First-Time Buyers: Essential Guide to Costa del Sol Property

Buying your first property on the Costa del Sol can be an exciting but complex process. This guide will walk you through the essential steps and considerations to ensure a smooth and successful purchase. Everything you need to know in one place.

1. Set up your Search criteria. Please think about it carefully, the more details - the better.

• Budget: please specify the price range, eg. 300K-500K
• Location: Marbella/Estepona/Fuengirola/Benalmadena/Mijas/Casares. Please select appropriate
• The purpose: For Private Use/Investment. Please select appropriate
• Type of property: Apartment/Townhouse/Villa. Please select appropriate
• The quantity of bedrooms: Studio/1/2/3/4/5/5+
• New construction or Resales market: If you are ready to wait and want new property - select New construction/If you want to move in straight away - select Resales
• Additional requirements, such as proximity to shops, schools etc: Very crucial, as for example some hillside properties will require you to drive to get anywhere

Once you have set up your search criteria, you can now start looking for the property you aim for. If there is nothing on the market that would suit your search criteria, think of in which areas you can be more flexible, for example you have a big family which needs 3 bedrooms but tight budget, then select additional areas such as Estepona or Casares. By doing so, you are expanding your search, thus the possibility of finding your desired property is higher. In the end of the day we all depend on what the market has to offer. 

Choose the Real Estate Agency you would like to work with, send them your search criteria and be open for offers. You can surely try to find it yourself on the well-known portals, but it will consume your time and energy. Let proffessionals help you in finding your home, the commission is anyway will be paid by the Seller, hence you are not losing anything, BUT acquiring here. The Real estate agents have access to properties that are not listed on the portals, have an expertise and collaborate with each other.  This will ensure your fastest route to your new home.

2. Once you found your desired property, start negotiations process. Offer less than the seller’s price. Remember that the Seller wants to sell and you want to buy, try to find the intermediate point.

3. Steps 1 & 2 might take time. In between viewings start preparing your documents:

• NIE: Foreign identification Number, which is required for property transactions in Spain. Apply at a Spanish consulate or a local police station in Spain. Your lawyer can assist with this process;
• Open Spanish Bank account. You can surely pay for the purchase of the property from the overseas account (*not all countries are eligible), but it would ease the process of payments. After the property will be transferred on your name you will have to have a Spanish bank account to pay for IBI (property tax), Basura (garbage tax), electricity, water and other bills;
• Prepare to prove your source of income. According to Spanish money laundering Law, you as a Buyer, have to justify your sources of income to buy property in Spain. This can be a combination or one of the following: salary, Inheritance, savings, business ownership, dividends, sale of assets etc. 
• Start looking for a mortgage, if you need it (described in step 8)

4. TAXes and additional expenses to buy property in Spain:

 The price of the property does not include Taxes and additional expenses. Let’s have a look in more details. 

• There are 2 applicable taxes to buying property in Spain:

VAT (Value-added Tax) is 10% applicable to new projects

OR

ITP (Property-transfer Tax) is 7% applicable to resales properties

• Stamp Duty. On the Costa Del Sol is 1,2%
• Legal fees. Hiring a lawyer is 1%
• Notary Fees. From €800

 Overall, you need to add up to 10%-13% to the selling price when purchasing a property on the CDS.

5. Legal Procedure:

1. Reservation deposit. Once you have agreed with the sales price you need to agree on keeping property off the market. For this reason up to €10.000 can be paid to secure your selected property from being offered to other buyers. Please note, in case you change your mind this reservation deposit is not refundable;
2. Private Purchase Contract (PPC). This private contract outlines the terms of the sale and is legally binding. At this stage, you’ll pay a larger deposit (usually 10% of the purchase price).
3. The Public Deed (Escritura publico). This is the final step, at which you pay the remaining balance and the notary will register property under your name

Please note, that step 1s or/and 2 in some cases can be avoided and your lawyer can prepare everything for the PPC or even the Public Deed.

6. Do I need a Lawyer?

 Yes, you need a lawyer to ensure smooth legal procedure. Here is the list of what Lawyer provides:

• Due Diligence:

1. Verify Legal Ownership.
2. Check for Debts. Mortgages, unpaid taxes, community fees, utility bills, pending legal disputes.
3. Review Building Permits and Licenses. Building License (Licencia de Obra)/ Occupation License (Licencia de Primera Ocupación)/ Energy Certificate Performance (Certificado de Eficiencia Energética).

• Preparing the whole legal procedure (outlined in step 5) to protect all your interests
• Calculating and making relevant payments of Taxes, Stamp Duty, Legal and Notary Fees
• Ensures the transfer of ownership
• Transfer of all utility suppliers, Taxes (IBI, basura), community fees to your name

 Lawyer  protects your investment and helps you avoid potential legal or financial pitfalls. Work closely with trusted professionals to ensure every detail is checked before signing any agreements.

7. Expenses of the Owner:

• IBI (Impuesto sobre Bienes Inmuebles - property tax) paid annually. The amount is derived from the cadastral value of the property and the local tax rate calculated by the municipality. The rate typically ranges between 0,4% to 1,1% depending on property’s location.
• Garbage Tax (Basura) paid annually. It is the local charge you are obliged to pay to the Town Hall where your property is located for rubbish removal
• Community Fees. These fees are calculated in line with the percentage of the community which your property represents, in terms of the built area of your unit compared to the entire community, plus a share of the public areas.
• Electricity, water bills, wi-fi etc
• Pool & Garden Maintenance (not applicable to apartments, as these are included in community fees)
• Home insurance. Not compulsory, but advisable

You can ask for all the expenses of the selected property your Real estate Agent to estimate the cost of owning the property.

8. Mortgage

 As a non-resident in Spain, you can apply for a mortgage to cover up to 60% of the selling price. The average mortgage rate is 3%-4%.

You need to ask for your eligibility at your Spanish bank, or contact a mortgage broker.

 The documents to be prepared:

• Passport
• NIE
• Proof of employment or income
• Latest Income TAX return
• Purchasing agreement
• Proof of your current assets or debts
• Credit Rating
• Information about other loans
• Bank statements for the last 3-6 months

The official mortgage process can only start after the Purchasing agreement, but it is possible and advisable to start looking for a mortgage in advance.

At Join & enJoy Marbella Real estate Agnecy we aim at finding you the property you will be happy to live in. Our team has professional real estate agents and lawyers who would make your real estate journey smooth and pleasant. Please contact us and we will be happy to assist you!

+34 602 731 372
www.jjmarbella.com