How to buy a property on the Costa del Sol
Home to beautiful beaches, Mediterranean old towns, five-star resorts, incredible restaurants and sea-front chiringuitos, it’s no surprise the Costa del Sol is a popular choice for both expats and international buyers.
The property market has soared over recent years and Marbella has become one of the most sought-after locations for buying real estate in Europe, with the up-and-coming Estepona following in its footsteps.
If you have decided to buy a property, it’s important to understand the procedure here. The process is relatively straightforward with the right agent and lawyer by your side.
This guide will take you through the buying process on Spain’s Costa del Sol and tell you everything you need to know from the initial property search to becoming a homeowner and thereafter.
FIRST STEPS
- The first stage of the process is for the buyer to do their research and decide on setting their budget (if a mortgage is required, it’s important to visit a mortgage advisor first to get a better understanding of how much they would be willing to offer you), pin point your desired area and prepare a must-have list. Bear in mind, no property is ever going to be absolutely perfect but a ‘non-negotiable’ list will help both you and the agent find a property that ticks most of the boxes.
- As with most things now, the internet is the most popular tool for those searching to buy properties. While this is incredibly useful, you don’t want to be contacting multiple agents about properties you’ve seen on different sites, as this is when the process can become confusing.
- What we recommend is choosing a qualified, trustworthy agency first with a large inventory of properties on the Coast and good contacts in the community. Established agencies in Spain are part of networks that share properties between them and as a multiple-listings agent, Alegra Estates has access to thousands of properties along the Coast to give you maximum choice.
If you find properties you like online, send it to your one trusted agent who can then search for properties matching your criteria and arrange viewings for you. This method allows us to really understand what you’re looking for and makes your experience that much simpler.
NEXT STEPS
- As well as a good agent, a good lawyer is just as important. We recommend buyers finding a qualified solicitor in Spain to represent them throughout the buying process and anything that comes after. Once you have made the decision to purchase property in Spain, having your lawyer get the basics into place strengthens your position as a buyer. This includes getting an NIE number (a number issued to foreigners in Spain) and a Spanish bank account opened. Good property moves fast here, so having this in place saves the buyer any potential delays.
If you’re new to the area, we have a great network of trustworthy lawyers who we have been using for years, both on a business and personal basis, and will be happy to make introductions.
THE RESERVATION CONTRACT
Once you have found your property, the first step of the buying process is the Reservation Contract, drawn up by your agent or lawyer. This is used in Spain to represent the buyers’ offer and proposed terms of purchase.
This is presented to the vendor to sign and return if they agree to the terms. If agreed, a 6.000€ deposit secures the property and it is taken off the market for a period of time while all the necessary legal checks and due diligence are completed by your lawyer.
Once your lawyer has completed a thorough check on the desired property, they will provide you with a detailed report. If anything is wrong, the 6.000€ deposit is refundable to the buyer. If everything is in good order, the next step is the signing of a Private Purchase Contract (PPC) and reservation payment which is 10% of the total sales price minus the reservation fee.
PRIVATE PURCHASE CONTRACT
This contract prepared by your lawyer is between the consumer and vendor, detailing the terms and conditions of the purchase.
The PPC includes:
- Details of the agreements reached between the two parties
- The terms and conditions of the sale
- The exact details of the property and its features
- A proposed completion date.
Once this is signed, a date will be set at the Notary for completion of sale and the handover of keys. Bear in mind, if you are a foreign buyer you will need to be present or you can give your lawyer power of attorney if you are not in the country, allowing him/her to act on your behalf.
THE COSTS OF BUYING A PROPERTY
The costs of buying a property vary from 10% to 14% depending on multiple factors.
RESALE PROPERTIES
If you’re buying a resale property, the tax rate has a fee of 7% (until the end of 2022).
NEW BUILD AND OFF PLAN
New developments have a 10% new build tax on top of the price of the property.
EXTRA FEES
On top of the purchase tax, the buyer needs to take into account the following:
- Stamp duty charged at 1.5%
- Lawyers’ fees charged at 1% of the purchase price
- Notary fees and other expenses varying from 1% to 1.5%.
DIFFERENT WAYS OF PURCHASING
If you are paying in cash, the buying process can move quickly and gives the buyer more room to negotiate with the vendor.
If you are arranging a mortgage here in Spain, you will have to account for additional set up costs and fees. We have excellent contacts with banks, mortgage advisors and currency exchange companies in the area that we can introduce you to for any help.
WHAT COMES AFTER
So you’re now a homeowner, congratulations! Part of our goal at Alegra is to not only find your dream home and guide you through the sales process, but be there for you afterwards.
As a family who have been here for 16 years and gone through the process multiple times, we have a great network of trusted partners to ensure our buyers receive the best care. Anything from legal and fiscal services, construction and reforms to interior design and property management, we’re here to help.
