Buying Off-Plan Property in Galicia: A Complete Guide for Foreign Buyers

What does buying off-plan mean?

Buying off-plan (known in Spain as comprar sobre plano) means purchasing a property that has not yet been built. The buyer signs a contract with the developer based on architectural plans, technical specifications, and 3D renders of the project. In Galicia, this approach has become increasingly popular, especially in areas like A Coruña, Vigo, Santiago de Compostela, and the Costa da Morte.

The main attraction is the price: off-plan properties are typically 15-30% cheaper than completed homes in the same area. Additionally, buyers can often customize finishes, layouts, and materials during the design phase.

Advantages of buying off-plan in Galicia

• Lower price: Developers offer lower prices in the initial phase to help finance construction. A 90m² apartment in Cee that would cost 180,000€ finished might be available off-plan for 130,000-150,000€.
• Customization: You can choose flooring, tiles, fixtures, interior layouts, and in some cases even modify the floor plan — something impossible with a completed property.
• Staggered payment schedule: You don't pay everything upfront. Payments are distributed throughout the construction period, making financial management easier.
• Brand new with warranties: Everything is new, built to the latest energy efficiency standards (Código Técnico de la Edificación), without the maintenance issues of older properties.
• Potential appreciation: If the market rises, your property could be worth more when completed than when you purchased it. In areas like Noia or Muxía, average appreciation over the last 3 years has been 8-12%.

Risks and how to protect yourself

Risk 1: Developer bankruptcy

This is the most widely feared risk. If the developer goes bankrupt before completing the building, you could lose your invested money. However, Spanish legislation provides protection through Ley 57/1968, which requires developers to guarantee all advance payments through bank guarantees or insurance policies. If the developer fails to deliver, the insurance returns your money plus legal interest.

Tip: Never hand over money to a developer who cannot show you the insurance policy or bank guarantee covering your payments. It is your right and your security.

Risk 2: Construction delays

Construction timelines can be extended due to weather problems (especially in Galicia, where winter rains are intense), supply chain delays, or bureaucratic issues. The contract should include a delivery deadline with penalties for delays.

Risk 3: Quality different from expected

Final quality may not exactly match what was promised. To avoid surprises, carefully review the contract and annexes specifying materials and finishes. If possible, visit other completed projects by the same developer.

Legal guarantees that protect you

Ley 57/1968 on advance payments

This law requires developers to guarantee all advance buyer payments through independent bank guarantees or insurance. The developer must provide the buyer with a copy of the guarantee document before receiving any payment. If the property is not delivered within the agreed timeframe, the buyer can demand the return of all payments plus the applicable legal interest.

Building Regulation Act (LOE, Ley 38/1999)

This law establishes the following warranties after property delivery:

• 1 year: Warranty for finishing defects (paint, flooring, carpentry).
• 3 years: Warranty for defects affecting habitability (dampness, cracks in partitions, installation problems).
• 10 years: Structural damage insurance covering defects in foundations, load-bearing walls, structure, and elements compromising building stability.

How to choose the right developer

Choosing a good developer is the most important decision when buying off-plan. Follow this checklist:

Payment schedule: typical stages

Off-plan property payments are structured in several phases:

1. Reservation (3,000-5,000€): When signing the reservation contract. This amount is usually refundable if financing is not obtained.
2. Arras or private contract (10-20%): When signing the arras contract. These are penalty deposits that allow either party to withdraw under specified conditions.
3. Construction installments (20-40%): As construction progresses: foundation, structure, envelope, installations. Each payment must be covered by the Ley 57/1968 guarantee.
4. Final payment before notary (40-60%): When signing the public deed of sale and receiving the keys. The mortgage is formalized at this point.

Tax differences: VAT vs ITP

New property purchases (off-plan) are subject to VAT at 10% (reduced rate for primary residences in Galicia), while second-hand properties are subject to ITP (Property Transfer Tax) at 8% in Galicia. Additionally, new properties require payment of IAJD (Stamp Duty) at 1.5% in Galicia for mortgaged primary residences.

Financing options

Galician and national banks offer financing for off-plan purchases. Typical conditions include:

• Off-plan mortgage: Banks finance up to 80% of the appraised value. Abanca, Caixabank, and Santander offer specific off-plan products with staggered disbursements.
• Fixed rates: In 2025, average fixed rates range from 2.5-3.5%. Variable rates at Euribor + 0.5-1.0%.

Case study: 150,000€ apartment in Cee

Let's look at a real example of an off-plan purchase on the Costa da Morte:

• Property: 85m² apartment, 3 bedrooms, 2 bathrooms, garage space, storage room
• Location: New development in Cee, 800m from the center and 2km from Santa María beach
• Off-plan price: 150,000€ (estimated completed value: 175,000-185,000€)

Cost breakdown:

Conclusion

Buying off-plan in Galicia is an excellent opportunity for foreign investors and residents seeking a new property at a competitive price. Spanish legal guarantees (Ley 57/1968 and LOE) provide solid protection, but choosing a financially sound developer and reviewing all documents with a specialized real estate lawyer is essential. With proper research and the right advice, you can secure your ideal home on the Costa da Morte or anywhere in Galicia with complete confidence.