Guide · Updated November 2026
Is it safe to buy off-plan on the Costa del Sol?
Buying off-plan means buying a home before it is built. How Spanish law protects your payments, and what to check before you pay a developer.
The short answer
When you buy a home before it is built, Spanish law makes the developer secure every payment you make in advance. The developer must use a bank guarantee or an insurance policy. Pay only the reservation until you have that guarantee in your name.
How it works
You reserve a home and sign a private contract. Then you pay in stages while the building goes up. You pay the rest when the home is finished and you sign the deed. Each payment includes 10% VAT.
The guarantee
The rule is in the Building Act, as amended in 2015. A developer who takes money before the home is finished must guarantee to pay it back, with interest, if the home is not delivered on time. This duty starts once the building licence is granted. The guarantee should name you and state the amount. It should come from a bank or an insurer.
Before you sign
Your lawyer should check four things. Does the developer own the land? Has the building licence been granted? Which bank holds the buyers' payments? What does the contract say about delays, changes to the plans and the quality of the finishes?
When the home is finished
The home needs a licence of first occupation. Without it you cannot connect water and electricity or live in the home. The builder must also hold ten-year insurance against structural defects. Inspect the home and list any faults before you sign the deed.
Taxes
On a new build you pay 10% VAT and 1.2% stamp duty in Andalucía. You do not pay transfer tax.
Sources, checked November 10, 2026
- Idealista News: bank guarantees in Spain explained
- Spanish Property Insight: new bank guarantee legislation explained
This is a summary of public reports. It is not legal or tax advice. Rules change, so check anything you rely on with your lawyer.
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