The main advantage of buying an off-plan property is absolutely its more reasonable price. Although it is hard to pay money for a not started job, it can offer advantageous prices, more control over design, and a wider variety of locations. In addition, Spain has a law that protects buyers from fraud and disasters.
First, let’s start with what does off-plan property mean. The off-plan properties are called properties that are in the design or planning stage. In short, the off-plan property meaning is that the property’s construction phase is not started yet.
The bad incidents happened before mobilized the Spanish government to enact laws of Spanish Law numbered 20/2015 and others on protecting real estate interim payments. These laws denote that bank guarantees or insurance policies are mandatory for securing payments in the interim stages. This guarantee is free of charge and must be done for all buyers.
What is Bank Guarantee for Buying Off-Plan Property in Spain?
The bank guarantee secures buyers' money if the construction company can not finish the project on time or not at all, or if they file bankruptcy.
As an off-plan property purchase tradition, reservation payment is a must to withdraw the property from the market. In addition to this, most of the construction companies start installments of the remaining amount in the construction or earlier phases.
So in total, the amount of paid money can be big and give big harm if not can be recovered in disaster scenarios.
The guarantee ensures the money’s safety in such situations. If the construction company files for bankruptcy, the bank guarantee secures the buyer's all-stage payments. Or, if the construction is not finished at all or not in the given time, all payments are secured.
With this guarantee, all stage or interim payments with paid VAT on these amounts, and the initial holding deposit which is paid to the real estate agency or construction company, generally starting from 6.000 Euros, are all included. Also, buyers are entitled to legal interest on the deposited and secured amount.
These guarantees are also very important for having a secure investment in social emergency situations such as the past covid pandemic, which caused a global economic crisis.
While buying an off-plan property for sale in Spain, it is strongly advised to work with professional agencies. Spain Homes ® offers modern services including investment security solutions against the Pitfalls of Buying Property in Spain with experienced local real estate lawyers and agents.
Advantages of Off-Plan Property in Spain
There are various advantages of off-plan property purchase. These are listed below.
1. Cheaper Prices
Off-plan properties in Spain are way cheaper than finished properties or resales. The off-plan properties will be nearly %15-20 cheaper than the existing properties.
2. Investment Opportunity
The value of the property will increase while getting closer to the finish. So, you may have profit at good rates while only waiting until the construction is complete.
3. Better Payment Plans
While buying off-plan properties in Spain, paying a down payment from 30% to 40% in installments is considered normal. The remaining value will be paid at the completion of the property, before the notary. With this, everybody can find a payment plan suitable for themselves. Off-plan property for sale in Spain offers better payment plans than most European countries.
4. Security of the Property
If you are buying a property from a construction company in Spain, the seller company must guarantee the important parts of the construction against structural defects are going to be secure at least for ten years. This system is called “Seguro Decenal”. So, buyers will be more comfortable with these possible problems.
5. Choosing the Right Property for You with More Design Options
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In the resale property market, buyers can only choose between the existing properties, which are already located in one place and designed by the former owners or construction companies.
Most construction companies allow off-plan property buyers to add their desired design to their property at price or for free. The most common design change is an option for choosing between a separate and open-plan kitchen.
Also, today’s construction rules are more likely to insist on sustainable and eco-friendly designs. It also gives an advantage to buyers that their next home will be more money-saving on energy consumption.
As owning a new house can bring a little more expenses, you may also take a look at our blog Costs to Maintain a House for more details.
Spain is a beautiful country with numerous things to discover. In addition to this beauty, it is a wonderful place to invest in. As Spain Homes ®, we offer the best services to buy your next house under the sun, in the easiest way. Contact us now to get your dream property.
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