Reserving Off-Plan: Contracts and Stage Payments

Reserving off-plan on the Costa del Sol means committing to a home before it is finished, paying for it in instalments as construction advances. Done correctly, it is one of the most attractive ways for a foreign buyer to enter the Andalusian market: you fix today’s price, spread the cost, and take delivery of a brand-new property. Done carelessly, it exposes you to a developer’s solvency. This guide explains the contract sequence, the stage-payment structure, the taxes on new-build, and the legal protections that make reserving off-plan safe. For the wider journey, see our related guides on the NIE and opening a bank account, the notary completion, and mortgages for non-residents.

The off-plan contract sequence

An off-plan purchase in Spain typically moves through three documents. Understanding each one, and what money changes hands at each step, is the core of reserving off-plan safely.

1. The reservation contract (contrato de reserva)

You begin with a reservation agreement that takes the unit off the market, usually for two to four weeks, while your lawyer runs due diligence. The reservation deposit is small, commonly in the region of €3,000 to €10,000 depending on the development and price point.⁷ This is the moment to instruct an independent Spanish lawyer (not one recommended solely by the seller) to check the developer’s licence, the plot, the building permit and the guarantee arrangements before you commit further.

2. The private purchase contract (contrato privado de compraventa / arras)

Once due diligence is clear, you sign the private purchase contract. This is the binding agreement that sets the price, the specification, the completion date and the payment schedule. On signature you normally pay a first instalment: the Spanish residential standard is around 10% of the purchase price, though premium developments sometimes ask for more, and staged structures of 10% to 30% up front are seen off-plan.⁷ The contract will usually be structured as arras (a deposit contract) or as a straightforward private sale contract with a deposit; the wording determines what happens if either party pulls out, so have your lawyer confirm which regime applies.

3. Completion at the notary (escritura publica)

When the building is finished and has its licence of first occupation (licencia de primera ocupacion), you complete before a notary. You pay the outstanding balance, the title deed (escritura) is signed, and the property is registered in your name. If you are using a mortgage, the loan is drawn down at this point.

How stage payments work

Between the private contract and completion, off-plan developers usually collect the price in tranches linked to construction milestones (for example at foundations and at structural completion), with the largest share, often around 60% to 70% of the price, paid at the notary on delivery.⁷ A common Costa del Sol pattern looks like this:

Exact schedules vary by developer, so read the payment plan in your contract carefully. Every payment before completion is money handed to the developer for a home that does not yet exist, which is precisely why the law requires those sums to be guaranteed.

Bank guarantees: your legal protection under Ley 57/1968

This is the single most important safeguard when reserving off-plan. Under Ley 57/1968, reinforced by Ley 20/2015 (in force since January 2016), a developer must provide, free of charge, a bank guarantee or insurance policy that secures the refund of every stage payment (plus interest) if the home is not delivered or the developer becomes insolvent.² Ley 20/2015 also placed a direct duty on the depositary bank to hold buyer funds in a special account and to verify that guarantees exist, making banks jointly liable where deposits were taken without protection.² The Spanish Supreme Court has repeatedly enforced this in favour of buyers.²

Practical rules for buyers:

• Insist on an individual guarantee certificate for each amount you pay, and keep the originals.
• Pay only into the special account named in the guarantee, never into a generic developer account.
• Have your lawyer confirm the guarantor (bank or insurer) is real and the policy covers your instalments plus interest.

The original 1968 text set the guaranteed interest at 6% per year; later reform ties it to the statutory interest rate, so treat the exact percentage as something your lawyer confirms against the current guarantee wording rather than a fixed number.²

Taxes on a new-build purchase in Andalucia

Off-plan homes bought new from a developer are taxed differently from resale property. Instead of transfer tax (ITP), you pay:

• IVA (VAT) at 10% on the purchase price. This is the national rate for residential new-build and is charged on your instalments as you pay them.⁴⁵
• AJD (Actos Juridicos Documentados, stamp duty) at 1.2% in Andalucia on new-build purchases.¹⁵

That is a combined 11.2% in tax on a new-build in Andalucia. On top of tax you should budget for notary and land registry fees, your lawyer, and any mortgage costs. As a working figure, allow roughly 13% to 15% of the price in total taxes and purchase costs for a new-build here.⁴ Note that IVA rates are set nationally and can change, and AJD is set by the Junta de Andalucia, so verify both against current rates at the time you sign.

Two costs sit with the seller, not the buyer, on a new-build: the municipal plusvalia (tax on the increase in land value) and, in a developer sale, there is no non-resident 3% retention (that retention applies when you buy from a non-resident private seller, typically on resale). See our resale-buying guide for how the 3% retention works there.

Financing off-plan as a non-resident

You do not need the full price in cash, but off-plan financing has particular features. Spanish banks lend to non-residents at lower loan-to-value (LTV) ratios than to residents: in 2026, non-resident LTVs are generally capped at around 60% to 70% for EU buyers and 50% to 60% for non-EU buyers, with the best terms reserved for stronger financial profiles.⁶ Fixed rates for non-residents run broadly in the 3.8% to 5.2% range depending on buyer profile.⁶

Because the mortgage is only drawn down at completion, you fund the reservation, the contract deposit and the construction instalments from your own resources, and the loan covers a share of the final balance at the notary. Get a mortgage decision in principle early, and remember that the bank values the property at delivery, which can differ from the contract price. Our mortgages-for-non-residents guide covers documents, timelines and lenders in detail.

What you will owe after completion

Once the home is yours, ongoing obligations begin. As a non-resident owner you must file Modelo 210 for Non-Resident Income Tax (IRNR). If the property is for your own use and left empty, you pay tax on an imputed income (renta imputada) calculated as 1.1% of the cadastral value where that value was revised within the qualifying period, or 2% otherwise.³ The tax rate on that base is 19% for residents of the EU, EEA (Iceland, Liechtenstein, Norway) and 24% for non-EU residents, which since Brexit includes the United Kingdom.³ If you let the property, rental income is declared on the same Modelo 210, and EU/EEA residents may deduct expenses while non-EU residents generally cannot.³ You will also pay annual IBI (local property tax) to the town hall. Our guide to owning and letting covers these filings in full.

Before you reserve: a short checklist

• Get your NIE and a Spanish bank account arranged in parallel (see our NIE and banking guide).
• Appoint an independent lawyer before paying any reservation deposit.
• Verify the developer’s building licence and the bank guarantee arrangement.
• Read the payment schedule and confirm each instalment is individually guaranteed.
• Budget 13% to 15% on top of the price for tax and costs, and confirm current IVA and AJD rates at signing.
• Line up mortgage financing early if you need it, allowing for non-resident LTV limits.

Reserving off-plan on the Costa del Sol is well-trodden and, with the statutory guarantees under Ley 57/1968 and an independent lawyer checking each step, a secure way to buy. The discipline that protects you is simple: never pay an unguaranteed instalment, and confirm every figure in writing before you sign.