Off-plan property in Spain: what to check before you sign the private contract?
Once the private contract is signed, the leverage is gone. Everything listed here belongs before that moment, not after.
Off-plan property in Spain: what must be settled before the private contract binds you?
For off-plan property in Spain, protection, licence, financing clause and equity plan must be settled before you sign. That means cover for every instalment by aval bancario or seguro de caución, the building licence, a condición suspensiva tying the contract to the financing, and an equity plan that reaches to handover. Once you have signed, the leverage is gone.
Protection and licence
Author & regulatory separation. Content author: Siegfried Perini.
Mortgage brokerage in Spain and Portugal is carried out under the §34i GewO licence held by Olga Nikushkina; in Portugal through a locally licensed intermediary. This information does not replace legal or tax advice.
The private contract binds
Off-plan property in Spain: the private contract binds. What to settle beforehand — protection, licence, financing clause, equity plan.
The developer's lawyer acts for the developer: Your own independent Spanish lawyer is not optional on an off-plan purchase.
Start on the financing before the private contract
An indicative review shows whether the plan holds; afterwards it merely confirms what you already owe.
Which seven points should you settle before signing for off-plan property in Spain? With off-plan property in Spain, settle everything that stops being negotiable once you have signed.
Seven points in practice: the NIE and a Spanish bank account applied for, since both take time; a robust view of financeability based on your self-disclosure; cover for the instalments by aval bancario or seguro de caución, produced before the first payment;
the development's building licence; a payment schedule you can service without a bank; a condición suspensiva tying the contract to the financing; and an equity plan that reaches all the way to handover, not just to the first instalment.
That last point is missing from almost every set of advice.
Once you have signed, the leverage is gone: the contrato de arras typically binds 10 per cent of the purchase price, and without a financing condition that money is lost if the bank later says no.
Building licence (licencia de obra mayor) granted and in force — not "applied for". Bank guarantee or surety insurance for every instalment, in your name. Aval bancario versus surety insurance. Dedicated account named in the contract. Developer checked: commercial register, completed projects, liquidity. A first project is a different risk from a twentieth. Nota simple for the plot: owner, charges, no surprises.
What must be in it
The contract needs a financing clause, a completion date with delay clause and right of withdrawal, a final price and the specification as part of the contract.
Financing clause: deadline, minimum amount, how a refusal is evidenced, and the consequence for instalments already paid. Completion date with delay clause and a hard right of withdrawal after a defined overrun. Final price, not "from". Including parking, storeroom, upgrades. Specification (memoria de calidades) as part of the contract, signed page by page.
The equity plan almost nobody draws up
Add all instalments up to handover and the purchase costs at completion, then subtract what is genuinely available. The difference is the gap.
1. Total of all instalments up to handover — that is your equity requirement during the build. 2. Plus purchase costs at completion (IVA/AJD, notary, registry, advice). 3. Minus what is genuinely available — not what is "there in principle". 4. The difference is the gap. It has three possible answers: own funds, borrowing against German property — or no off-plan purchase.
This calculation takes half an hour. Doing it afterwards costs considerably more.
Frequently asked questions
Can I withdraw from the private contract?
Only as the contract allows. Without the right clauses, exiting is expensive — up to losing the instalments paid.
What does the initial consultation cost?
Nothing. In a first conversation we tell you what is feasible and which bank fits — including when a plan does not hold in your situation.
How much of the purchase price does the contrato de arras bind on off-plan property in Spain?
The contrato de arras typically binds 10 per cent of the purchase price. Without a financing condition that money is lost if the bank later says no.
New-build in Spain — let us work through the construction phase together
We check which part of the price has to come from your own funds, what a German bank can raise against existing property, and what the Spanish bank takes on at completion — free of charge, no upfront cost.
Related pages
Construction phase financing in Spain: why won't the standard bank pay?
Construction phase financing in Spain: the mortgage only comes at completion, so off-plan instalments of often 20 to 30 per cent are your own money.
Equity release: how do you finance developer instalments in Spain?
Equity release against German property: developer instalments in Spain are equity — raise up to 80 % of the lending value and appear as a cash buyer.
Aval bancario or seguro de caución: are your off-plan instalments protected?
Aval bancario or seguro de caución: every instalment paid to a Spanish developer must be secured from the first euro. What the law requires.
Developer mortgage subrogation: must you take it over, or can you redeem it?
Developer mortgage subrogation: at handover the buyer may take over the developer's loan share for their unit — or bring their own financing.
Building mortgage for a self-build in Spain: how does the bank pay out?
Building mortgage for a self-build in Spain: the hipoteca de autopromotor releases funds against construction progress. The plot counts as your equity.
Mortgage interest rate in Spain: when is it fixed on a new build?
Mortgage interest rate in Spain on a new build: approval comes at the end, two to three years after the private contract. Why, and how to limit the risk.
Content by Siegfried Perini — local brand representative since 2019, active in real estate since 1992, entered in the German intermediary register (§ 11a GewO) as a person directly involved in brokerage and advice. Point of contact for German-speaking buyers in Spain and Portugal. Brokerage by Olga Nikushkina, mortgage credit intermediary under § 34i German Trade Regulation (GewO); in Portugal through a locally licensed intermediary.