Can I sell off-plan property in Spain before completion?
In many cases, yes. Selling your position in an off-plan property before completion, known as a contract assignment or subrogation, is possible but requires the developer's consent and must be properly documented. Tax implications apply.
- 1Selling before completion is legal in Spain but requires the developer's consent in most cases
- 2The process is called a contract assignment or subrogation
- 3Capital gains tax is payable on any profit made
- 4Developer assignment fees typically range from 1 to 3 percent of the sale price
- 5Your original lawyer should handle the documentation to protect your liability
Key Takeaways
- Developer consent is required in most cases before you can assign your contract
- An assignment fee is commonly charged by the developer
- Any profit from the assignment is subject to capital gains tax in Spain
- The assignment must be formally documented by a notary or in writing
- Not all developers permit assignment, so check your contract before planning this
Selling an off-plan property before completion is sometimes called assigning the contract or novating the purchase. It means transferring your buyer position to another person before the title deed is signed at the notary. This is legal in Spain but is not automatic. You generally need the developer's written consent, and many developers charge an assignment fee. The tax situation depends on whether a profit is made and on your residence status. This strategy is used by investors who want to realise a gain during the construction period rather than at completion, but it adds complexity and is not always straightforward.
What is a contract assignment?
A contract assignment means transferring your rights and obligations under the purchase contract to a new buyer. Rather than taking title yourself, you sell your position to someone else before the property is built and registered. The new buyer takes over your payments and collects the keys at completion. You receive the difference between what you paid in deposits and the price you agree with the new buyer.
Does the developer have to agree?
In most cases, yes. The private purchase contract will contain a clause setting out the conditions under which assignment is permitted. Many developers require their written consent and charge a fee, typically 1 to 3 percent of the sale price. Some contracts prohibit assignment entirely or restrict it to within a certain time window. Check your contract carefully before proceeding.
Tax on assignment profits
If you make a profit on the assignment, that profit is taxable. For Spanish residents, it is treated as a capital gain and taxed at rates between 19 and 28 percent depending on the amount. For non-residents, capital gains are taxed at a flat rate of 19 percent for EU and EEA citizens or 24 percent for others. There may also be a requirement to charge VAT on the assignment if it is treated as a business transaction. A tax adviser should review your specific situation.
How the process works in practice
Once you have found a buyer and obtained the developer's consent, the assignment is formalised in a written agreement, often a notarial document. The new buyer takes over your deposits paid to date plus any future payment obligations. Your liability under the original contract is extinguished. The developer updates their records and the new buyer proceeds to completion in your place.
When assignment is typically used
Investors who buy early in a development with the intention of selling before completion use this route to realise appreciation during the construction period. It is more common in rising markets. The risk is that if the market has not moved or has fallen, you may not find a buyer at a premium, and you are still bound by your contract obligations.
Why This Matters in Costa del Sol
Contract assignment is well understood in the Costa del Sol market. It is particularly active in new developments in Marbella, Estepona and Benahavis where demand is strong and construction periods are relatively long.
Common Mistakes to Avoid
A British investor buys an off-plan apartment in Marbella for 350,000 euros, paying 100,000 euros in deposits. By 18 months into the build, similar units are selling for 430,000 euros. The investor finds a buyer willing to pay 410,000 euros for the assignment. After paying the developer's 3 percent assignment fee of 12,300 euros and 19 percent tax on the 60,000 euro profit (11,400 euros), the net gain is approximately 36,300 euros.
Legal Note: The assignment must comply with the terms of the original private purchase contract. Using a Spanish property lawyer to handle the documentation protects you from liability after the assignment is complete.
Off-plan property refers to a residential or commercial property that is purchased before construction is complete. The buyer agrees to purchase based on architectural plans, CGIs, show apartments and a specification document rather than a completed building. Payment is typically made in stages tied to construction milestones.
The Private Purchase Contract (Contrato Privado de Compraventa or PPC) is the main legal agreement between a buyer and developer in an off-plan property transaction. It sets out all the terms of the sale including the purchase price, full payment schedule, completion date, property specification, bank guarantee obligations, penalties for delay, and dispute resolution. It is signed after the reservation stage and typically involves payment of 10% to 30% of the purchase price.
Completion in Spanish property buying refers to the final stage of the purchase process when the title deed (escritura publica) is signed at the Spanish notary. On completion day the buyer pays the outstanding balance of the purchase price, pays applicable taxes (VAT on new builds), signs the title deed in the presence of the notary, and receives the keys to the property. The title deed is then registered at the Land Registry.
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