A practical guide to reservation and arras agreements for new-build (obra nueva) and off-plan (sobre plano) purchases in Spain, and the legal safeguards that protect the money you pay before the building exists.

Scope note: this article covers purchases of new-build and off-plan property bought directly from a developer. If you are buying an existing (second-hand) home, see our companion article, “The Spanish Arras Contract for Resale Homes.”

Why Off-Plan Purchases Work Differently

Buying a home that is still under construction, or not yet started, is legally a different transaction from buying an existing property. Instead of a single deposit followed shortly by completion, an off-plan purchase typically involves a reservation payment, an arras or private purchase contract, and then a series of staged payments — often 20% to 40% of the price in total — paid to the developer over the course of construction, well before the buyer ever receives the keys or signs the public deed (escritura pública) before a notary.

That structure creates a specific risk that does not exist when buying a resale home: the buyer is handing over money for something that does not yet exist. Spanish law responds to this with a dedicated protective regime for advance payments — on top of the ordinary rules on arras — and a foreign buyer's contract should be built around both.

The Legal Framework for Advance Payments

Since 1 January 2016, advance payments made to a developer for housing under construction are regulated primarily by Law 20/2015 (which replaced the earlier Law 57/1968), together with the First Additional Provision of the Building Planning Act (LOE, Law 38/1999). Under this regime, a developer selling off-plan is legally required to:

• Guarantee every payment received in advance — through a bank guarantee (aval) or a surety insurance policy (seguro de caución) covering 100% of the amounts paid, plus legal interest, before the home is delivered.

• Deposit the funds into a special, separate account used exclusively for the construction of that specific development, and not for the developer's general funds or other projects.

• Issue the buyer an individual guarantee document for each payment made, referencing the specific aval or insurance policy that covers it.

• Refund the buyer in full, with legal interest, if the property is not delivered within the agreed term (plus any contractually agreed grace period), without the buyer having to prove the developer is insolvent or wait for the developer to default formally.

This regime exists precisely because buyers of off-plan property are, in effect, financing part of the construction. A foreign buyer should never accept a payment schedule that is not backed, payment by payment, by this guarantee mechanism — regardless of how established or reputable the developer appears to be.

The Clauses Foreign Buyers Should Insist On

Beyond the guarantee regime above, the reservation and arras documents used in an off-plan purchase should include the following protections:

1. Full legal status of the land and the project

• Identification of the plot, its registry entry, and confirmation the project has a valid building licence (licencia de obras) from the town hall, with the declaración de obra nueva en construcción registered or in process at the Land Registry.

• Identification and good standing of the developer (promotora), including its registered company details.

2. An explicit, payment-by-payment guarantee clause

• A clause requiring the developer to provide, within a fixed number of days of each payment, an individual aval or seguro de caución certificate referencing that specific amount — not a general assurance that guarantees "exist."

• Confirmation of the special account into which all advance payments must be deposited.

3. A binding specifications annex (memoria de calidades)

• The finishes, materials, layout, and included fittings attached as a binding annex to the contract, with a clause preventing the developer from downgrading specifications without the buyer's written consent.

4. A firm delivery date with real consequences for delay

• A specific delivery deadline, a defined (and reasonable) grace period, and an unconditional right for the buyer to rescind the contract and recover 100% of amounts paid plus legal interest if that deadline is missed — consistent with the statutory guarantee regime, spelled out in the contract itself so there is no room for dispute.

5. Suspensive clauses adapted to a staged purchase

• Subject to mortgage financing where relevant — noting that financing an off-plan purchase often works differently from financing a resale purchase, and any pre-approval or subrogation arrangement with the developer's own lender should be reviewed independently.

• Subject to the buyer obtaining a NIE and, where needed, a Spanish bank account in time for each scheduled payment.

6. Pre-completion documentation requirements

• Delivery, before signing, of the Licencia de Primera Ocupación (or Certificado Final de Obra where the licence is pending), the energy performance certificate, and confirmation that utilities (water, electricity) are connected.

• Confirmation that the ten-year structural defects insurance (seguro decenal) required under Article 19 of the LOE is in place, and delivery of the Libro del Edificio (building handbook) at completion.

7. A snagging and joint-inspection clause

• The right to a joint inspection of the finished property (acta de recepción) before signing the deed, with any defects formally listed, a binding deadline for the developer to fix them, and — where appropriate — the right to withhold a percentage of the final payment until they are resolved.

8. Payment, currency, and anti-money-laundering documentation

• Specification of currency and payment channel for each staged payment, with the source-of-funds documentation Spanish notaries and banks require under anti-money-laundering rules for international transfers.

9. Power of attorney and representation

• If the buyer will not be physically present in Spain for the signing, a clause anticipating representation via a notarised and, where needed, apostilled power of attorney.

10. Language, governing law, and independent legal representation

• A bilingual contract with a clause specifying which language version prevails, confirmation that Spanish law and the courts of the property's location govern the agreement, and confirmation that the buyer has been advised by an independent Spanish lawyer rather than relying solely on the developer's sales team.

A Note on Taxation

New-build and off-plan purchases are taxed differently from resale properties: they are subject to VAT (IVA) — generally 10%, or 4% for officially protected housing (VPO) — plus Stamp Duty (AJD), whose rate varies by region, rather than the Transfer Tax (ITP) applied to resale transactions. Because it is a first transfer of the property, the municipal capital gains tax (plusvalía municipal) that applies to resale sales does not apply here. These figures should always be confirmed against the buyer's specific region and property type before signing.

The Bottom Line

Buying off-plan in Spain can be an excellent way to secure a new home or investment on favourable terms, but it shifts real risk onto the buyer during the construction period. The law gives that risk a specific answer — the guarantee regime for advance payments — but only if the reservation and arras contracts are drafted to invoke it properly, payment by payment. For a foreign buyer managing the purchase from abroad, that drafting is where the real protection lies.

This article is for general informational purposes only and does not constitute legal advice. Every project and developer is different, and the specific clauses and guarantees appropriate for your purchase should be reviewed by a qualified Spanish lawyer before you sign or make any payment. If you are considering an off-plan purchase in Spain, our team would be glad to review your contract and the developer's guarantees before you commit any funds.