Our New Build Property Guide

Cash purchase cost breakdown example

€250,000 = Purchase Price

€25,000 = 10% IVA (VAT) Tax

€3,750 = 1.5% AJD (Stamp Duty) Tax

€2,500 = Standard Legal Fee

€900 = Notary Fee

€600 = Land Registry Fee

€500 = Sundry (Home Insurance & Bank Fees)

€283,250 = Total Cost

+ (if required)

Finance Costs

Furniture Pack

Key ready/turnkey properties are new properties that are fully built however they have not been lived in. If you are looking to buy this type of property you can usually complete your purchase within a 4-to-8-week timeframe.

Off plan new build purchases are typically transacted over 6 Month to 2 Year timeframe depending on where the developer is in the build stage and the type and size of the property. Each developer has its own stage payment structure and will be determined by where they are in the build timeline.

€278,500 = Purchase Price (including IVA and AJD purchase taxes)

€6,000 = Deposit (Reservation Stage)

€68,750 = 25% of the purchase price + 10% IVA (1st stage payment 4 weeks after reservation)

€68,750 = 25% of the purchase price + 10% IVA (2nd stage payment 3-6 months after reservation)

€135,000 = 50% of the purchase price + 10% IVA and 1.5% AJD after deducting the initial deposit payment (Completion 1 year after reservation)

Developers are keen to sell properties before they are built and equally purchasers are keen to buy at pre-construction to obtain a lower price. It benefits both parties however as the buyer is paying in advance there is a risk that the property may not be built due to unscrupulous builders, or developers going bust.

New laws were introduced in 2015 to protect purchasers who are buying property off-plan in Spain. Developers are required to provide a bank guarantee for all payments made by the purchaser for the property.  Effectively, the bank guarantees a full refund to the purchaser if the build is not completed. The original 2015 law was updated in January 2016 and the government applied the existing law with some amendments.  

Therefore, can you buy a property off-plan in Spain, safely?  

Let’s look at the rules so that you can be sure that your off-plan purchase in Spain goes smoothly and that you are protected if it does not. 

New rules on bank guarantees when buying off-plan property in Spain.

To give extra protection to purchasers, new rules were introduced amending the law in relation to bank guarantees: Law 20/2015 (of 14 July 2015) replaced the Law 57/1968 and stated that with effect from 1st January 2016 bank guarantees can only be provided for payments once the developer has proved that he has obtained all the necessary planning permissions. Therefore the purchaser now has extra protection ensuring that all relevant planning permissions have been obtained as well as protecting any financial investment. The banks and insurance companies had to revise all existing guarantees to reflect this amendment. This means that any payment made by a purchaser to a developer prior to planning permission being granted will not be guaranteed. Under the new rules if the buyer does not make a claim against the developer within 2 years after the breach of contract, then the bank guarantee will expire.

All new homes in Spain fall under a 10-year warranty. The construction warranty is a compulsory legally requirement mandated by Article 1591 of the Spanish Civil Code and statute 38/1999 of Spain’s Building Act (Ley de Ordenación de la Edificación).

Snagging is the final step in the construction process to ensure that your new property meets all the required quality standards and specifications. In general terms, snagging refers to the process of a new owner, either the client or final customer, checking a new building for minor faults that need to be rectified.

When your property is complete a final check will be carried out by your sales agent to confirm everything is finished to the required standard, where there are any faults, they will compile a list any outstanding issues that need to be rectified by the developer before completion.

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