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Welex, law firm in La Costa del Sol and experts in buying and selling in Spain, is pleased to explain in this blog the legal guarantees for the buyer of a property under construction in Spain.

If you are interested in buying a property under construction in Andalusia, you should know that there are a series of legal guarantees for the buyer established in both regional and national legislation.

These guarantees for the purchase of a property under construction in Spain include:

  1. The right to receive detailed information about the property
  2. The protection of sums advanced
  3. Specific measures in the event of non-compliance by the developer or seller, such as the return of these amounts plus interest.

At the autonomous level in Andalusia, there is an obligation for the developer to deliver an Abbreviated Information Document (DIA) which will contain the relevant information for the signing of your purchase contract in Spain, such as:

  1. Identification details of the seller
  2. Identification details of the construction company
  3. Plans of the property and details of its surface area.
  4. Building specifications
  5. Purchase price
  6. Your method of payment.

The Courts in Spain have also reinforced the application of the legal guarantees in the purchase of properties under construction, highlighting the importance of delivering the property in a habitable condition and obtaining the licence of first occupation as a condition for the delivery of the property and cancellation of these guarantees.

Therefore, the developer must deposit the amounts advanced by the buyer in a special account. After the signing of the private purchase contract, he must provide the buyer with an insurance or guarantee to ensure the repayment of these amounts.

With regard to the taxes that you must pay as a buyer of a property in Andalusia, we must distinguish whether it is a first transfer, i.e. a newly built property sold by the developer, or whether it is a second or subsequent transfer of the property by a private individual.

In the case of the purchase of the property from the developer, the purchaser will have to pay two taxes on the purchase.

  1. On the one hand, the VAT applicable to the purchase of a property in Spain is generally 10%.
  2. On the other hand, in addition to the aforementioned VAT, the buyer will have to pay the stamp duty, with a rate of 1.2% on the purchase price.

If the purchase of the property is from a private individual, in Andalusia the purchase of a property is subject to Transfer Tax and Stamp Duty, with a general rate of 7% on the purchase price, or a reduced rate if certain specific conditions related to business activities in the real estate sector are met.

This would therefore involve the purchase of the property for resale by a natural or legal person carrying on a business activity to which the rules for adaptation of the General Plan for the Real Estate Sector are applicable.

If you have any doubts about the guarantee for the purchase of a property under construction in Spain, or any other legal, accounting or fiscal matter in Spain, please do not hesitate to contact us, we will be delighted to help you.

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