Buying projects
One of the biggest differences of buying a new production directly from the developer/promoter, is of course, it can be more difficult to know exactly what you are buying. On the other hand, there are usually more opportunities to make choices.
Further the payment plan is different. Normally a down payment is paid initially and then several installments payments during the construction process until final payment when construction is complete.
The tax payable on the purchase differs for new productions and second hand. When purchasing new production, the buyer pays on the purchase price VAT, IVA, currently 10%, plus stamp duty which in Andalusia is 1,2%.
In the case of second hand, it is instead a transfer tax at 7% in Andalusia but no VAT.
When purchasing directly from the developer/promoter, certain conditions apply to protect the buyer. For example:
- Complete details on the title deed of the plot, seller, developer, architect and person responsible for the construction
- Details of the materials that will be used
- Drawings of the apartment/property with indication of area
- Building permits and other permits
- Information on the total purchase price including VAT and payment terms
- All installment payments must be made to a separate account (the funds may only be used for construction).
- Date when move-in can take place
- Liability insurance that guarantees hidden defects and damage
After taking possession, the seller must provide a warranty for any defects and deficiencies, which varies in length depending on what the defects are (10 years for defects that affect structural elements, 3 years for defects that affect habitability and 1 year for defects of an aesthetic nature).