Buying Off-Plan Property in Spain: Legal Risks, Costs and How to Protect Yourself

Key takeaway: Buying off-plan in Spain offers attractive prices but carries real legal risks — especially around developer solvency, licence compliance and stage payment protection.

What Is Off-Plan Property in Spain?

Buying off-plan (sobre plano) means purchasing a property that has not yet been built or is under construction. You pay in stages — typically a reservation fee, then stage payments during construction, then the balance at completion. The attraction is that you can secure a property at today's price for delivery in 12–24 months, often at a discount to the eventual market value.

The Costa del Sol has seen a major surge in new-build developments in recent years, particularly in Estepona, Marbella, Benahavís, Fuengirola and Torremolinos.

The Legal Risks of Buying Off-Plan

1. Developer Insolvency

If the developer becomes insolvent before completion, you risk losing your stage payments. Spanish law requires developers to hold stage payments in a separate guarantee account (cuenta especial) or provide a bank guarantee. Your lawyer must verify that these protections are in place before you pay anything.

2. Licence and Planning Approval

Construction cannot begin without a licencia de obras mayor (major works licence). A property cannot be occupied without a licencia de primera ocupación (first occupation licence). Your lawyer must check that all licences are in order and that the building is being constructed in accordance with the approved plans.

3. Delivery Delays

Delays are common in off-plan construction. Your purchase contract should contain a clear agreed delivery date, provisions for what happens if that date is missed (including whether you can withdraw and claim your money back with interest), and force majeure clauses.

4. Final Price Inflation

Some off-plan contracts include a price escalation clause tied to the CPI index. Make sure you understand how the final price may change between signing and completion.

5. Quality and Specification

The developer's marketing brochure is not a contract. Your contract must contain detailed specifications (memory of qualities) binding the developer to specific finishes, materials, and equipment. Without this, you have little recourse if the finished property does not match the model apartment.

What Your Lawyer Must Do for Off-Plan

Verify the developer's company (mercantile registry check) and financial standing
Confirm the licencia de obras is in place before any payment
Check that stage payments are protected by a bank guarantee or separate account
Review the private purchase contract for delivery dates, penalty clauses and specifications
Verify the property will have a habitation licence (cédula de habitabilidad) at completion
Carry out a pre-completion snagging inspection and prepare a list of defects
Manage all completion taxes (VAT 10% + AJD 1.2%) and Land Registry registration

Off-Plan vs Resale: Which Is Better?

Neither is inherently better — it depends on your situation. Off-plan suits buyers who are not in a hurry, want a brand-new property to their specification, and are comfortable with construction risk. Resale suits buyers who want to complete quickly and see exactly what they are getting before committing. Both carry legal risks that a specialist lawyer can identify and manage.