New houses for sale in Spain are often available off plan. You can buy before construction begins or during the build process. What’s important when buying property in Spain in this way is not just how much you pay but when you pay it.
With an off-plan property, payments are normally spread throughout the construction period, meaning you don’t have to pay for the whole property upfront. So, whether, you’ve got your eye on a spacious Alicante apartment or a chic townhouse in Malaga, you can spread your buying budget out over the build period.
Below, we’ve rounded up what you can expect to pay and when, based on apartments for sale in Spain with Taylor Wimpey España. Note that the exact payment schedule, applicable taxes and guarantees will vary with different developers, so ensure these are always clearly explained before your sign the purchase contract.
Reservation deposit
The reservation deposit is usually the first payment you make once you’ve chosen your property. You typically pay a reservation fee to take the home off the market, as the first step in the buying process.
The amount you pay for the reservation deposit varies depending on the development and the cost of the properties there. With Taylor Wimpey España, the reservation deposit is usually €6,000 or €12,000, depending on the price of the property you’re buying. This amount is deducted from the purchase price.
Private purchase contract
The next step, following the reservation, is to sign a private purchase contract (Contrato Privado de Compraventa). At this point, you usually pay an initial deposit which is commonly a percentage of the purchase price. The exact amount and timing depend on the particular developer and property. When buying properties for sale in Spain with Taylor Wimpey España, this amount is 30% of the property price plus VAT.
Staged payments during construction
When buying property in Spain off plan, you’ll usually pay in agreed instalments as construction progresses. These payments tend to be linked to construction milestones.
The schedule for these staged payments should be clearly set out in your purchase contract, so you know what will be due at each stage of the construction process.
With Taylor Wimpey España, after you pay your reservation fee and initial deposit (30%), the final balance of the property price (plus VAT) is due upon completion of construction. You pay this when signing the public deed of sale (Escritura de Compraventa) in front of a Spanish notary.
Bank guarantee or insurance policies for amounts paid
There are other fees you should be aware of when buying a home off plan. In Spain, amounts paid in advance for a property that’s under construction are subject to legal protection, provided applicable requirements are met. Buyers should ensure that advance payments are made into the designated account and are covered by the relevant guarantee or insurance.
With Taylor Wimpey España, all amounts paid are Bank or Insurance policy guaranteed.
VAT (IVA)
For a new-build Spanish property purchased from a developer, 10% VAT is generally payable on the purchase price (for a residential property). This is paid alongside the relevant instalments rather than as a single additional payment at the end.
Stamp Duty (AJD)
New-build purchases in Spain are generally subject to Stamp Duty (AJD). The applicable rate varies by autonomous region, so you’ll need to check the rate that applies in the area where your chosen property is located.
Notary and Land Registry costs
There are various official costs to pay when you buy property in Spain. You’ll need to budget for costs associated with the notarial deed and registration of the property in the Land Registry, which are separate from the purchase price.
Legal representation
Although not mandatory, independent legal advice is strongly recommended. A lawyer can review the purchase contract, payment schedule, guarantees and documentation before you commit. They will ensure everything is in order so that your property purchase can proceed smoothly.
Mortgage costs
If you’re financing your purchase with a mortgage, you’ll need to budget for the costs associated with this.
Buying property in Spain – total costs
As a general rule, budget around 12-15% on top of the purchase price of your chosen property. This should be enough to cover taxes and other acquisition-related costs, although the exact amount will depend on the property, its location and how you’re funding the purchase.
For more information, please contact Taylor Wimpey España on 08000 121 020 or visit https://www.taylorwimpeyspain.com/.
If you reside outside of the UK, you will need to call 00 34 971 706 972.
