Off-Plan in Spain: Law 57/1968 Is Dead, This Is What Protects Your Deposit

Somebody has sent you a reservation form for an off-plan apartment on the Costa Blanca, and somewhere in it, or on the developer's website, or in the agent's email, there is a line about Law 57/1968 protecting your deposit. It reads reassuring. It is also citing a law that does not exist any more.

Law 57/1968 was repealed with effect from the 1st of January 2016. Open it in the BOE, the official state gazette, and the first thing you see is a note saying repealed provision. If the paper in front of you still names that law as your protection, the paper is ten years behind.

My name is Daniel Bertomeu and I work alongside my father Juan Bertomeu, a lawyer practising here since 1991 (ICALI #4643), with offices in Moraira and Dénia. We are independent lawyers and tax advisors, which means we act for the buyer, not for the developer and not for the agent.

There is real protection for off-plan money in Spain, and it does not come from the law everybody keeps naming. Once the developer holds the building licence and the guarantee has been issued in your name, the return of what you pay is a legal duty on the developer. Before the licence there may be no policy and no guarantee issued yet, and where nothing has been issued there is nothing to claim against.

So is my off-plan deposit protected in Spain, or not?

It is protected once the developer holds the building licence and the guarantee has been issued in your name, and from that point it is a legal duty sitting on the developer, not a courtesy you negotiate. Before the licence there may be no policy and no bank guarantee issued yet, and where none has been issued there is nothing to claim against. The regime in force is the first additional provision of Law 38/1999, the Building Regulation Act, in the wording that took effect on the 1st of January 2016. The developer has to guarantee the return of the amounts you hand over, including the taxes applied to them, plus legal interest, for the case where the building never starts or never reaches completion within the agreed period.

The guarantee takes one of two shapes. Either a surety insurance policy, or a joint bank guarantee issued by a credit institution. And there is a second duty that gets forgotten because it is less dramatic than the first one: the money you pay has to be received into a special separate account, not into the developer's ordinary current account.

So two duties. Guarantee the money, and keep the money apart. If either of those is missing from the paperwork somebody has put in front of you, that is not a paperwork problem you can tidy up later. That is the deal telling you something.

And the rule in force is wider than the old one. It covers homes of every kind, including the ones bought through a cooperative, so if somebody tells you your arrangement is a special structure sitting outside all this, that claim deserves a very close look.

What actually happened to Law 57/1968

It was repealed with effect from the 1st of January 2016, and the route matters, because the shorthand version you will see is also wrong. It was not repealed by Law 20/2015 directly. It was repealed by the third repealing provision of the Building Regulation Act, and that provision was itself inserted into the act by Law 20/2015. Same destination, different road.

Now the part that matters if you bought years ago rather than this year. A repeal like this one works forwards. Spanish law does not reach back and rewrite what was already signed unless it says so expressly, and here it does not.

So a contract signed before the 1st of January 2016 stays under the old law. Which means the opposite extreme, the one that says Law 57/1968 is dead so forget it, is not right either. If you paid a developer in 2007 and you are still untangling it, the 1968 law is your law. If you are signing this year, it is not, and a contract that still cites it as your protection was drafted from a template nobody has reviewed.

One caution on that. The fact that the applicable law is the 1968 one does not mean the action is still alive. Limitation periods run on their own, and they depend on the date of the breach and on what was done afterwards. That is something to look at in the actual file, not in an article.

The 6 percent that no longer exists

That number is gone. It disappeared with the law that fixed it. The 1968 law set the interest at six percent. The rule in force today does not give you a fixed percentage at all. It gives you the legal rate of interest, which is set by the state budget law and can change from one year to the next, and which carries over unchanged when no new budget is approved.

So if a brochure promises your deposit back plus six percent, it is quoting a rate that no longer exists. What the law gives you is the amounts you paid, the taxes on them, and legal interest. A fixed percentage quoted without saying which year it belongs to is not a right you can hold anybody to.

When does the developer's duty to guarantee actually start?

From the moment the developer obtains the building licence. Those are the words in the rule, and they attach to one duty only: the duty to have the guarantee in place.

The second duty, receiving your money into a special separate account, does not carry that timing wording in the text at all. So do not read the licence date as the moment the developer's ordinary account stops being the wrong destination for your transfer. It was always the wrong destination.

And the money paid before the licence exists?

Well, honestly, I am not going to hand you a clean answer, because I cannot trace one. The text anchors the duty to guarantee to the licence, and it does not go on to say what happens to money handed over before that point.

What I will not do is tell you that a euro paid before the licence is legally lost. If you read that, decided not to claim, and it turned out you did have an action, that sentence would have cost you the money. That is advice against the client.

What we do instead is simpler than the legal argument. No client of ours transfers anything until we have seen the licence, the guarantee document naming that client and that amount, and the account the transfer is going into. If a developer wants your money before those three exist, the question is not whether the law would eventually rescue you. The question is why the hurry.

The trap nobody prices in: a bank guarantee can expire

This is the one that catches people, and it is written into the rule itself. Two years passing without the buyer having formally demanded the rescission of the contract and the return of the advanced amounts causes the bank guarantee to lapse. What lapses is the guarantee, the piece of paper that made the obligation worth collecting, and losing it is not a technicality.

And notice the asymmetry, because it decides which document you actually want in your file. That two year lapse is written for the bank guarantee, not for the surety insurance policy. That does not mean a policy gives you unlimited time: an insurance contract runs on its own deadlines. With either instrument the answer is the same, demand early and in writing.

This is why we diarise off-plan files rather than filing them and waiting for good news. Being slow here does not earn you a telling off. It changes who you are claiming against: on one side of that line you claim from a bank, on the other from a company that may have nothing left in it.

How you actually claim, and the step people skip

You cannot walk into the bank the morning after a completion date slips. There is a step before that: a formal demand on the developer to rescind the contract and return the money, and then a period of thirty days. Only where a prior claim is genuinely not possible does the direct route against the guarantor open.

I mention it because it is the way we most often see a strong position get quietly weaker. The buyer emails the developer, the developer answers slowly and then stops answering, months go by, and nobody ever sent the formal demand that starts the clock in the buyer's favour.

The demand has to be one you can prove: a burofax with acknowledgement of receipt, or a notarial requirement. An email chain may not do it, and a claim is not the place where you want to find that out.

What we read in an off-plan contract before you pay anything

Whatever the brochure says, these are the points we will not let a client pay against.

• Does the building licence exist, and can we see it.
• Does the guarantee document name you personally and the exact amount you are about to send.
• Is it a surety insurance policy or a bank guarantee, because the two year lapse is written for one of them and not the other.
• Is there a separate special account, and does the account number on your transfer instruction actually match it.
• Does each staged payment get its own guarantee document, or was one issued at the start and never updated.
• Does the guarantee cover the taxes on your payments as well as the payments themselves.
• Is there a real completion date, expressed as a date. The whole protection hangs on the works not reaching completion within the agreed period, and a contract with no agreed period is a contract with a soft trigger.

If you want to run through the wider purchase yourself before you speak to anybody, we built a property purchase checklist you can go through in about five minutes. It will not replace the reading above, but it stops you arriving at a signing with the obvious things still open.

Do not confuse this with the guarantees on the building itself

They are different things, and mixing them up is how people end up thinking they are covered when they are not. Everything above protects your money in the window between paying and owning. The same act separately sets out guarantees for defects in the construction, and those run after handover, when you already own the place.

Different problem, different clock, different claim. A guarantee on the finished building does nothing for you if the development never gets finished, and that is the risk you are carrying while your money sits with a developer.

The tax side of an off-plan purchase

An off-plan home is a new build, so you are not in the transfer tax world at all. You pay VAT at 10 percent on the home, and stamp duty on top, which in the Comunitat Valenciana is 1.4 percent for deeds from the 1st of June 2026. The 10 percent covers the home and up to two garage spaces and annexes, provided they are transferred together with it. A third space, or a garage or storage room bought separately, goes at 21 percent, which is the line people meet at the notary rather than in the brochure.

And those taxes on your staged payments are inside what the guarantee covers.

If you want the whole cost of a purchase worked through end to end, we did it on a 500,000 euro example. The annual taxes once you own the place live over at easy210spain.com.

What this looks like on this coast

Off-plan on the Costa Blanca is not one market. A large coastal development and a four unit block on a plot somebody bought two years ago carry very different risk. What does not change is the order of the checks: licence, guarantee, account, dates.

If it helps to see the whole purchase in sequence rather than this one slice of it, the full route for a foreign buyer is set out in our guide to buying property in Spain as a non-resident, and the way we run a purchase for a client is on our conveyancing page. If you are looking at one particular town, the detail that only matters there sits on our local sites for Moraira, Dénia and Jávea.

How we work

We are in Moraira and Dénia, and most of our clients are not in Spain when they need us, which is normal here and not a problem. Off-plan work starts with reading the developer's contract before anybody signs it, which is the cheapest moment to find the thing that would have hurt. Our conveyancing fees start at 1,600 euros plus VAT. And if the honest answer after reading a contract is that we would not sign it, we say that.

Juan is the lawyer on the file, ICALI #4643, practising here since 1991. I handle the tax side as a tax adviser registered with AEDAF, #06838.

A quick legal note before you go

One last thing, and Juan makes me say it, because this is a law firm and a law firm has to say it. This article is general information, current as of July 2026. It is not legal advice on your specific purchase, and reading it does not make you our client.

Your contract, your developer, the date you signed and the stage the works are at all change the answer. So before you transfer anything, get somebody who acts for you to read the actual paperwork.

Sources

Legal sections written and signed off by Juan Bertomeu, lawyer, ICALI #4643. Tax section by Daniel Bertomeu, tax adviser, AEDAF #06838. Last updated July 2026.