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Foreigners buying property on the Costa del Sol has become very popular. The country has a pleasant, healthy climate and in recent years the local authorities have made great efforts to increase the number foreign tourists and residents. Spain now derives more of it's foreign income from tourists than any other country in Europe. Due to low European interest rates, now is a good time to buy pr operty in Spain. There is a very wide selection of standards, from farmhouses (fincas) and plots through to villas, townhouses and new apartment developments. There is no shortage of real estate agents in Spain and it pays to search out a good company who will care for your requirements. Before you buy a property in Spain you should use our website to look at the different areas then consider visiting your favourites before deciding where to buy. Many people also rent a property in that area first.
Here's a simple guide to get the most out of buying a property in Spain:
- Set your budget limit and stick to it.
- Visit the property at least twice before you make a decision.
- Check what amenities the property has such as electricity, water, gas.
- Have a builder or architect examine the structure of the building
- Talk to your prospective neighbours about the area.
- If you are unsure about a property, take photos and draw sketches to take home with you.
- Have your legal advisor check ownership of the property before you sign anything.
- Have your legal advisor check outstanding debts on the property before you sign anything
Initial Costs
As well as the cost of the property, the buyer will be liable for transfer tax (IVA), which at present is 6% on a second-hand property and 7% on a new one, plus 1/2% stamp duty. The property registration office will charge you a fee to change the new deeds into your name. This is usually around 300€. There will also be notary charges for copies of the 'escritura publica'. The charge is on a scale depending on the contract price. In total you should allow 10% of the purchase price for costs. It is often the case that the buyer also pays the sellers fees. Check this at the point of enquiry and it is often possible to negotiate. Banks may also charge an opening commission for mortgage loans.
Annual Costs
The local town hall charge IBI which is an annual real estate tax. The previous owner is obliged to give you copies of previous bills. Community charges apply when you buy a property on a community development. These cover things like maintenance, swimming pools, gardens etc. You will also be liable for a wealth tax, payable annually and based on the value of the property and a property owners income tax based on your income from the property. You should clarify these in detail with your estate agent at point of enquiry.
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