying a property.
- Spanish Tax Agency: taxation of new-build property purchases.
