The Benefits And Necessity Of Separate Purchase And Construction Transactions

When selling and developing new construction projects in the Dutch market, the form of contract is critical to the legal, fiscal and practical framework of the transaction. One increasingly popular approach, particularly in residential developments, is the so-called "separate purchase and construction" model. This way of contracting allows developers, contractors and buyers to organise the legal transfer of the land or apartment rights and the construction of the building(s) into two distinct transactions.

By legally and fiscally separating the land transfer from the construction agreement, opportunities arise for clearer risk allocation, potential tax optimisation and access to guarantee and warranty schemes. In this blog, we explain how the separate purchase and construction model works, the advantages it offers and the situations in which it is particularly suitable.