Key takeaways

• Off plan property can be cheaper, but it is not guaranteed
• Early release buyers may have access to lower launch prices
• Buying early can give you a better choice of units and locations
• New build purchase costs need to be included in your budget
• Advance payments should have the appropriate legal protection
• Never assume a property will increase in value before completion
• Independent legal checks should be completed before you commit

Is Buying Off Plan Cheaper in Spain?

It can be.

Buying off plan in Spain can give you access to a development at an earlier price, particularly when a developer is launching its first phase and wants to establish sales momentum.

But there is an important distinction.

Off plan does not automatically mean cheap, and it certainly does not automatically mean good value.

At The Estate, we believe the better question is this:

Are you buying the right property, from the right developer, at the right stage and at the right price?

Get those four things right and buying off plan can be a very attractive way to purchase property in Spain.

Get them wrong and an apparent saving at the beginning can quickly become irrelevant.

Why Can Buying Off Plan Be Cheaper?

Developers do not necessarily release every property in a development at the same time or at the same price.

A large development may be released in phases.

The first properties can sometimes be offered at attractive launch prices. As construction progresses and properties are reserved, the developer may choose to increase prices on later releases or remaining units.

There is a commercial reason for this.

At the beginning of a development, buyers are committing to something that may exist primarily as plans, specifications, renders and a building site.

An early buyer is therefore making a decision before the finished development can be seen.

As construction progresses, some of that uncertainty disappears.

The swimming pool is visible. The landscaping starts taking shape. The views from individual apartments become easier to understand. Buyers can physically see what they are purchasing.

A developer may therefore have less reason to incentivise later buyers with the same pricing offered during an earlier release.

But this is important:

Price increases are never guaranteed.

Do not buy an off plan property simply because somebody tells you it will be worth more by the time it is completed.

Buy because the property, location, developer, specification and price make sense today.

Is Phase One Usually the Cheapest?

It can be, and this is one of the reasons experienced buyers pay attention to new development launches.

Early buyers can sometimes benefit from two things.

Price and choice.

The price may be attractive because the developer is bringing the project to market.

But choice can be equally valuable.

When a development first launches, buyers may have access to a much wider selection of units.

That could mean choosing the best orientation, the right floor, a larger terrace, better views, a corner position or a property further away from communal areas and roads.

By the time a development is approaching completion, the headline price may no longer be the only issue.

The property you would have chosen may already have been sold.

That is why we look at value rather than simply asking which unit is cheapest.

Does an Off Plan Property Always Increase in Value Before Completion?

No.

Property prices can rise and they can fall.

Local demand can change. The wider property market can change. Interest rates and lending conditions can change. Competing developments can come onto the market.

A developer increasing the advertised price of its remaining properties also does not necessarily prove that an earlier buyer’s property has increased by exactly the same amount in the open market.

There is a difference between an asking price and a completed sale.

We therefore advise clients to be cautious whenever an off plan purchase is presented primarily as a guaranteed short term investment return.

Potential capital appreciation can be an advantage.

It should not be the only reason you buy.

What Are the Other Advantages of Buying Off Plan?

Price is only one potential advantage.

Buying off plan can also give you access to a brand new property built to modern standards, with contemporary layouts, new kitchens and bathrooms, modern communal areas and greater energy efficiency than many older properties.

Depending on the developer and the stage at which you purchase, there may also be opportunities to choose certain finishes or specifications.

Payment timing can also be different from buying a completed resale property.

Rather than paying the entire purchase price at completion after the initial contractual payments, an off plan purchase commonly involves payments at agreed stages during the construction period.

The exact structure varies between developments, so buyers should understand the complete payment schedule before signing.

What Does Buying Off Plan Actually Mean?

Buying off plan means agreeing to purchase a property before its construction has been completed.

In some cases, construction may already be well under way.

In others, you may be purchasing much earlier in the development process.

You are therefore buying based on contractual documentation that can include plans, specifications, dimensions, communal facilities, building standards and an agreed completion framework.

That makes legal due diligence particularly important.

You cannot inspect the finished home in the same way you can inspect a resale property.

The paperwork has to tell you exactly what you are buying.

Are Off Plan Payments Protected in Spain?

Spanish law provides important protections concerning qualifying advance payments made towards homes under construction.

The developer must meet legal requirements concerning the protection of advance payments, including guarantees through the appropriate insurance or bank guarantee mechanisms in circumstances covered by the legislation.

The relevant guarantee can cover advance amounts, applicable taxes and legal interest where the statutory requirements are met.

This is not something buyers should simply assume has been arranged correctly.

Your independent lawyer should check the contractual arrangements and applicable guarantees before you transfer substantial funds.

What Should Be Checked Before Buying?

This is where buying off plan should become less emotional and more methodical.

Before committing to a development, buyers should understand who owns the land, who the developer is, whether the necessary permissions are in place, what exactly is being constructed and what the contractual completion terms are.

The property specification matters too.

What is included in the price?

Is parking included?

Is there a storage room?

What appliances are included?

What are the communal facilities?

What are the dimensions of the terrace?

What happens if materials shown in the specification become unavailable?

When is completion expected?

And what happens if completion is delayed?

These are not questions to ask after signing.

They are questions to ask before.

Is Off Plan Cheaper Than Buying a Resale Property?

Not necessarily.

This is where buyers need to compare like with like.

A resale apartment may have a lower purchase price but require a new kitchen, bathrooms, windows, air conditioning or a complete refurbishment.

A new build may have a higher headline price but require very little expenditure after completion.

The locations may also be different.

An older resale property could occupy a prime frontline position that would be extremely difficult to replicate with a new development.

Conversely, a new development may offer facilities, energy efficiency and contemporary living that older properties cannot easily match.

Neither is automatically better.

They are different products.

The right choice depends on what you want from the property.

What Are the Costs of Buying Off Plan in Spain?

The advertised property price should never be treated as your complete purchasing budget.

New residential property purchased from a developer is generally subject to VAT, and other acquisition costs and taxes can apply depending on the transaction and region.

There will also normally be legal and other transaction costs to consider.

This is why we encourage clients to establish a complete purchasing budget rather than simply deciding how much they want to spend on the property itself.

If your total budget is €500,000, that does not necessarily mean you should be looking at properties advertised at €500,000.

We want to understand the total cost before you commit.

Can You Sell an Off Plan Property Before Completion?

Sometimes contracts allow a buyer’s position to be transferred before completion, but you should never assume this is possible.

The contract may contain restrictions, conditions or costs relating to assignment.

If your strategy depends on selling the property before completion, this needs to be examined by your lawyer before you sign the purchase contract.

Again, the principle is simple.

Do not build an investment strategy around something you have not confirmed you are legally entitled to do.

So, Is Buying Off Plan Cheaper?

Sometimes.

And sometimes it is not.

An early release price can be attractive. Buying during an earlier phase may also give you access to properties that later buyers simply cannot choose because they have already been sold.

But the lowest price does not necessarily represent the best value.

At The Estate, we look at the complete picture.

We consider the development, developer, location, comparable property values, specification, orientation, views, payment structure and what you ultimately want the property to achieve.

For an investor, that may mean looking at future rental demand and resale appeal.

For a second home buyer, it may mean prioritising position, outdoor space and the property they will actually enjoy using.

For a permanent resident, layout, services, accessibility and year round surroundings may matter more.

Different buyers require different answers.

How The Estate Helps You Buy Off Plan

Our job is not to persuade you to buy off plan.

Our job is to help you decide whether a particular off plan property makes sense for you.

We work across Spain’s coastal property markets and can compare new developments with completed new builds and resale opportunities.

If an off plan development looks right, we help you understand the property, the location, the developer and the buying process.

We also believe legal advice should be independent.

We work with trusted legal professionals across Spain and can connect international clients with appropriate legal representation, including lawyers who can communicate in their preferred language where required.

That gives you professionals looking at the transaction from different perspectives.

We look at the property and the market.

Your lawyer looks at the legal position.

You make the final decision with the information you need.

Thinking About Buying Off Plan in Spain?

Do not start with the brochure.

Start with the numbers, the location and the questions that matter.

Ask whether the price is competitive.

Ask what else is available nearby.

Ask about the developer.

Understand the payment schedule.

Have the legal documentation checked.

And most importantly, decide whether you would still want to own the property if its value did not increase during construction.

If the answer is yes and the numbers make sense, you may have found a very good property.

Speak to one of our experts and let us help you compare the best off plan, new build and resale opportunities across the Spanish coast.