Off-plan property in Tenerife – how to buy safely during construction

What buying off-plan actually means

Buying off-plan (Spanish: venta sobre plano) means signing a contract for a property that, at the time of purchase, exists only on paper – at the design stage, the building-permit stage, or the first groundworks. You pay in instalments as construction progresses, and you usually collect the keys after 12–36 months.

This is a purchase model our clients from Poland encounter more and more often – especially in the developing areas of southern Tenerife, where developers are launching new projects faster than the resale market can supply finished stock. For more on the differences between the two purchase paths, see our guide on the primary vs resale market in Tenerife. Here we focus purely on how to buy off-plan safely – step by step, with an emphasis on legal safeguards.

Why off-plan can pay off – and what risk it carries

Potential benefits:

• Lower entry price (precio de salida) at an early stage of construction – the earlier you sign, the wider the choice of units and usually the lower the price per m².
• Modern standard – better thermal insulation, new installations, lower electricity and air-conditioning bills than in an older building.
• The developer's building warranty, covering structural defects for several years after handover.
• Time to arrange financing – instalments spread over time make it easier to plan your budget, transfers from Poland, and any mortgage.

Real risks you need to address deliberately:

• Construction delays – the most common problem; the handover date can slip by several months, sometimes more than a year.
• Developer solvency – in the worst case, an unfinished project and lost payments if they were not secured.
• Differences between the plans and the finished product – the "turnkey" finish standard is sometimes lower than the renders suggest.
• Changes to the zoning plan – it is worth checking whether the area has a stable urban-planning status, rather than plans that could affect the view or surroundings of the development.

The bank guarantee on payments – the single most important safeguard

This is the point we raise with every client first, because your money's safety depends on it. Spanish law (Law 38/1999 on building, Ley de Ordenación de la Edificación, together with the rules protecting buyers of homes purchased sobre plano) requires the developer to secure the buyer's payments made before handover, through:

• a bank guarantee (aval bancario) – the bank guarantees the return of amounts paid if the project is not completed on time, or
• an insurance policy (seguro de caución) serving the same purpose.

In practice, this means every euro paid before signing the notarial deed should be covered by one of these safeguards from the very first instalment, not only from some later payment. We always ask the developer for a document confirming the specific guarantee or policy number assigned to your payment – a general assurance of "we're insured" is not enough. The absence of such a safeguard is one of the most common warning signs that leads us to advise against signing.

How to check a developer before signing the contract

Before you pay the first instalment, it is worth verifying several specific things – ideally with the help of a local lawyer who knows the Canary Islands market:

1. The company's history and completed projects. How many developments has the developer finished in Tenerife, on what timelines, and can clients see them in person today.
2. The building permit (licencia de obra) issued by the relevant ayuntamiento – construction should not begin at all without it.
3. The Nota Simple for the plot or development – we check that the land is free of encumbrances and that the developer is indeed its owner. We describe how to read this document in our guide to the Nota Simple.
4. The energy certificate and technical project – at the off-plan stage the developer should already have an approved project, not just renderings.
5. The company's financial standing – for larger developments it is worth asking for basic registry data on the developer's company.

The off-plan contract – what to check, point by point

A sobre plano sales contract differs from a standard contract for a finished property. It should precisely specify:

• A payment schedule tied to specific construction milestones (e.g. 20% on signing, further instalments at completion of the shell, the roof, the installations), not to calendar dates unrelated to the actual progress of the works.
• The key handover date and the consequences of missing it – a good contract includes a penalty for delays beyond an agreed margin (usually a few months' tolerance, then a penalty for each further month of delay).
• A precise description of the property – floor area, finish standard, materials, number of parking spaces and ancillary rooms, referencing the specific technical project rather than just the marketing brochure.
• The bank guarantee or policy number assigned to your payments (see above).
• A financing condition clause, if you are planning a mortgage – without it, a bank's refusal could mean losing the instalments already paid.

Before signing an off-plan contract, it is also worth reminding yourself of the difference between preliminary documents and the actual deposit – we cover it in our guide reservation agreement vs Contrato de Arras. With off-plan purchases the mechanism is similar, but spread across more payment stages.

Taxes and costs when buying off-plan

A property bought directly from a developer (obra nueva) is subject to different taxes than a resale purchase:

Cost	Off-plan property (from a developer)
Tax	IGIC (the Canary Islands' equivalent of VAT), usually 7% of the value
Additional fee	AJD (stamp duty on documented legal acts), approx. 1%
Notary and registry	depends on the deed's value, usually 0.5–1% combined
Lawyer	usually 1–1.5% of the property's value

By comparison, a resale purchase is subject to ITP (approx. 6.5% in the Canary Islands) instead of IGIC and AJD. You will find a full breakdown of all the costs of buying a property – including notary and registry fees – in our guide to taxes when buying property. Rates are updated from time to time, so we always verify them with a lawyer before signing.

How the process unfolds, step by step

1. Choosing a development and verifying the developer – company history, building permit, Nota Simple for the land.
2. Reservation agreement – takes the chosen unit off the market while the actual off-plan contract is being prepared.
3. Signing the sobre plano contract – with a payment schedule, handover date and bank guarantee number.
4. Instalment payments in line with construction progress – each one confirmed and covered by the guarantee.
5. Obtaining an NIE number, if you do not already have one – required to sign the notarial deed.
6. Technical handover (a pre-keys checklist) – checking that the finish matches the contract, and looking for defects and testing the installations.
7. The notarial deed and key handover – the final payment and the formal transfer of ownership. If you cannot be there in person, you can carry out the whole process through a notarial power of attorney.

Where in Tenerife it is worth considering an off-plan purchase

New developments today are concentrated mainly in the growing areas of the island's south, where there is still room for new construction and infrastructure. Before choosing a specific project, it is worth checking how the area performs in terms of rental potential – we write about that in our article on the locations with the highest ROI in Tenerife. A good off-plan location is usually one where finished complexes with an established rental track record already operate nearby – a sign that demand will hold up once the new development is completed.

Summary

Buying off-plan in Tenerife can be highly profitable – a lower entry price, a modern standard, and the potential for value growth during construction are all real advantages. Safety, however, depends on sticking consistently to a few rules: a bank guarantee or policy on every payment from the very first instalment, a vetted developer, a precise contract with a schedule tied to construction progress, and an independent lawyer on your side at every stage.

Thinking about buying a property under construction in Tenerife? Get in touch – we will show you current off-plan developments, verify the developer, and guide you safely through the whole process, from reservation to key handover.