What is at stake when you buy off-plan
Buying a home off-plan is usually cheaper than buying it finished, and it lets you choose the floor, orientation and finishes. In exchange, for one or two years you will be advancing the developer a large part of the price (the reservation fee, the down payment and monthly instalments) for a home that does not exist yet. If the works are delayed, never start or the developer becomes insolvent, that money is the first thing at risk.
The good news is that Spanish law protects you. The bad news is that this protection only works if the contract and the payments are set up properly from day one. Here is what to check.
Guarantee of advance payments: bank guarantee or insurance
The first additional provision of the Spanish Building Act (Ley de Ordenación de la Edificación, as amended by Law 20/2015) requires any developer that collects money before or during construction to guarantee its repayment, plus statutory interest, through a surety insurance policy or a joint and several bank guarantee. Those payments must also be paid into a special account, kept separate from the developer's other funds and used only for that development.
In practice, the contract must name the insurer or bank guaranteeing your payments, and you should receive an individual certificate of the policy or guarantee in your name. The Spanish Supreme Court has also held that a bank receiving buyers' advance payments must check that they go into that guaranteed account, and may be liable to the buyer if it does not.
New in 2026: the protection is for people buying a home to live in
Supreme Court judgment 722/2026 of 11 May confirmed that this protection is designed for residential purchases: a main home, a family home, or even a second home or holiday home for your own use, but not purely investment deals. Where there are signs of investment (several purchases, unrelated co-buyers, clauses allowing the contract to be assigned before completion), the buyer must prove the home was for their own use.
If you are buying to live there yourself or for your family, the contract and paperwork should consistently reflect that. If you are buying as an investment, be aware that the guarantee may not cover you and negotiate other safeguards.
Checklist before you sign
- Building licence granted and project details.
- Land Registry extract (nota simple) for the plot: the developer's title, mortgages and other charges.
- Name of the insurer or bank guaranteeing your payments, and the number of the special account.
- An individual guarantee certificate in your name for every amount you pay.
- Specifications (memoria de calidades) and plans signed as an annex to the contract. Keep the advertising too: what it promises is enforceable.
- A specific delivery date and a penalty for delays.
- Price including taxes: new homes carry 10% VAT and, in the Madrid region, stamp duty (AJD, 0.75% general rate) instead of transfer tax (ITP).
- Make sure you are not charged costs that belong to the developer, such as the declaration of new build or the horizontal division.
- Always pay by bank transfer into the special account, never in cash or to other accounts.
If the works do not start, are delayed or the home is not delivered
If construction does not start or is not finished by the agreed date, or the first occupation licence is not obtained, you can terminate the contract and claim back what you paid plus interest, first from the developer and, if it does not pay, from the insurer or guaranteeing bank. Do not let time pass: the law sets a two-year expiry period from the breach to call on the guarantee.
After you get the keys
The Building Act sets liability periods from completion of the works: one year for finishing defects, three years for defects affecting habitability and ten years for structural damage. Inspect the home carefully at handover and put any defect in writing.
Before you sign, talk to me
I am the buyer's lawyer, not the developer's or the sales agent's. I review the reservation and purchase contracts, check the guarantees and tell you what to negotiate before you advance a single euro. The first consultation is free.