Guide to Buying Property on the Costa del Sol, Spain

The Buying Process in Spain is no more or less complicated or problematic than in the UK. However don't lose your head in the sunshine, be just as vigilant as you would back home and ask an English-speaking lawyer, preferably based in Spain, to run the usual checks on contracts, licences, unpaid taxes on the property etc on your behalf.

Once you've settled on the property that's right for you the first step is to take it off the market by placing a non-refundable reservation fee of around 3,000 - 6,000 euros (£2,000 - £4,000) dependant upon the value of the property. These monies are generally held with a lawyer and give you around 30 days' grace to organize the financing of stage payments for a new build or the balance due for a resale, arranging a mortgage if necessary. On the day of completion you will be required to sign private purchase contract, in the presence of a notary (a Spanish public official required by law to witness the signing), and all documentation will be sent off to the Land Registry who will officially record you as the legal owner in the Title Deeds. The home is yours.

There are several additional costs to be aware of and you should allow up to 10% of the purchase price to cover these. Although changes of legislation may affect the exact percentage rates, the below serves as a rough guide:

7% transfer tax (ITP) (resales, payable upon completion)
7% IVA (VAT) (off-plan/new build, payable with each instalment)
16% IVA (VAT) (land purchases only)
1% Stamp Duty (AJD) (only applies to off-plan/new build, payable upon completion)
1 1.5% legal fees
Notary fees (on a scale fixed by law, expect between 300 - 1,200 euros)
Land registry fees (approx. 20% less than notary fees)
Buildings / contents insurance

If you need a mortgage, additional costs include:

Valuation fees
1% mortgage arrangement fee

Two essentials when buying in Spain are firstly a Spanish bank account, simple to open but necessary for paying for firstly the property, then utility bills, community fees, IBI (Council Tax) and so on. Secondly, a NIE (similar to a UK National Insurance number) must be obtained prior to purchase - this is straightforward but can be time-consuming so don't leave it until the last moment.

Duchy Estates is on hand to advise and support throughout the entire buying process.

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