Does the guarantee cover the tax I have already paid on each instalment, or only the base amount?

The law requires the guarantee to cover the full amount paid, including any tax paid on it at the time, not just the base price of the instalment. If a guarantee appears to cover only the base amount, without tax, it does not meet what the law requires. Raise this before you pay anything further.

Can I ask to see the guarantee before I sign the private purchase contract, rather than after?

You should. The law requires the developer to hand over the guarantee document when you sign the contract. But there is no reason your lawyer cannot review a draft, or a sample of the wording, in advance, as part of the legal check before that signature. Waiting to see it for the first time at the signing appointment is later than it needs to be.

Is a bank guarantee the same thing as insurance covering the same risk?

The law allows either option: a joint bank guarantee (aval bancario) or an insurance policy (seguro de caución), both achieving the same result. Both are acceptable if they are issued by an authorised entity, name you individually, and cover the full amount paid plus statutory interest. The label on the document matters less than whether it meets these four requirements.

What happens if the developer becomes insolvent rather than simply late?

A valid, individual guarantee does not depend on the developer’s own solvency. It is repaid by the bank or insurer regardless of what happens in an insolvency. Anything not covered by the guarantee becomes an ordinary claim in the queue behind other creditors. The full details of a developer insolvency are a separate subject, covered in their own page.

Guides

Bank Guarantees for New-Build Properties: What They Must Cover and How to Check Them

In 30 Seconds

Every payment you make to a Spanish developer before the building is finished must be covered by a bank guarantee or an insurance policy. This guarantee must be issued individually in your name, for the full amount including tax, plus statutory interest. If the document in front of you does not say this, it is not the guarantee the law requires.

Bank guarantee / surety insuranceGuarantee for advance payments, LOE disposición adicional primera

Beneficiario: NOMBRE APELLIDOS
Importe garantizado: XX.XXX € + IVA
Entidad emisora: Banco / Aseguradora X, autorizado
Interest: Statutory, from each payment
Fecha de entrega prevista: [ blank ]

Specimen. The values shown are illustrative.

Beneficiario. Must name you individually, not the development in general.
Importe garantizado. The full amount advanced, including any tax already paid on it.
Entidad emisora. Issued by an authorised bank or insurer, never the developer itself.
Interest. Statutory interest, running from the date of each payment to the scheduled delivery date.
Fecha de entrega prevista. The failure case: a guarantee with no stated delivery date cannot be checked against your contract’s completion date.

What is the developer legally required to give you?

A specific document, with specific content, given to you at a specific moment, not just a promise in the contract. It must be issued by an authorised bank or insurer, never by the developer itself. It must name you individually, for your specific payments, not a group policy covering the whole development. It must cover the full amount you have paid so far, including any tax already paid on it, plus statutory interest from the date of each payment to the planned delivery date. You receive it when you sign the private purchase contract, before any staged payments begin.A claim is triggered when construction does not start, or is not finished and delivered by the date in the contract. Ley 20/2015 strengthened this rule after the 2008 financial crisis showed how often the earlier 1968 rule (Ley 57/1968) was not enforced in practice.

Construction Defects After Completion

Sources

What does the guarantee protect against?

Two wrong assumptions go in opposite directions. One buyer assumes the guarantee covers less than it does. Another assumes it covers more.

What buyers assumeWhat the guarantee really covers

The guarantee only pays out if the developer goes bankrupt: It also pays out if the developer is simply late. If completion runs past the date written into your contract, the same guarantee lets you reclaim what you paid, with statutory interest, without waiting to find out whether the developer eventually finishes.
A guarantee mentioned in the brochure is the one that protects me: Only a document that names you individually and states your specific payment amounts really protects you. A general statement that "the development is bank-guaranteed" is marketing language, not a legal guarantee, until you hold the individual certificate in your hand.
Once I have the certificate, every payment I make afterwards is automatically covered: The certificate should be updated or reissued to show each new amount as you pay it. An outdated certificate that no longer matches what you have really paid is a gap. Catch it before the next payment, not after.
The reservation deposit is covered by this same system: It is not. You pay the reservation before any guarantee exists, so it sits completely outside this system. This is exactly why the reservation should be a small amount, and why the reservation contract needs its own clear refund clause.

What If Completion Is Delayed

What does "statutory interest" add to a refund?It is the legal interest rate applied to your money for the time it was held. It is calculated from the date you paid each instalment to the date the guarantee is used. It exists so that getting your money back after a failed project is not simply getting the same euros back, with nothing added for the time that passed. It is not a bonus payment. It compensates you for the delay, not for the disappointment.

How do you check a guarantee in five minutes?

Four things, checked on the document itself, not on what you were told about it. If any one of these is missing, raise it before the next payment leaves, not after.

The issuer’s name and authorisationA bank or insurer authorised to issue this kind of guarantee in Spain, not the developer’s own paper.
Your name and the exact amountThe certificate must be individualised to you and match what you have really paid so far, not a round or general figure.
The scheduled delivery dateIt must match the completion date in your purchase contract. A mismatch here is worth raising before you pay anything further.
Confirmation before each new staged paymentThe guarantee must be updated to cover the new amount before, not after, you send it. Being asked to pay first and "the paperwork will follow" is the sign to stop.

Where does the system fail in practice?

Not in the law itself. The law is specific, and it has been tested since 2015. The system fails when nobody checks the paperwork against what the law requires.

Treat as unprotectedThe certificate names the development, not youThis is the single most common gap. It is a document confirming that guarantees exist for the project in general, without your name and your specific payment amounts on it. It is not the individual certificate the law requires.
What to do insteadTreat it as missing until it is replaced with one that names you.
Treat as unprotectedA new instalment is being asked for before the certificate is updatedThat specific payment is, in practice, unprotected until the paperwork catches up.
What to do insteadConfirm the certificate covers a payment BEFORE sending it, not after.
Worth clarifyingThe payment guarantee is being confused with the structural warrantyThis guarantee protects your MONEY before completion. It is entirely separate from the 10-year structural, 3-year installations and 1-year finishes warranties that apply AFTER you own the property under the same law’s articles 17 and 18.
What to do insteadKeep the two risks separate. A failed project and a defect in a finished property have different remedies.

What If the Developer Goes Bankrupt

A verified guarantee against an assumed one

The law is identical either way. What differs is whether anyone checked that the document really says what the law requires.

	Unchecked Guarantee	Verified Guarantee
Who it names	Unknown until someone reads it. It could name the development in general.	You, individually, confirmed on the document itself.
What it covers	Assumed to match, based on what the developer said rather than what the document states.	Confirmed to match your actual payments to date, including tax.
If completion runs late	A dispute over whether the guarantee that exists really applies to your situation.	A clear, checked path to reclaiming every euro paid, with statutory interest.
Cost of getting this wrong	Potentially the full amount advanced, discovered only when it is needed.	The time spent checking a document before each payment.

To be frank

The law is strong. The paperwork still has to be checked

This is current Spanish law as of August 2026, read from the LOE's consolidated text as modified by Ley 20/2015. It is general information, not a review of the specific guarantee attached to a property you are considering. Whether a particular document really meets these requirements is a question for your own lawyer, reading that specific certificate, not for a page describing the law in general.The scope here is deliberately narrow: only the new-build payment guarantee. Three related subjects are covered in their own guides instead. The money-protection page maps both purchase routes, new build and resale properties, and shows where the money sits in each. The lawyer-client-account page covers the resale property mechanism in full depth. The construction-defects page covers the separate structural warranty that begins once you own the property. Your lawyer must check the guarantee's exact wording for your specific unit before any staged payment leaves. No amount of general reading replaces that step.

Frequently Asked Questions About Bank Guarantees

Does the guarantee cover the tax I have already paid on each instalment, or only the base amount?: The law requires the guarantee to cover the full amount paid, including any tax paid on it at the time, not just the base price of the instalment. If a guarantee appears to cover only the base amount, without tax, it does not meet what the law requires. Raise this before you pay anything further.
Can I ask to see the guarantee before I sign the private purchase contract, rather than after?: You should. The law requires the developer to hand over the guarantee document when you sign the contract. But there is no reason your lawyer cannot review a draft, or a sample of the wording, in advance, as part of the legal check before that signature. Waiting to see it for the first time at the signing appointment is later than it needs to be.
Is a bank guarantee the same thing as insurance covering the same risk?: The law allows either option: a joint bank guarantee (aval bancario) or an insurance policy (seguro de caución), both achieving the same result. Both are acceptable if they are issued by an authorised entity, name you individually, and cover the full amount paid plus statutory interest. The label on the document matters less than whether it meets these four requirements.
What happens if the developer becomes insolvent rather than simply late?: A valid, individual guarantee does not depend on the developer’s own solvency. It is repaid by the bank or insurer regardless of what happens in an insolvency. Anything not covered by the guarantee becomes an ordinary claim in the queue behind other creditors. The full details of a developer insolvency are a separate subject, covered in their own page.

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