The Step-by-Step Process of Buying a New-Build in Spain (Costa del Sol, Andalusia)

Important — please read. This guide is general information for foreign buyers, not personalised legal or tax advice. All rates and figures are those in force at the date of review (28 July 2026) and can change by fiscal year and by autonomous community; individual circumstances (residence status, buyer profile, type of property) can change the outcome. Before committing, confirm your specific case with a qualified independent lawyer (abogado colegiado) and a tax advisor in Spain. eVoost publishes this as editorial reference only and accepts no liability for decisions taken on the basis of it.

TL;DR: Buying a new-build home in Spain follows a clear legal path: get a foreigner’s ID number (NIE) [8] and a Spanish bank account, sign a reservation contract with a small deposit, then a private purchase contract with staged payments that are legally protected by a mandatory developer bank guarantee under Law 38/1999 as amended by Law 20/2015 [3][4]. It completes before a notary with the public deed of sale (escritura) [9], at which point a new-build in Andalusia generally carries 10% VAT (IVA) [1] plus 1.2% Stamp Duty (AJD) [2], and the property is inscribed in the Land Registry [7][10].

Spain’s legal framework offers significant protection for buyers of off-plan or newly built property, though the process differs from many countries. A new-build home is generally subject to Value Added Tax (IVA) [1] rather than the transfer tax (ITP) that applies to resale properties.

Preliminary Steps: NIE, Bank Account, Reservation

The essential first step is to obtain a Número de Identidad de Extranjero (NIE), a tax ID required for any significant economic transaction in Spain — buying property, paying taxes, contracting utilities. Apply in person at designated National Police stations in Spain or through a Spanish consulate abroad; the official state fee is paid via Tasa modelo 790 Código 012 and, at the date of review (NIE assignment on request), is €9.84 — under €10 [8]. A Spanish bank account is, in practice, a necessity for every later payment.

Once a property is chosen, the process typically begins with a contrato de reserva (reservation agreement) and a small deposit (commonly around €6,000–€10,000), taking the property off the market for a short period — usually about 15 to 30 days — while the buyer’s lawyer runs initial due diligence.

Private Purchase Contract and Stage Payments

Next comes the contrato privado de compraventa (private purchase contract): a detailed, legally binding agreement setting out final price, construction specifications, payment schedule and completion deadline. On signing, a more substantial payment is typically required — often in the region of 30% of the price, less the reservation deposit. Remaining payments are usually staged as construction progresses, commonly bringing the total paid to roughly 40–50% during the build, with the balance due on completion.

Bank Guarantees: Protecting Advance Payments

Under the First Additional Provision of Law 38/1999 on Building Regulations (Ordenación de la Edificación), as amended by Law 20/2015 [3][4] — which repealed the historic Law 57/1968 with effect from 1 January 2016 — developers are legally obliged to guarantee all amounts advanced by buyers before completion, through a bank guarantee (aval bancario) or an insurance policy [3]. The guarantee is intended to ensure that, if the developer fails to complete by the agreed deadline or becomes insolvent, the buyer can recover the sums paid plus the applicable legal interest [3]. The developer must issue an individual certificate, and the obligation runs from the point at which the developer obtains the building licence (licencia de edificación).

Completion: The Notarial Deed (Escritura de Compraventa)

The purchase completes before a Spanish Notario (public notary) by signing the escritura pública de compraventa. The notary is an impartial public official who verifies the parties’ identity, confirms the property’s legal status and ensures compliance with Spanish law [9]. The balance is paid to the developer, and the keys are handed over.

Taxes and Fees on a New-Build Property

For a new-build bought from a developer in Andalusia, the main taxes generally are:

• Value Added Tax (IVA): the reduced rate of 10% of the price applies to the first delivery of a new residential dwelling by the developer [1]. (A super-reduced 4% rate applies to officially protected housing — VPO de régimen especial o de promoción pública; if the property may qualify, confirm the rate with an advisor.) IVA is paid to the developer, who remits it.
• Stamp Duty (AJD – Actos Jurídicos Documentados): a regional tax on the formalisation of notarial documents. In Andalusia the general rate is 1.2% of the price at the date of review, filed within two months from the day after signing the deed (for taxable events on or after 1 January 2022) [2]. Reduced AJD rates (e.g. 0.3% or 0.1%) exist for certain buyers — under-35s, people with recognised disability or large families acquiring a habitual residence below set value thresholds; eligibility and thresholds should be confirmed with an advisor [2].

Other significant costs include notary fees and Land Registry fees, both set by national statutory tariffs (arancel) based on the property’s value [5][6], plus non-regulated legal and administrative fees (independent lawyer and gestoría). As an orientation only, buyers often budget in the region of 10–14% of the price on top of the price for all taxes and fees; the exact figure depends on the price, the applicable rates and the professionals engaged, and should be confirmed for the specific transaction.

Land Registry Inscription

After signing, the deed is submitted to the local Registro de la Propiedad (Land Registry) [10]. It is the inscription — not the notarial deed alone — that gives the fullest legal protection of ownership against third parties; it is usually handled by a gestoría or the buyer’s lawyer. Under the Mortgage Law (Ley Hipotecaria, art. 18), the registrar must qualify and record the deed within 15 business days once all documents and tax payments are correctly submitted [7].

How to Buy a New-Build in Spain, Step by Step

1. Engage an independent lawyer specialising in Spanish property law.
2. Obtain your NIE and open a bank account — NIE via Tasa 790/012 [8], plus a local account for payments.
3. Sign a reservation agreement with a small deposit to reserve the unit.
4. Conduct due diligence — verify the developer’s ownership, planning permissions and building licence, and confirm there are no outstanding charges on the land.
5. Sign the private purchase contract and pay the agreed deposit (often ~30% of the price).
6. Make stage payments and secure guarantees — obtain an individual bank-guarantee certificate for every amount advanced [3][4].
7. Final inspection (snagging) against the contract specifications before completion.
8. Sign the public deed (escritura) at the notary [9], paying the balance, taxes (generally 10% IVA [1] + 1.2% AJD in Andalusia [2]) and fees; you receive the keys.
9. Register the property — the deed is filed with the Land Registry (recorded within 15 business days once tax is paid and documents are in order) [7][10].
10. Set up utilities in your name.

FAQ

What is an NIE and why do I need it?

A tax identification number for foreigners, mandatory for any major financial or legal transaction in Spain and required before signing the final deed. The state fee (Tasa 790 Código 012) is €9.84 at the date of review [8].

What are the main taxes on a new-build in Andalusia?

Generally two: national 10% VAT (IVA) [1] and regional Stamp Duty (AJD) at a general rate of 1.2% [2], filed within two months from the day after signing the deed (for taxable events on or after 1 January 2022) [2]; reduced AJD rates may apply to certain buyers. A resale home is taxed differently — Property Transfer Tax (ITP) instead of VAT + AJD. Confirm the rates for your case with a tax advisor.

What is a bank guarantee (aval bancario)?

A legal requirement under Law 38/1999 (as amended by Law 20/2015) protecting money paid to a developer for an off-plan property [3][4]: if the developer fails to finish on time or goes into liquidation, the buyer can recover payments plus the applicable legal interest [3]. The developer must issue an individual guarantee certificate.

Reservation contract vs. private purchase contract?

A reservation contract is a simple preliminary agreement with a small deposit (commonly €6,000–€10,000) to hold a property briefly. The private purchase contract (contrato de compraventa) is a detailed, legally binding commitment involving a larger payment (often ~30% of the price).

How much should I budget on top of the price?

As an orientation only, many buyers plan for roughly 10–14% in taxes and fees — 10% IVA [1] and 1.2% AJD [2] plus statutory notary [5] and land-registry [6] fees and non-regulated legal costs. Confirm the exact figure for your purchase.

Do I need a Spanish lawyer?

Not legally compulsory, but strongly recommended for foreign buyers: an independent property lawyer acts in your interest, runs due diligence on property and developer, and reviews all contracts (including the bank-guarantee certificate [3]).

Disclaimer. This guide is general editorial information only and does not constitute legal or tax advice. Rates, fees, thresholds and regulations are stated as in force at the review date (28 July 2026) and change by fiscal year and by autonomous community; buyer-specific factors can change the result. Always confirm your specific situation with a qualified independent lawyer (abogado colegiado) and tax advisor in Spain before acting. Published by eVoost (Editorial); no liability is accepted for reliance on this content.

Sources:
[1] BOE — Ley 37/1992, de 28 de diciembre, del Impuesto sobre el Valor Añadido (art. 91: 10% reduced rate on first delivery of new dwellings; 4% super-reduced for VPO) — https://www.boe.es/buscar/act.php?id=BOE-A-1992-28740
[2] Junta de Andalucía — Agencia Tributaria de Andalucía, Impuesto sobre Transmisiones Patrimoniales y Actos Jurídicos Documentados (ITP/AJD) — https://www.juntadeandalucia.es/agenciatributariadeandalucia/tributos-propios-y-cedidos/impuesto-sobre-transmisiones-patrimoniales-y-actos-juridicos-documentados
[3] BOE — Ley 38/1999, de 5 de noviembre, de Ordenación de la Edificación (Disposición adicional primera: garantía de cantidades anticipadas) — https://www.boe.es/buscar/act.php?id=BOE-A-1999-21567
[4] BOE — Ley 20/2015, de 14 de julio (Disposición final tercera, que reforma la garantía de cantidades anticipadas y deroga la Ley 57/1968) — https://www.boe.es/buscar/act.php?id=BOE-A-2015-7897
[5] BOE — Real Decreto 1426/1989, de 17 de noviembre, por el que se aprueba el Arancel de los Notarios — https://www.boe.es/buscar/act.php?id=BOE-A-1989-27356
[6] BOE — Real Decreto 1427/1989, de 17 de noviembre, por el que se aprueba el Arancel de los Registradores de la Propiedad — https://www.boe.es/buscar/act.php?id=BOE-A-1989-27357
[7] BOE — Decreto de 8 de febrero de 1946, Ley Hipotecaria (art. 18: plazo de calificación e inscripción) — https://www.boe.es/buscar/act.php?id=BOE-A-1946-2453
[8] Sede Electrónica de la Policía Nacional — Tasa modelo 790 Código 012 (expedición del NIE) — https://sede.policia.gob.es/Tasa790_012/
[9] Consejo General del Notariado — https://www.notariado.org/
[10] Colegio de Registradores de España — https://www.registradores.org/