Buying a New Build Property in Spain: What Foreign Buyers Need to Know

Buying off-plan in Spain carries more risk than purchasing a completed property, but it is legal and protected by law when done correctly. Since 2015, Spanish law requires developers to place all buyer stage payments in a protected bank account or insurance policy, separate from the developer's own funds. This means that if the developer fails to complete the property, buyers are entitled to a full refund of all stage payments plus interest. The key safeguards are: always pay stage payments only to the protected account specified in the contract, always obtain bank guarantee documentation for each payment, and always have an independent lawyer review all contracts before signing. With these protections in place, off-plan buying can be a secure way to acquire a new build property.

Deposits for new build properties in Spain vary by developer but typically follow a structure of: an initial reservation fee of between 3,000 and 10,000 euros paid to reserve the unit, followed by a larger stage payment of 10 to 20 percent of the purchase price on signing the private purchase contract, then further stage payments during construction as milestones are reached, and the remaining balance paid at completion when the keys are handed over. Total deposits paid during the construction period commonly amount to 20 to 30 percent of the purchase price before completion. All stage payments must be protected by the developer's bank guarantee or insurance policy under Spanish law.

Yes, Spanish banks offer mortgages for new build properties, but the process works differently to resale mortgages. For off-plan purchases, most banks will provide a mortgage in principle but will only formally approve and release funds when the property is completed and a certificate of completion (certificado de fin de obra) has been issued. Some developers offer buyer finance arrangements with partnering banks, which can simplify the mortgage process. Non-resident foreign buyers can typically obtain mortgages for up to 60 to 70 percent of the property value for new builds. You should confirm mortgage availability and terms before committing to stage payments, as the mortgage funds will only be disbursed at completion.

If a developer goes bankrupt before completing a new build property, Spanish law provides important protections for buyers. Under Law 57/1968 (now reinforced by Law 20/2015), all stage payments made by buyers must be covered by a bank guarantee or insurance policy held separately from the developer's assets. If the developer enters insolvency proceedings, buyers can claim a full refund of all stage payments made, plus interest at the legal rate from the date of each payment. To exercise this right, buyers must hold the original guarantee documentation for each payment made. This is why your lawyer should obtain and securely store all guarantee certificates throughout the buying process.

New build properties in Spain typically take between 18 months and 3 years to complete from the date of signing the private purchase contract, depending on the scale of the development and stage of construction at the time of purchase. Off-plan properties purchased before ground has been broken may have the longest timelines, while properties purchased at a later construction stage can complete in 12 to 18 months. Developer contracts specify a completion date, and Spanish law requires developers to notify buyers of any delays within a reasonable timeframe. If the developer fails to meet the agreed completion date without a valid reason, buyers may have grounds to exit the contract and recover all payments made.