Our Costa del Sol Buyers Guide for both resale and new off-plan properties is a simple, must read document. It explains the basics of what is involved when purchasing.
One thing that prospective purchasers should understand is that we represent you and not the developers or the seller. We get paid by the developers or the seller, and you will be charged absolutely nothing by us for our services and assistance when buying. The simple reason that we bring this to your attention is that we are not tied to any one developer. or seller In fact we are not tied or in partnership with any of them. We will only show you properties which meet your requirements.
Our Buyers Guide includes everything you need to start your purchase of a new property on the Costa del Sol. Our team of professional property experts are committed to going above and beyond to ensure your search for a new home is as relaxed and straightforward as possible.
We believe it is important that you know what to expect when buying a property on the Costa del Sol. We have outlined the Buying Process so you’ll know what’s ahead of you, every step of the way.
Ultimately a Buyers Guide is a general oversight into purchasing a property. Other than the essentials described below, every purchase will be slightly different, based upon your personal situation, the location and the seller. Knowing that you have a great team assisting you, is probably one of the best pieces of reassurance we can offer.
Buyers Guide Steps
– Deciding what you want
Many people first get in touch with us, without really knowing what they want. They do not know where it should be or how they intend to use the property. Telling us that you want to spend less than ‘X amount of euros’ in a certain area is only the first step to understanding your requirements. We arrange conference calls in order to introduce ourselves and more importantly to get down to the ‘nitty-gritty’ of what you want.
- What are your expectations for the property?
- How often do you intend to use it?
- Can you really get away with just 2 bedrooms or would 3 be better?
- Do you want a property within a gated community with 24 hour security?
- Do you need to be able to walk to the beach or will you require public transport to be nearby?
We need answers to these questions and many more just in order to understand you expectations. Once we understand this, we can have a look at your budget and how you will pay for the property. Nowadays many families make cash purchases, even when buying an off-plan property. They pay a deposit followed by stage payments in some cases depending on whether the project is already in construction. Once the property build has been completed, they will then simply transfer the remaining money and complete on the property.
Many of the developers will offer finance options. Whilst some are worth considering, make sure that you get some independent numbers for a comparison.
So, you have told us what you want and how much you can afford, whats next?
You will receive some examples of suitable properties by email, and we will hopefully all be on the same page.
We arrange to meet you when you arrive here in Spain and schedule a number of viewings. This could be 2-3 per day or more if the properties are close to each other.
When a client knows what they want and we have understood your requirements correctly, you should be able to make a decision within a couple of days.
We ask that ALL clients have access to immediate funds – normally 6,000 euros in order to make a reservation.
– Lawyers – A buyers guide recommendation which is typically omitted.
Many people leave finding a lawyer until they actually require their services. This can leave you in the position of having to make a last minute decision. Inevitably this can lead to problems if you choose the wrong one.
Choose a lawyer who specialises in what you are purchasing.
If you are purchasing in the countryside retain a lawyer who is based inland.
If the property is on the coast, retain a lawyer from the coast.
Better still, retain a lawyer in the specific area of the Costa del Sol, where you are buying. They will have local knowledge which will be beneficial to you.
As a property owner, whether you become a permanent resident or not, you will need to make a will. This will cover all of your assets and possessions in Spain.
– Reservation Document
Once you find your perfect Costa del Sol property, and the price and conditions are agreed, the next step is be to secure it. We do this with a Reservation Document which will be signed by both parties and legally reserve the property for a set period of time. During this time your lawyer will conduct legal checks on the property.
At this point you, as the buyer, will pay a deposit. This is usually €6000 (non-refundable unless your lawyer should discover any legal restrictions relating to the property). The deposit will guarantee that the property is withdrawn from the market by the vendor. This is the point you may choose to arrange the mortgage, if necessary.
Outlined within the Reservation Document will be a time frame for completion. If the completion is within 30 days then the next step is usually to sign the deed by a public notary.
If the agreed completion will be later than 30 days the normal protocol will be to sign a Private Purchase Contract. You will also pay 10% of the price (minus the €6000 deposit already paid).
– Private Purchase Contract
The Private Purchase Contract is a legal document prepared by your lawyer, between the buyer and the vendor, it will outline:
- The legal declaration from the vendor/developer that that they are legally positioned to sell the property.
- The terms and conditions of the sale.
- The exact dimensions and features of the property, including address, dimensions and Spanish Official Property Registry Reference Number. Copies of building licenses and associated documentation if this is a new property. Final occupancy license will also be required in the case of new properties.
- Date of Final Completion and keys handover.
Approximately 3 to 4 weeks following the signing of the Private Purchase Contract, completion will take place at Notary. At this point the Title Deed of the property is signed (Escritura). You will pay the remaining balance of the purchase amount, plus any taxes and costs.
– Your finances
Once the private contract has been signed, you will know approximately how long you will have to raise the funds to complete on your new home. If you are a cash buyer, then simply sit back and wait. Should you be raising finance, now is the time when you should be preparing your personal paperwork and start talking to mortgage brokers and banks.
Most forms of finance will take several weeks to organise. Remember to get this step out of the way as soon as possible.
– Taxes payable by the buyer
- 10% VAT (IVA) on new properties.
- Transfer Tax on resale properties on a sliding scale of 8% – 10% depending on the price.
- 1.5% Stamp duty (only for new properties)
- 1% Lawyer’s legal fees
- 1% Notary and Land registry fees
- 1%-3% Average mortgage commissions to set-up finance with a Spanish bank
– Getting the keys to your new home
And the very last stage? Collect the keys to your new property and start enjoying your new dream home in the sun!
– Paperwork and Contracts
A good lawyer will typically take care of changing water, electric and ayuntamiento (town hall) bills in your name.
You will need to source your own cable / satellite TV provider and your internet service.
Final Buyers Guide Advice
Furnishing a property from scratch is something that first time second home buyers will never have done before. You will need to buy absolutely everything from furniture to furnishings, curtains, crockery, cutlery and light fittings. This all take time and probably much more than you think!
Delivery of sofas and dining room sets can often take several weeks from the point of purchase as they are made to order. Unless you are planning on buying everything from Ikea, you need to plan early. We work with specialist companies who completely outfit new properties down to the last teaspoon. We arrange for you to spend a couple of hours with them in order to make sure that you are happy with their product range and quality. You then place an order, pay a deposit and let them do everything else.
The total delivery time remains at several weeks. In most cases we recommend that clients make arrangements as soon as they have reserved a property.
Understanding Your Utilities
IBI Impuesto sobre Bienes Inmuebles)
IBI is the local property tax which every property must pay annually in Spain. Importantly IBI is calculated on the “cadastral value” of the real estate and not the sales value. As a very general rule of thumb, the cadastral value will typically be about 50% of the market value of the property.
This IBI value will then be multiplied by between, 0.4 to 1.3% to calculate the annual IBI tax payable by the owner annually. Some smaller municipalities may have an even lower % amount.
For example:
A property is purchased for €500,000 with a cadastral value of approximately €250,000
Best case 250,000 multiplied by 0,4% is €1,000
Worst case 250,000 multiplied by 1,3% is €3,250
Alcantarilla is the sewerage costs
Basura is the ubbish collection
Agua is your water use (if you have a private pool this will typically increase accordingly)
All three of these tend to be very low cost taxes and regardless of where you are should not come to more than €5-600 per year
Luz / Electricidad – Electricity in Spain is relatively inexpensive, but can depend on your location as well as your usage. On average a 2/3 bedroom townhome or apartment will be €80 to €125 euros per month with regular use of modern air-conditioning units. If you have a pool or other ‘luxury items’, the price will increase.
We hope that you have found our Buyers Guide helpful!
Discover the different Costa del Sol coastal areas
Discover the different inland areas of the Costa del Sol
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Off-Plan Properties in Spain by Area
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