Buying a New-Build Property on the Costa Blanca — the Complete Process, Step by Step

NIE number, bank guarantee, payment schedule, LPO, notary, Snagging List — everything you need to know from day one to key handover, for both EU/EEA and non-EU buyers

Introduction: why it pays to understand the whole process in advance

Buying property in Spain is not complicated — but it involves many steps, and each one has its own order, deadline and paperwork. Buyers who understand the process in advance move through it with confidence and no surprises. Buyers who don't can end up feeling rushed, signing documents they don't fully understand, or discovering something afterwards that they could have known from the start.

This guide walks you through the entire process — from initial financial planning to key handover. At every stage we flag what to watch out for, and where the rules genuinely differ depending on whether you are an EU/EEA citizen or a non-EU (third-country) citizen, since these two groups face different requirements around residency, mortgage financing and taxation.

1. Financial planning: the "purchase price + 13.2–13.7%" rule

The first and most important step — before you even view a property — is to work out your total budget accurately.

The most common mistake is budgeting only for the purchase price. The real total cost of a new-build property on the Costa Blanca runs 13.2–13.7% above the purchase price. This is not a surprise cost — it can be calculated precisely in advance, and it applies equally regardless of your nationality or residency status.

All costs for a new-build property (Valencian Community / Costa Blanca)

Rule of thumb: if your total budget is €400,000, look for a property priced at a maximum of €350,000 — so there is enough left over to cover taxes and associated costs.

An important detail about VAT: on off-plan purchases, VAT is not paid once at handover — it falls due immediately after every single instalment. This needs to be factored into your cash-flow planning from the start. See our tax guide for more detail.

Note: the Valencian Community reduced the AJD stamp duty rate from 1.5% to 1.4% as of 1 June 2026. Regional tax rates are set by local decree and can change — always confirm the current rate with your lawyer before completing a purchase.

2. NIE number and a Spanish bank account — the administrative foundations

Nothing moves in Spain without these two. Both should be arranged at the very start of the buying process — not the week before signing.

NIE number (Número de Identificación de Extranjero)

The NIE is your Spanish tax identification number. Without it you cannot sign a purchase contract, open a bank account, or put utility contracts in your name.

How you apply differs depending on your nationality and country of residence:

• EU/EEA citizens: you can apply in person at any Oficina de Extranjería in Spain, or through the Spanish consulate in your home country. As an EU/EEA citizen the process is generally the most straightforward, and no additional immigration documentation is required.
• Non-EU citizens (UK, US, Canada, and others): you apply through the Spanish consulate serving your country of residence (each country has one or more assigned consulates — for example, UK applicants use the relevant Spanish consulate in the UK, Canadian applicants apply through the Spanish consulate in Canada) — or in person in Spain, or via a lawyer holding power of attorney on your behalf. Applying through a consulate abroad typically takes 6–10 weeks depending on the country, so non-EU buyers in particular should start this process as early as possible.
• In all cases, instructing a lawyer or gestor to handle the application on your behalf — under a power of attorney — is the simplest route if you cannot travel to Spain or to a consulate appointment easily.

Regardless of nationality, the process can take several weeks — do not leave it until the last minute.

Related guide: Complete guide to the NIE number.

Spanish bank account

At the notary signing, the purchase price must be paid by bank cheque (Cheque Bancario) or bank transfer — and this can only be issued or sent from a Spanish bank account. In addition, off-plan instalments must be paid into the developer's segregated escrow account, which is also considerably easier to manage with a Spanish account of your own.

Opening a Spanish account as a non-resident is possible for both EU and non-EU citizens, though non-EU applicants should expect somewhat more extensive due-diligence and source-of-funds documentation from the bank, in line with anti-money-laundering rules that apply more strictly to non-EU nationals.

Related guide: for details on opening a bank account — including a comparison of banks and the Beckham Law tax regime — see our bank account guide.

Power of attorney (Poder Notarial / Poder Especial)

If you cannot or do not want to travel to Spain for every administrative step, the solution is a power of attorney signed before a notary (Poder Notarial). This is a notarised document that authorises your lawyer to act on your behalf — from applying for your NIE and opening a bank account through to signing the purchase contract itself.

This also gives you an extra layer of security: your lawyer acts in your interest, and you are kept informed at every stage of the purchase, wherever in the world you are based.

3. Choosing the property and reserving it (Documento de Reserva)

Once you have found the property, the first formal step is signing the reservation agreement (Documento de Reserva) and paying the reservation deposit.

The reservation deposit — and how to get it back

The reservation deposit is typically €3,000–€10,000, and varies by project. By paying it, you "take the property off the market": the developer cannot sell that unit to another buyer while your agreement is in force.

Is the reservation deposit refundable? This is the most common question — and the answer depends on the outcome of your lawyer's due diligence:

• If due diligence uncovers a problem (e.g. a building permit that isn't final, or a plot with an outstanding charge) → the deposit is refunded
• If you simply decide not to proceed (a voluntary withdrawal) → the deposit is forfeited

This is why it matters that your lawyer is already instructed before you pay the deposit — or at the very latest, at the same time.

What's the difference between the Documento de Reserva and the Contrato de Arras?

These two are frequently confused:

• Documento de Reserva: the reservation-stage document that takes the property off the market. Smaller amount, shorter-term commitment.
• Contrato de Arras Penitenciales: the more binding preliminary contract, signed after due diligence, for an amount equal to 10% of the purchase price. If you withdraw, you lose it. If the developer withdraws, you receive double that amount back.

4. Legal due diligence

Between paying the reservation deposit and signing the more binding preliminary contract, your lawyer carries out full legal due diligence. This is one of the most important steps in the whole process — do not skip it or cut corners here.

What does the lawyer check?

Land and title

• Requesting the Nota Simple from the Registro de la Propiedad (Land Registry) — checking for mortgages, charges, litigation or easements on the plot
• Verifying the developer's title to the land

Building permits

• Confirming a final, legally valid building permit (Licencia de Obra) is in place — without it, the developer would not have been legally entitled to start construction
• Urban-planning compliance — whether the building conforms to the local zoning plan

The developer's financial standing

• Checking for any pending insolvency or enforcement proceedings against the developer
• Confirming the existence and validity of the bank guarantee framework agreement

Bank guarantee documentation

• Proof that payments are held in a segregated escrow account
• Confirmation that the guarantee issuer (bank or insurer) is duly authorised

Once due diligence comes back clean, you can move on to signing the preliminary contract.

5. The preliminary contract and the bank guarantee (Contrato Privado de Compraventa)

Once due diligence is complete and satisfactory, you sign the private contract (Contrato Privado de Compraventa). This is the binding preliminary sale agreement — it sets out the purchase price, the payment schedule, the delivery deadline, and both parties' obligations.

The payment schedule — two common models

Developers selling off-plan property typically use one of two payment structures. It's important to clarify which model applies to your specific development before signing the preliminary contract, as it materially affects your cash-flow planning — regardless of whether you are financing with a mortgage or paying in cash.

A) Staged payment schedule

This is the more common structure: the purchase price is paid in several instalments, each tied to a construction milestone.

B) Two-instalment payment schedule

Some developments — typically smaller projects or those with a shorter build time — don't use staged payments at all, and instead split the purchase price into just two instalments: 30–40% of the purchase price on signing the preliminary contract, with the remaining balance due at key handover, on signing the Escritura.

This model is simpler to administer, but it means a much larger single payment falls due at the preliminary-contract stage — so it needs particular attention in your financial planning, and, if applicable, in the timing of your mortgage drawdown.

Important under both models: VAT (10%) falls due immediately after every instalment — this needs to be added on top of the figures above.

The bank guarantee — your safety net

At the same time as signing the preliminary contract, you must receive your first bank guarantee certificate (Aval Individual). This is a document issued by a bank or insurance company which — under Spain's Law 20/2015 — guarantees that if the developer goes into insolvency or fails to deliver the property on time, you get back everything you've paid in, plus interest at the statutory rate (interés legal del dinero, a rate set annually by the Spanish state budget law). The guarantee must be issued by the developer, and it is free of charge to the buyer.

The golden rule: never pay an instalment without a bank guarantee certificate in hand. Every single payment must be backed by its own certificate.

Related guide: for a detailed look at how the bank guarantee works, how to enforce it, and the legal background, see our bank guarantee guide.

6. The mortgage — when and how to start the process

If you need a mortgage to complete the purchase, you should start the application immediately after signing the private contract — do not wait until the Escritura is imminent.

Why start so early?

Spanish banks typically take 4–8 weeks to assess a mortgage application. The date of the Escritura (notary signing) needs to be scheduled around this — if the mortgage isn't approved, the signing cannot go ahead.

General conditions for non-resident buyers

Financing terms differ meaningfully depending on whether you are an EU/EEA citizen or a non-EU citizen — this is one of the areas where nationality has the most direct financial impact.

• EU/EEA citizens: Spanish banks typically finance 60–70% of the property's value (or the purchase price, whichever is lower) for non-resident EU/EEA buyers, with many buyers able to reach the top of that range, around 70% LTV.
• Non-EU citizens: in bank practice, non-EU (third-country) nationals are frequently offered a lower ceiling, often in the 50–60% LTV range, and may face additional documentation requirements. This applies to UK citizens too — since Brexit, UK nationals are treated as non-EU/third-country nationals for Spanish banking and tax purposes, not as EU citizens.
• Required documents (both groups): passport, NIE number, proof of income (employer reference and tax returns), 3–6 months of bank statements. Non-EU applicants should expect banks to request more extensive proof of the source of funds.
• Income requirements vary by bank and by the applicant's currency of income — as a general guide, banks typically look for a stable annual net income equivalent to at least €48,000, though this threshold and the exact LTV offered should always be confirmed directly with the lender, as it varies by nationality, income currency and individual bank policy.

Fixed or variable rate?

Spanish mortgages come in two main forms:

• Fixed rate: predictable monthly payments; the exact rate available depends on current market conditions
• Variable rate: Euribor-linked; can be lower than fixed rates at the outset, but carries more risk over the life of the loan

Because rates can change week to week, always confirm current pricing directly with your lender or a Spanish mortgage broker before applying.

7. During construction — what happens while you wait?

A defining feature of off-plan buying is that anywhere from 18 to 36 months can pass between paying the reservation deposit and receiving the keys. During this period:

• Your lawyer monitors construction progress on your behalf
• Instalments fall due according to the payment schedule — always accompanied by a bank guarantee certificate
• The developer provides regular updates on construction status (photos, site-visit opportunities)
• If you're using a mortgage, the bank will also monitor construction progress

Can you visit the site during construction? Yes — most developers organise site-visit days. It's worth taking advantage of this.

8. The occupancy licence (LPO) — the precondition for handover

Before you can move in — and before the notary signing can take place — the developer must obtain the Licencia de Primera Ocupación (LPO), the occupancy licence, from the local town hall.

This document certifies that the completed building meets all regulatory requirements and is fit for residential use. Without it:

• Permanent utility contracts cannot be issued
• The bank will not release mortgage funds
• You cannot legally move in
• A short-term tourist rental licence cannot be applied for

Obtaining the LPO typically takes 1–6 months after construction is finished — this needs to be factored into your expected handover date.

Related guide: for details on the LPO process and your rights in the event of delay, see our LPO guide.

9. The technical inspection and the Snagging List

Roughly 1–2 weeks before handover, you have the opportunity to carry out a pre-delivery inspection. This is one of the most important steps in the whole process — and one that many buyers skip or don't take seriously enough.

What should you check during the inspection?

Interior

• Walls, ceilings: cracks, paint defects, unevenness
• Flooring and tiling: cracks, incomplete grouting, uneven levels
• Doors and windows: do they open smoothly, seal properly, and do the locks work
• Kitchen and bathroom: cabinets, taps, drainage, tiling
• Electrics: every switch, socket and the fuse box
• Plumbing: any leaks, adequate water pressure

Exterior

• Terrace, balcony: flooring, railings, drainage
• Communal areas: lift, stairwell, parking

Preparing the Snagging List

Record every issue in writing, with photographs. This list (the Snagging List, or Lista de Defectos) is handed to the developer, who is obliged to fix the defects within a set period following handover.

Tip: it's worth bringing in an independent technical surveyor (aparejador) for the inspection — they will catch defects a non-specialist eye would miss.

Do not sign the handover certificate until every item on the Snagging List has been recorded and the developer has committed to the repairs. Once signed, these issues become considerably harder to enforce.

10. The notary signing (Escritura de Compraventa)

This is the culmination of the whole process — signing the final deed of sale before a notary, which formally transfers title to you.

Who is present?

• You, the buyer (or your lawyer, acting under power of attorney)
• The developer's representative
• The bank's representative (if a mortgage is involved)
• The notary
• An official interpreter — if you don't speak Spanish, the notary is legally required to provide a certified interpreter. The interpreter explains the contract point by point — don't sign until you understand everything

What do you need to bring?

• Passport (original)
• Proof of your NIE number
• Spanish bank account details
• Bank cheque (Cheque Bancario) for the remaining balance, if the developer requires it — this needs to be issued by your bank the day before signing

What happens at signing?

• The notary reads out the contract (with the interpreter's assistance)
• The remaining balance and the AJD stamp duty are paid
• If a mortgage is involved, the bank releases the funds at the same time
• The keys are handed over
• The notary certifies the deed

After signing — within 30 days

Within 30 days of signing the Escritura, the AJD stamp duty (1.4%) must be paid to the Valencian Regional Tax Authority (Agència Tributària Valenciana). This is usually handled by your lawyer or gestor — but the deadline itself is not flexible, regardless of your nationality or country of residence.

11. Registration and utility contracts

Two important steps follow the signing of the Escritura:

Land registry (Registro de la Propiedad)

Your lawyer submits the documents to the Registro de la Propiedad. Registration usually takes 2–4 weeks — after which you are the officially registered owner.

Transferring utility contracts

Once the LPO has been issued, the temporary utility connections held in the developer's name need to be transferred into yours:

• Electricity (Iberdrola, Endesa) — this requires the Boletín Eléctrico (electrician's certificate), issued by the developer
• Water (local water utility)
• Internet and telephone
• IBI (property tax) — registration with the town hall

If you're relocating to Spain, arrange your empadronamiento (registering your address with the town hall) at the same time — this is required for residency permits, the public health card, and enrolling children in school.

12. Statutory warranties — what does the law cover?

One of the key advantages of buying new-build is the statutory warranty (Seguro Decenal), which protects the buyer at three levels:

These warranties don't depend on the developer's goodwill — they are required by law, and the insurer is directly liable for them, not only the developer.

13. What non-EU buyers need to know beyond the purchase itself

Buying property in Spain is a straightforward transaction for both EU/EEA and non-EU citizens — the purchase process itself does not differ by nationality. However, non-EU buyers should be aware of several related legal points that EU/EEA citizens don't need to consider, since these affect how much time you can spend at the property and how it may be taxed.

Property ownership does not grant residency or extended stay rights

This is one of the most common misconceptions among non-EU buyers: owning property in Spain does not, by itself, give you any right to stay longer than a tourist, or any exemption from Schengen entry rules. Non-EU property owners without a residency permit are subject to exactly the same rule as any other visitor.

The Schengen 90/180-day rule

Non-EU/EEA citizens (including UK citizens, post-Brexit) may stay in the Schengen Area — which includes Spain — for a maximum of 90 days within any rolling 180-day period. This limit applies across the entire Schengen Area, not per country, and it is not extended or waived by owning property.

With the EU's Entry/Exit System (EES) and the ETIAS travel authorisation system being phased in during 2026, entries and exits are now tracked digitally, making it far easier for authorities to detect overstays than in the past.

If you intend to spend more than 90 days at a time in Spain, you will need a residency permit — the non-lucrative residence visa is the most common route for buyers who are not working in Spain.

The Golden Visa route has ended

Spain's Golden Visa programme — which previously granted residency to non-EU nationals investing at least €500,000 in Spanish property — was abolished as of 3 April 2025 (Organic Law 1/2025). No new applications have been accepted since that date. Investors who already held a Golden Visa before the deadline retain their status and renewal rights, but this is no longer an available route for new non-EU buyers, and property purchase alone no longer leads to any residency entitlement.

Taxation for non-EU owners

Spain taxes non-resident property owners differently depending on whether they are EU/EEA citizens or third-country nationals:

• On the sale of a property, the standard non-resident capital gains tax is 19% for EU/EEA residents, compared with 24% for residents of non-EU countries — including, since Brexit, UK nationals.
• Rental income earned by non-residents is also taxed differently: EU/EEA residents can deduct allowable expenses against Spanish rental income, while non-EU residents generally cannot, and are taxed at a higher flat rate on gross income.
• Spain has signed double taxation treaties with more than 90 countries, including the UK, the US and Canada. These treaties don't remove your obligation to file and pay tax in Spain, but they do prevent the same income being taxed twice — typically through a foreign tax credit claimed in your country of residence (for US citizens, via IRS Form 1116, for example).

Because tax treatment depends heavily on your specific country of tax residence, non-EU buyers in particular should get advice from a lawyer or tax adviser who is familiar with both the Spanish rules and the treaty with their home country before completing a purchase.

Frequently Asked Questions

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How long does an off-plan purchase take, from reservation to key handover?
From reservation to handover typically takes 18–36 months, depending on the construction timeline. On top of that, add the time needed to obtain the LPO (1–6 months after construction is finished). So the whole process can take anywhere from 2 to 3 years — this is worth building into your financial planning from the outset.

When should I receive the bank guarantee certificate?
At the same time as every single payment — never afterwards. If the developer doesn't hand over the guarantee certificate at the moment of payment, this is a breach of the law and a serious warning sign. Never pay without a guarantee certificate in hand.

Is it mandatory to hire a lawyer?
Not legally, but in practice it's essential. The lawyer checks the building permits, the bank guarantee, the segregated escrow account, and the terms of the contract. Legal fees (~1%) are among the best money you'll spend on the entire purchase.

When should I start the mortgage application?
Immediately after signing the private contract — Spanish banks need 4–8 weeks to assess an application. Don't leave it until the last minute, since the date of the Escritura has to be scheduled around mortgage approval.

What is a Snagging List, and when should it be prepared?
The Snagging List (Lista de Defectos) is the property's defect list, prepared during the pre-handover technical inspection. Every issue must be recorded in writing with photographs, and the developer must commit to fixing them. Never sign the handover certificate before the Snagging List has been recorded.

What happens if the developer misses the delivery deadline?
If the developer fails to deliver the property by the contractually agreed date, you have two options: continue waiting for delivery and claim compensation for the delay, or withdraw from the purchase and reclaim the full amount paid, plus statutory interest, under the bank guarantee.

When does the bank guarantee's protection end?
The bank guarantee ends once the LPO has been received and the property has been handed over. From that point on, protection comes from the statutory warranties (1/3/10 years) and the value of the completed property itself.

Does owning property in Spain give me any residency rights or exemption from the 90-day rule?
No. Property ownership by itself grants no residency status and no exemption from the Schengen 90/180-day rule for non-EU citizens. If you want to spend more than 90 days at a time in Spain, you need a separate residency permit, such as the non-lucrative residence visa.

I'm buying as an investment — what should I watch out for in particular?
If you're planning short-term tourist rental, a legal change that took effect on 3 April 2025 means that — before you even sign the reservation deposit — you need to check whether the property's residents' association (comunidad de propietarios) has given express approval for tourist rental, which requires the support of at least three-fifths (60%) of owners. You should also check whether the local town hall has introduced a moratorium or restriction on new tourist rental licences in the area. See our investment guide for more detail.

Summary: the purchase timeline at a glance

Buying an off-plan property in Spain is a well-organised process — not a leap of faith. If your lawyer checks the documentation at every stage, the bank guarantee is properly issued, and you know exactly what to expect — whether you're an EU/EEA or a non-EU buyer — the process is predictable and secure from start to finish.

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If you have any questions along the way, our team is happy to help.

Last updated: 2026. Legal processes, tax rates and municipal deadlines can change — always consult a qualified Spanish property lawyer before proceeding.