Buying a New-Build Property in the Valencian Community: Legal Checklist

Buying a new-build property in the Valencian region can be an excellent investment – but it comes with specific legal requirements that must be carefully reviewed.

1. Land ownership and registry check

First, make sure the developer owns the land or has a legally registered right to build on it. This should be verified with a recent extract from the Spanish Land Registry (nota simple).

The land should also be free of mortgages, liens, usufructs, or other encumbrances.

2. Building licence and planning compliance

The developer must hold a valid major works licence (licencia de obras) granted by the town hall, which must match the project being offered. The licence must comply with local urban planning regulations.

Without it, the building could be considered illegal and subject to demolition.

3. Guarantee of advance payments

According to Law 20/2015 and the Spanish Building Act (LOE), all amounts paid before completion must be guaranteed by a bank or insurance company.

Funds must be deposited into a special account, separate from the developer’s general accounts.

Any reservation or purchase agreement must include the guarantee reference and insurer/bank details. Lack of such guarantees is a major red flag.

4. 10-Year Building Defects Insurance

Spanish law requires a 10-year insurance policy covering structural damage (foundation, structure, etc.). This is mandatory and required by banks for mortgage approval.

5. First Occupancy Licence

Once construction is completed, the local authority must issue a first occupancy licence (licencia de primera ocupación). Without it, permanent utilities (water, electricity) cannot be connected, and the property cannot be legally occupied or sold.

6. Taxes and notary costs

The buyer must pay 10% VAT and Stamp Duty (AJD). In the Valencian region, AJD is typically 1.5%, unless reduced rates apply.

The purchase must be formalised before a notary and registered at the Land Registry.

7. Independent legal advice

An independent lawyer should always review the contract. It must include:

• Full details of developer and project
• Technical specs of the property
• Price and payment schedule
• Guarantees and insurance
• Delivery date
• Penalties for delay