How to buy a property on the Costa del Sol
19 May, 2021
Blog
Buyer's Guide
PROPERTY FOR SALE ON THE COSTA DEL SOL
How to buy a property on the Costa del Sol
You’ve found a property for sale in Mijas online and you’re thinking of visiting and putting in an offer. But do you know just what buying a property on the Costa del Sol involve?
Our 7-step guide to purchasing your dream property for sale on the Costa del Sol gives you an outline of the process. Follow these steps and it won’t be long before you’re enjoying your new home.
Location
You’ve seen a property in Mijas but visiting to check the location is imperative. Do you want to be in the mountain town, or would you prefer to be on the coast? Is an urbanisation a better option than an individual house? As with buying a house anywhere, think location, location, location.
Find one agent you trust
You don’t need to be dragged from villa to finca by multiple agents when one trustworthy agent will do. Experienced agents, like we at MK Estate, can access any houses for sale on the Costa del Sol either directly or through collaboration with other agents.
Don’t worry, they split the commission so there’s no extra cost for you.
Finance
If you need a mortgage, it’s advisable to do your research before you start looking. If you’re a Spanish resident, you can borrow up to 80% of the value, whilst non-residents can borrow up to 70% of the property’s value. This varies from bank to bank and may also depend on the property.
However, if you’re a non-EU resident and cash buyer looking to spend €500,000 or more, you could benefit from Spain’s Golden Visa programme.
Use a lawyer
Due diligence by a lawyer is always advisable when looking at property for sale. If you don’t already have a NIE (número de identificación extranjera), they can organise this for you. They will process the paperwork during the process.
The process
Once you decide to buy a property, you pay a small reservation fee to take it off the market. Your lawyer will check all the paperwork to ensure that it is in order.
- Your lawyer draws up a purchase contract detailing the terms and conditions of the sale – price, timescale to buy, costs each party pays, what’s included in the purchase (e.g. furniture and fittings) and so on. You and the vendor sign the contract, and you pay a deposit (usually 10% of the purchase price).
- On the agreed date for the purchase, you and the vendor meet at the designated notary office to sign the title deeds. You pay the outstanding amount and receive the keys.
- Your lawyer registers the title deeds. The property will then appear in your name in the Property Registry. They also pay the relevant taxes and fees.
Have a look at our Costa del Sol properties
Fees and Taxes
What do you pay when you find your dream property for sale? Costa del Sol has its own tax rates. On average, you will pay between 10 and 13% of the purchase price in taxes and fees.
Transfer tax
Known as Impuesto de Transmisiones Patrimoniales in Spanish (IPT) this tax is paid on resale properties on a sliding scale. On the Costa del Sol, the range is: from 8% on properties priced at €400,000 or less; 9% on properties priced between €400,000 and €700,000; and 10% on properties priced over €700,000.
Notary and Registry expenses
It is standard practice for the buyer to pay notary and registry costs. These vary depending on the price of the property and complexity of the title deeds, it is usually around 1.5% of the purchase price.
Legal fees
Lawyers on the Costa del Sol generally charge between 0.5 and 1% of the purchase price for their services.
Real estate agent fees
These are generally 5% but are usually factored into the selling price and therefore paid for by the vendor.
If it is a new property for Sale, Costa del Sol
IVA
Impuesto de Valor Añadido (IVA) is the Spanish equivalent to VAT. If you’re buying a new home on the Costa del Sol, you pay IVA instead of transfer tax. IVA is a flat rate of 10%.
Stamp duty
Actos Jurídicos Documentados (AJD) is a stamp duty tax which only applies to new properties and is paid in addition to IVA. On the Costa del Sol, stamp duty is 1.5% of the purchase price.
Insure and celebrate
Make sure you have insurance organised for the day you take possession of your new home. Then, with all the paperwork signed and the keys in your hands, it’s time to celebrate your new home in Spain.
Click here to find your Costa del Sol Property.
