Frequently asked questions about buying a property off-plan.
Thanks to the opening of borders and the easing of some travel restrictions to Spain, there has been an increase in demand for information on properties under development. These are properties that are being bought off-plan. This increase in interest has been particularly noticeable on the Costa del Sol from Malaga to Estepona.
To facilitate a potential off-plan purchase or purchase of a property belonging to a development under development we have put together a series of answers to questions that are frequently asked by purchasers.
How much do I have to pay as an initial deposit?
Each developer has their own initial deposit rates and this initial deposit will also depend on the price of the property in question.
The most common initial deposits are usually €3,000, €6,000, or even €10,000. With this initial deposit we would secure the new property.
In the event that the initial deposit has been paid and the developer informs us that he is having problems completing the construction within the established timeframe, what would happen?
In Spain there is a law that states that once the building permit has been granted, the deposits paid for the purchase of an off-plan property must be paid into a specially created bank account with bank guarantees. This guarantee is called a guarantee.
If there is a considerable delay in the works and the client does not wish to wait, the money deposited in these accounts will be returned, regardless of the developer’s financial situation.
What taxes would a buyer have to pay when buying an off-plan property?
There are several types of taxes to take into account when buying an off-plan property:
– VAT: 10% of the purchase price
– Stamp duty (Impuesto de Actos Jurídicos Documentados): 1.2% until 31 December 2021, thereafter 1.5%.
– Notary fees: between 500€ and 1.000€.
– Land registry fees: approx. 500€.