In this entry, you will find all information about buying a property at the Costa del Sol. Step by step, we explain to you the purchase process, including the associated costs and taxes in the Comunidad Andalucía.
Important: this article refers only to the Costa del Sol and does not cover the Costa Blanca (Comunidad Valenciana) or the Costa Calida (Comunidad Murcia).
Legal control of the property
After you have found a property through an estate agent, the property you have chosen should be legally screened. It is customary in the Costa del Sol to sign a reservation contract first. With a reservation contract, you usually make a down payment of 3000 - 6000 euros. After that, you can start the legal investigations.
Confianz will investigate the legal, urban planning, fiscal and financial situation of the property and inform you through a report. After all, it is possible that building violations have been identified or that the seller is not the official owners. In the worst case, the property may be subject to a demolition order. In addition, we advise you on the possible terms of the transaction.
If it is a sale on plan, we also check whether the building promoter has the necessary permits and - importantly - has taken out a valid bank guarantee.
After receiving a report on the property and knowing the condition of the property, you can proceed to sign the compromise. After signing the compromise, you will pay between 10% - 30% of the purchase price, less the amount of the first deposit. If it is a sale on plan, you will also pay the VAT amount additionally.
Before going to the notary, you will need an NIE number. This is a tax identification number for non-residents in Spain. Here you can read how to obtain a NIE number. Of course, we will assist you with the application.
Spanish bank account
You will also need a Spanish bank account. After all, you need to make your final payment from the Spanish bank account. In addition, a Spanish bank account is useful to pay local taxes and fees (via direct debit or otherwise).
To comply with Spanish anti-money laundering legislation, it is mandatory that you prove the origin of your funds. You can prove a legitimate origin through contracts, tax returns, bank certificates, notarial deeds, etc.
To the notary
The next step is to sign the notarial deed before the Spanish notary. At this stage, you will have paid the full amount (+ 10% VAT if new build or on plan) and become the owner of the property.
Tip: before going to the notary, you still have the opportunity to check the property for visible defects.
There are also a number of further checks before signing. In the case of a new home or in the case of a purchase on plan, Confianz checks whether the latest permits and conformity certificate have been issued. After all, you need the conformity certificate to connect your new home to the utilities.
If it is a resale, we make sure that there are no debts and/or costs left on the property. For example, think about local taxes, co-ownership debts, debts to water and electricity companies, etc.
Notarised power of attorney
If you do not wish to be present at the notary, you can choose to give a notarised power of attorney to Confianz. This allows us to represent you and handle the entire purchase transaction. You can also grant a notarised power of attorney in Belgium.
Paying transfer taxes
After you become the owner of the property, you still have to pay some taxes. In case of new construction or a purchase on plan, you will owe stamp duty of 1.2% on the purchase price. In case of a resale, you will pay registration duty of 7%.
Registering your property title
It is important after purchase that your title is registered with the Registration office. This will make your title enforceable against third parties and prevent the seller from selling the property twice. Confianz will assist you with this.
You also need to be registered in your urbanisation and with municipal services (such as waste collection). We also arrange connection to utilities.
Cost overview buying on the Costa del Sol
In summary, around 10-12% cost comes on top of the purchase price in case of resale. If you want a new-build property or buy on plan, you can expect around 12 - 14% on top of the purchase price. Note that this is cheaper than, say, a property on the Costa Blanca. In the Comunidad Valenciana, we are talking about at least 12% on the purchase price.
More information about buying on the Costa del Sol?
Then be sure to check out the Taxes and fees when buying a property in Andalucía.
You can, of course, have a request a non-binding consultation about investing in Spain.