A large share of the homes sold around Torrevieja, Orihuela Costa and the rest of the Vega Baja are new builds, many of them bought before the first brick is laid. Off-plan purchases can secure a better price, a choice of unit and a finish you like, but they also mean handing money to a developer for something that does not yet exist. Spanish law gives buyers strong protection here, provided you know which documents to ask for and when. This guide walks through the process as we see it working on the ground: from checking the developer and the building licence, to the individual bank guarantee for every payment, the tax bill at completion and the snagging list you should prepare before collecting the keys.
Off-plan, key-ready or resale: choosing the right stage
New developments on the southern Costa Blanca are usually marketed in three phases. Off-plan means the project has a licence, or is waiting for one, and construction has not started or is at an early stage. Under construction means the structure is going up and you can often visit the site. Key-ready means the building has its first-occupation paperwork and you can complete within weeks.
The earlier you commit, the more choice you have over orientation, floor and layout, and developers often reserve their best launch prices for the first buyers. The trade-off is time: delivery on a typical apartment block runs from roughly eighteen months to well over two years, and delays happen. Key-ready units cost more but remove most of the construction risk. If you are comparing locations, our guides to Orihuela Costa, Villamartín and Torrevieja explain where most new projects are concentrated.
Due diligence on the developer and the project
Before signing anything, your lawyer should verify a short list of points that protect you later:
- Land ownership and charges: a nota simple from the Land Registry showing the developer owns the plot and listing any mortgage on it. A developer loan is normal; what matters is that your unit is released from it at completion.
- Building licence (licencia de obras) issued by the town hall of Torrevieja, Orihuela or the relevant municipality, and whether the project matches it.
- Bank and account: the name of the bank that will issue your guarantee and the special account where your payments must go.
- Specifications and plans: the memoria de calidades and plans must be annexed to the contract, so the finish you were shown is the finish you are owed.
- Track record: completed projects in the area, which you can visit and whose owners you can talk to.
A developer who is reluctant to provide any of this is giving you useful information.
The bank guarantee under Ley 38/1999: your main protection
The Building Act, Ley 38/1999 de Ordenación de la Edificación (LOE), in its first additional provision as rewritten by Ley 20/2015, requires developers of residential property to guarantee the money buyers pay before completion. In practice this means:
- Every payment on account must be covered by an individual bank guarantee (aval) or an insurance policy issued in your name, including the legal interest.
- The money must be paid into a special account at a bank or credit institution, separate from the developer's other funds.
- If the building is not started or not delivered on the agreed date, or does not obtain the documentation needed for occupation, you can claim back what you paid plus interest.
Do not accept a generic promise that guarantees exist. Ask for the individual certificate for each stage payment, check that it names you and the specific unit, and keep the originals. Your lawyer should also confirm that payments are going to the account named in the guarantee, not to an unrelated account.
Reservation, contract and stage payments
The usual sequence on the Costa Blanca is a reservation fee to take the unit off the market, followed within a few weeks by the private purchase contract. Payment schedules vary by developer, but a common pattern is a percentage on signing the contract, further instalments during construction, and the balance on completion before the notary. Many buyers pay somewhere in the region of 30 to 40 per cent before completion, but the figure is negotiable and depends on the project.
Read the contract for the delivery date and any grace period, penalties for delay, what happens if you cannot obtain a mortgage, and whether the developer can change specifications. Clauses allowing unilateral changes should be limited to minor, equivalent substitutions. If you need finance for the final payment, see our guide to mortgages for non-residents and start the process early.
IVA and AJD: the tax bill on a new build
A first transfer of a new home is not subject to the resale transfer tax (ITP). Instead you pay:
- IVA (VAT) at 10% on the price of a dwelling, including a garage and storage room sold with it. The developer charges IVA on each stage payment, so it is spread across the schedule rather than paid in one go.
- AJD (stamp duty) on the deed of sale in the Comunitat Valenciana: 1.5% for deeds signed up to 31 May 2026 and 1.4% from 1 June 2026, following the regional tax law Ley 5/2025.
On top of that come notary and Land Registry fees and your lawyer's fee, often around 1% plus IVA. Commercial units, plots and some special cases carry different IVA rates, so check with your lawyer. For the full breakdown including annual costs, read our guide to buying costs in Alicante.
Completion, occupation paperwork and connecting utilities
When construction ends, the architect signs the certificate of completion, the developer registers the new building, and the town hall and regional authorities issue the documentation needed for occupation. Only then should you sign the escritura before the notary and pay the balance. At that point the developer's mortgage over your unit must be cancelled, or your share of it released, and the bank guarantees are returned to the developer.
After completion you will need to contract water and electricity in your name, which is straightforward once the building has its paperwork. If you plan to rent the property to holidaymakers, remember that new communities can restrict tourist use and that a regional registration is required; see our note on holiday rental licences.
Snagging and the warranties that follow
Before signing, inspect the property with your lawyer, an independent surveyor or a trusted local contact and prepare a written snagging list: cracked tiles, doors that do not close, poor sealing around windows and showers, air-conditioning pre-installation that does not work, paint marks, drainage on terraces. Ask for the list to be signed by the developer with a date for repairs. Small defects are normal on any new build; what matters is that they are recorded.
After delivery the LOE sets three warranty periods counted from the date of acceptance of the works: one year for finishing defects, three years for defects affecting habitability, such as damp or insulation, and ten years for structural damage. Developers of housing must hold ten-year insurance covering structural defects. Keep all correspondence and photographs, because claims depend on proof.