New legislation provides greater security when buying a new built property.

8 Mar | 8 min read

If you are planning to buy a home on a project level (new construction) in Spain, you should know that Spanish law has advanced in this area and has made changes, so the buyer is now even better protected than before.

By law, the client must hand out various documents that will ensure you as a buyer a successful purchase. The bank guarantee is the legal instrument that guarantees the amounts paid on account, so if the purchase is not completed, you will be able to get the amounts paid back. The account payments must be deposited in a special bank account in the name of the client, set up in the bank that guarantees these payments. That is, the same bank that issues the bank guarantees.

The client is obliged to provide this account, so that you will receive information regarding the bank account guaranteeing your money from the time of signing the private purchase contract.

You must also make sure that the DIA document (Information report regarding the project), the quality report and plans for the construction are signed. In the DIA document and the quality report, the construction of the project itself is specified, among other things, the type of materials used, which elements are included in the home at the time of takeover, etc.

The cost of buying a home on a project level varies considerably compared to buying a property that has already been completed. When the purchase price is stated, the client must inform about the applicable VAT rate, currently it is 10% of the net price. This VAT is paid directly to the seller. In addition, a stamp duty must be paid, 1.2% of the purchase price, this tax must be paid by the buyer after signing the deed. Notary fees and registration / registration are the same as for the purchase of a home that has already been built – these expenses will vary in relation to the price of the home.

It is important to be aware that builders have a smaller margin for possible changes in the design compared to the original plans. This may, among other things, be due to technical requirements, which means that changes must be made to the plans. However, the client must never insert an element of inferior quality than you were initially informed about. The change must be of similar or higher quality. If the change is of inferior quality, the seller is obliged to inform you about it before.

With regard to delivery deadlines, the private purchase contract must state when the project is expected to be completed and when the home will be handed over. There will always be a possibility of delay in the construction, therefore it must be stated in the contract how many months extra delivery deadline the client has to hand over the home. However, there may be delays that are not the seller’s fault and thus force majeure.

When the construction is completed, the client must meet a number of requirements, such as to obtain a commissioning permit before the home can be transferred. This permit is a guarantee that the project has been built in accordance with the original construction project and that it meets all residential requirements.

When buying a home on a project level, the seller has usually taken out a mortgage loan on the property. When buying a newly built home, you have two alternatives, either to take over the obligations of this mortgage loan, which will usually be more financially attractive than creating a brand-new loan, or the mortgage loan can be repaid with part of the amount you have to pay the seller. the day you sign the deed to the property.

It is very gratifying to see how Spanish law has made great strides in protecting buyers, but in addition to these advances and all the previously mentioned documents, the seller must also meet other legal requirements before the transfer of the home can take place.

We look forward to welcoming you to our offices in Spain and to guiding you through the process so that you can purchase housing with peace of mind.

Write or call us at info@homes-abroad.com / +34 609 97 72 62 or visit us at www.homes-abroad.com

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