Buying Off-Plan in Spain: How Your Deposit Is Protected

As new-build specialists on the Costa del Sol, we see many buyers purchase off-plan. In practice, that means paying a reservation fee and then a series of stage payments to the developer before your keys exist. It is a well-established way to buy, often at launch prices and with a choice of unit, but it is natural to ask what happens to that money if the project stalls.

Spanish law has a clear answer. And three Supreme Court rulings in 2026 have added useful detail, including one won by a British buyer.

What Spanish law requires of developers

Since 1 January 2016, the rules have been in the first additional provision of Spain’s Building Act, the Ley 38/1999 de Ordenación de la Edificación, as amended by Law 20/2015. They replaced the older Law 57/1968, which still governs many contracts signed before 2016.

According to the Banco de España’s guide for bank customers, the key points are:

Once the building licence is granted, the developer must guarantee every payment you make in advance, through either an insurance policy that names you as beneficiary or a bank guarantee (aval).
The guarantee covers everything you have paid, including taxes, plus statutory interest from the date of each payment to the agreed delivery date.
Payments should go into a special account linked to the development.
The guarantee stays in force until the first-occupation licence (or equivalent) is issued and the home is handed over to you.

How a claim works

If building work doesn’t start, or the home isn’t finished by the agreed date, you can cancel the contract and ask the developer for your money back. If the developer hasn’t repaid you within 30 days, you can claim directly from the insurer or bank that issued the guarantee.

One deadline matters a great deal. The Banco de España notes that the guarantee lapses if two years pass after the developer’s breach without you having asked to cancel and be repaid. If a delivery date slips, keep that two-year window in mind and take legal advice early rather than late.

What the Supreme Court said in 2026

Three rulings this year show how the courts apply these rules, especially when a bank received the buyer’s money but never issued a guarantee itself.

A British buyer recovers over €160,000. In ruling 443/2026 of 23 March, the Supreme Court held Banco Santander liable for money a British buyer paid in 2005 towards a development that was never built. The bank argued that he was an investor rather than a home buyer. The court found no real evidence of that and confirmed the bank’s duty to control the advance payments it received.

Payment details decide cases. As Moncloa.com reports, in the Santander case the transfer receipt named the buyer, the development and the apartment number. That was enough for the bank to know the money was an off-plan deposit. In two other rulings (586/2026 involving Cajamar and 738/2026 involving CaixaBank), buyers lost against the bank. Their deposits carried no identifying details, or arrived as one combined cheque from intermediaries, so the bank couldn’t reasonably have linked them to individual home purchases.

Holiday homes count, speculation doesn’t. In ruling 722/2026 of 11 May, the court confirmed that the protection covers a main home, a second home or a holiday home. Purchases made purely to invest or resell can fall outside it. Warning signs included owning other properties, contracts that let buyers sell on their position, and no explanation of what the homes were for.

These cases concern contracts signed under the old 1968 law. As Alicante Plaza points out, the current regime differs in some respects (for example, the obligation is tied to the building licence), so the rulings aren’t a template for every modern case. The practical lessons still apply, though.

A checklist before you pay a deposit

Ask for the guarantee in writing. For each stage payment you should receive an individual insurance or bank guarantee certificate in your name, covering the full amount including VAT.
Check who is guaranteeing you. It should be a Spanish-authorised bank or insurer, and your lawyer can confirm the document is genuine.
Pay into the account named in the contract. Use the special account for the development, never a personal or third-party account.
Reference every transfer clearly. Include your name, the development and the unit number. The 2026 rulings show how much this detail can matter.
Avoid pooled payments. Don’t pay through intermediaries who combine several buyers’ money into one transfer.
Keep records. Keep contracts, receipts, guarantee certificates and any correspondence with the bank.
Note the delivery date. Know the agreed delivery date and what the contract says about delays, and remember the two-year window.
Use your own independent lawyer. They should check the building licence and the guarantees before you sign.

If you’re also weighing up tax, timelines and running costs, our guide to buying in Spain walks through the whole process. You can browse current off-plan and new-build homes on our new developments page.

Buying off-plan with confidence

Off-plan buying on the Costa del Sol is well regulated, and a properly guaranteed deposit is protected by law. The buyers who come unstuck are usually those whose payments can’t be traced or whose guarantees were never checked. A Mosaic advisor can talk you through how payments are structured on any development we show you, or you can download our free 2026 Buyers Guide for a step-by-step overview.

This article is general information, not legal advice. Always take advice from an independent Spanish lawyer before signing or paying.

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