Since when does this protection apply?

The current wording of the Building Act has applied since 1 January 2016. Earlier contracts remain under the 1968 law.

What if the developer does not set up the guarantee?

The law provides a fine of up to 25% of the amounts that should have been guaranteed.

Do I get the VAT I paid back too?

Yes. The guarantee covers what you paid, the taxes and legal interest.

When is the guarantee cancelled?

When the home obtains its first occupancy licence or habitability certificate and is handed over to you with documentation.

New build · Building Act

Off-plan, with every euro guaranteed.

Buying off-plan in Spain comes with protection in law: once the building licence is granted, the developer must guarantee the refund of everything you pay, taxes and interest included, through a bank guarantee or an individual surety insurance policy in your name. This is what to check before you sign.

Before you sign

Five things to check

The building licence

The duty to guarantee starts with the licence. In Andalusia the advert and the development information document must say whether there is one.

The guarantee or policy, in your name

A joint bank guarantee or a surety insurance policy issued per buyer. The developer hands you the document when you sign, and the insurer cannot raise against you any dispute it has with the developer.

The special account

Your payments go into an account kept apart from any other developer money, for the construction only. The bank must demand the guarantee, at its own risk, before opening it.

What the contract says

The refund of what you paid, with taxes and interest, if the works do not start, do not finish on time or do not get the occupancy licence; who provides the guarantee; and the account you pay into.

The handover date

In Andalusia the information document must give the handover date with at least the quarter and the year.

If they do not deliver on time

You choose: cancel the contract and get back what you paid plus legal interest, or give the developer a written extension with a new date. If you cancel:

Send the developer a formal demand.
If they do not refund you within 30 days, claim from the bank or the insurer.
The insurer has 30 days from your claim to pay.
With a bank guarantee you have two years from the breach to claim the refund. Let that deadline pass and the guarantee expires.

What changed in 2026: buying to invest

In May 2026 the Supreme Court (judgment 722/2026) denied the protection of the old 1968 law to a purchase it saw as a pure investment: that protection covers buying to live in, as a second home or for your own holidays. The case involved a contract from before 2016, and it is not yet clear whether the same reasoning will apply under the current law. If you buy off-plan to resell before completion, talk to your lawyer before signing.

What the advert must say

In Andalusia, anyone advertising a home under construction or still in the design stage, even an intermediary, must name the entity guaranteeing the payments, the policy number and the special account, and give you the summary information document (DIA) free of charge if you ask (Decree 218/2005).

Frequently asked questions

Since when does this protection apply?: The current wording of the Building Act has applied since 1 January 2016. Earlier contracts remain under the 1968 law.
What if the developer does not set up the guarantee?: The law provides a fine of up to 25% of the amounts that should have been guaranteed.
Do I get the VAT I paid back too?: Yes. The guarantee covers what you paid, the taxes and legal interest.
When is the guarantee cancelled?: When the home obtains its first occupancy licence or habitability certificate and is handed over to you with documentation.

Sources

General information reviewed on 5 November 2026. The 2026 Supreme Court judgment is cited through a law firm commentary; it does not replace a review of your contract by a Spanish lawyer.

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