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New Developments in Spain
An Off Plan property is one that is available to buy before it has been constructed, and where the buyer
usually only has access to the property plans which are provided by the architect. This is typically the
case in the early development of the construction, but as the development progresses there may be a
show property to view or some apartments already built waiting to sell.
Why Buy Off Plan
One of the main differences between a resale property and a new development property is the Seller.
Whereas traditional resale properties are normally sold by a private owner, new development properties
are sold directly from the developer. The advantage of buying a property before it is built is that the
developer will initially set the selling price below the market value to attract as many early buyers as
possible. With a good chance of the price increasing for the property over the years it is constructed,
then on completion, it could be worth considerably more than the original purchase price. This typically
makes buying a new development property a good investment.
Paying for your Property
The price structure for paying for your Off Plan Property will vary between developers, but they
generally take a similar format. The initial payment to reserve your property will typically be 10% of
the final asking price. During the course of construction, which could be 3-5 years in total, another
20% will be required, which is normally paid in installments at times specified by the developer.
All of these payments will clearly be shown in the literature provided for the property so there won't
be any confusion as to how and when payments are required. The final balance of 70% is required upon
completion of the property and for this amount it should be possible to obtain a mortgage.
Advantages of buying Off Plan
Buying a property off plan is very popular here in Spain and there are many reasons for this. As an
investment, it allows a property to be bought which is typically below its initial market value, and
if house prices increase over the term of construction, then it could end up being a good financial investment.
Many people also find it favourable that the payment
structure is staggered over many years, with the bulk of the amount being due upon completion.
Many developers also provide some freedom with the internal fixtures and fittings, such
as kitchen and bathroom layout and design. This can add a nice personal touch to your property and allows
you to visualise exactly how the property will look upon completion.
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