There are many legal peculiarities involved with buying a property in Spain and this is also the case when buying off plan property.
Below we have made a short introduction to some of the most important legal matters when buying off plan property. This information is only a guide and is not complete - for further advice please contact Accom Services.

Initially
One of the first things you will need to arrange if you want to buy a property in Spain is to get a fiscal number (NIE). This is used for nearly official documents and will also be needed when you will have to register a new property in Spain. The NIE number is applied for at the police station where you will have to explain your intention of buying a property to get the number.

If you have found a property you are interested in there are a number of issues it can be recommended to investigate before you sign any contract.
First of all you will need further information about the developer. This will both include general information about what the developer has constructed before and the owner ship of the company and if all the legal matters regarding to the promotion you are interested are in order including the deed of the declaration of new construction, property deeds, construction licenses and a bank guarantee.

In Accom we provide all our clients with a full background report about the developer and constructer including what they have done before, owner ship information and a status of all the licenses of the promotion.

Pre Contract
When buying off plan property you will normally have to sign to private contracts before signing the public title deed at the end of the construction.

The first contract is the reservation contract where you pay down a small amount normally between 3000-6000Eur to take the property of the market and give the buyer time enough to get the outstanding amount, which is needed upon signing the main private contract.

The date of the signing of the main private contract is settle in the reservation contract and is normally one month after. If the buyer does show up or change idea about the property the money paid upon reservation will be lost. The amount to be paid upon the signing of this contract is normally between 10-20% of the total property price and this contract will also set the amount which has to be paid during the construction period (the difference between the money paid at the reservation and private contract and the money available in mortgage, which is normally about 70%).

Public Contract
The public contract is the contract signed before a notary once the property has been finished and the license for first occupancy has been given by the local town hall.
This is called the signing of the Escritura and is whereby the notary officially confirms that the contract is legal and that the money has been paid. Normally the notary will give you a signed copy (copia simple) at this stage.

When buying off plan properties there nearly always exist an important gap of time between signing the private and the public contract due to the time involved with finishing the construction of the property. As the private contract is binding it is a good way to secure the agreement in this time span.

If you are buying a property to resell it is important to sell before the signing of the title as this involve some total costs (including notary and property registration fees) of about 6-7% of the property price.

When the title deed has been signed the original copy thereafter has to be presented to the Property Register for inscription. When this has been done you will receive the original escritura that now is a public deed (escritura publica), which is the official statement of ownership of the property.

The last things to do is to pay the property tax, IVA and stamp duty and you also have to send a notification to the catastral office and the municipality to pay the yearly taxes.