for Sale Buyers Guide for Costa del Sol, Spain, Andalucia
The first question we are often
asked is “What does my money
buy me in Spain?”
can no longer claim to be an undiscovered paradise of
cheap property. It is one of the worlds most sought after holiday
destinations with more than 40 million people visiting it each
year. This popularity has resulted in large scale development
and is reflected in the property prices.
This is not to say that there
are no good value properties to be found. Compared to the rest
of European capitals Spain offers good value for money. The increased
exposure has also had the effect of making Spain an excellent investment
choice with robust growth in property value. With mainland Europe’s
best climate, Spain is destined to grow in popularity each year.
In order to make the most of your money, there are a few options
- Buy off Plan . Prices always increase
as the development progresses and near completion. Clients buying
early get the best deal and investment return.
- Location . The frontline golf and beach
properties and other prime locations always command higher prices.
Flexibility on location can translate into substantial savings.
- Renovation . If you intend living in
Spain permanently, there is always the option of buying a ruin
or property needing some modernization or refurbishment. It is
advisable to be on hand to supervise this work yourself.
- Mortgages . Should you not have the cash
available for an outright purchase of the property you desire,
there are numerous methods of securing a mortgage to finance
the property of your dreams. Pinsapo Realty can assist in all
matters relating to mortgages.
|€45,000 - €150,000
properties, studios, 1 bed apartment of reasonable to mid
|€150,000 - €200,000
||1-2 Bed Apartments
of mid range quality, fincas in need of renovation
|€200,000 - €300,000
||2-3 Bed Apartments,
smaller townhouses, inland villa/finca
|€300,000 - €400,000
3 Bed Apartments/Townhouses of good quality, Older Villas needing
renovation, Larger apartments of good quality
|€400,000 - €600,000
Luxurious Townhouses/Apartments, Entry level of larger Villas
|€600,000 - €1,500,000
||High Quality Villas
and extremely luxurious Townhouse/Apartments
What dreams are made of!
The best reason for investing in Southern
Spain can never change; the sun. The climate has established
the Costa del Sol as the “ California” or “ Florida” of Europe,
and comes complete with a similar jet-set lifestyle, should you
With this unique climate on offer in Europe, the Costa del Sol
shall continue to be the favourite purchase choice for holiday
homes and investment properties. There is also a changing demographic
of new resident, with the younger entrepreneurial influence now
becoming apparent along with the continued investment by the
older resident looking for a sunny retirement. This all translates
into a healthy property investment climate for sales, re-sales
Since 1998, property prices have doubled on the Costa del Sol. In
2003, resale (second-hand) property increased by a massive 24%, with
that of new property trailing with a very healthy 18.5% increase.
At the top end of the luxury spectrum, there was a more measured
growth of approximately 12-15%. When considered against the background
of the general economic climate of the past year, it is clear that
the property market in Spain offers a very sound investment opportunity.
The healthy investment opportunity is not limited to the Costa del
Sol, with Spain in general enjoying a 20% national increase in property
Málaga province had 90,000 new homes constructed in 2003, with the
national total of homes built being 645,000. Of the total number
of homes built, approximately 16% (100,000) of the units built were
sold to foreigners.
In the next five years, these figures are expected to increase substantially,
with more than 800,000 – 1,000,000 Europeans expected to purchase
homes in Spain. Some studies predict twice that figure.
In highest demand by the foreign
buyer, is a home of approximately 70 square meters with two bedrooms,
in a well maintained area.
and the Economy
One of the largest contributors to the Spanish economy is tourism.
Spain holds the enviable position of being second only to France
as the world’s most popular destination. More than 52.5 million tourists
entered the country in 2003. More than the resident population of
With so many people falling under the spell of the Spanish people
and lifestyle each year, the property sector is expected to continue
to have considerable growth. Many visitors, after more frequent visits,
choose to purchase a second holiday home in Spain.
Spain ’s popularity as a tourist
destination has definitely helped Spain to achieve the strongest
economy in the Union, with a substantial 2.4% growth rate, more
than 4 times that of its partners.
With the unchangeable weather, the low crime levels and the high
standard of living at a comparatively low cost, all add to the allure
of investing in Spain. There is a continuing high demand from other
countries, as well as resident Spanish buyers, and it is expected
that Spain, and the Costa’s in particular, shall remain a favourite
of investors for many years to come.
Most importantly, prior to coming to Spain, is the analysis of your
financial situation and making sure that you have funds at your disposal
for making a reservation deposit. The sum normally required is a
minimum of €6,000, however this may be higher for more expensive
properties. Cash or credit cards are the most commonly accepted forms
of payment. Should you not have these funds at your disposal, you
risk losing that dream home to someone that does!
on Purchase Terms
Once you have chosen your property, you can negotiate the terms and
conditions of the purchase. Sale subject to mortgage, payment terms
or handover dates are some of the issues that may need to be discussed.
In order to comply with all legal criteria, we may recommend that
a lawyer assists in this process. This protects all parties in the
negotiation and may ease the transfer at a later date.
your Legal Representative
We can almost guarantee that we can recommend a Spanish lawyer that
speaks your language! A lawyer is necessary to provide the legal
guarantees that the property being purchased is free of debt, embargos
or charges and has fulfilled its obligations with regard to payment
of taxes, local contributions or community charges. Debts remain
attached to the property, not the individual, so it is crucial that
a local lawyer conducts the necessary searches and checks to ensure
a property is debt free before transfer to your name.
Once the negotiations are complete, it is time to formalize the offer
in writing. It is standard practice to include the reservation deposit
with the formal offer, until private contracts are exchanged. The
reservation deposit must never be given directly to the vendor. It
should be given to your lawyer to be held in a protected, bonded
account until completion of sale.
Once the owner has accepted the offer, the next step is to exchange
private contracts or sign an option to purchase. This takes place
within two weeks after the formal acceptance of the offer to purchase.
Your lawyer will have completed all his investigations into the property
and arranged with the owner to settle all outstanding debts. The
private contracts shall set out the details of the agreed offer to
purchase and set a date for final completion at the notary. At this
stage, you are expected to pay between 10% - 30% of the purchase
price, depending on the type of property and mortgage granted.
The sale is formally completed when the public property deeds are
signed in front of the notary, the final payment is made to
the seller, and possession of the property handed to the buyer,
with the keys.
Once the property deeds are signed, the notary will advise the local
land registry of the changed title deed. All the relevant taxes
on the purchase will then be paid by your lawyer on your behalf
and he shall register your title deeds. Your lawyer should
also assist with the transfer of the local utility suppliers
accounts to your name and arrange their payment through direct
debit from a local bank account in your name
As a guideline, estimate the total costs of transferring the property
to your name to be 10% of the total purchase price.
As a guideline, the fees and taxes are normally approximately 10%
of the purchase price. All fees quoted are approximate fees
only. Please consult your legal advisor regarding each individual
1.200 - €1.800 or 1% of the purchase value, whichever is the greater,
plus IVA charged at the standard 16%
This scale is fixed by law; however the costs range between €300
Approximately 60% of the notary fee
These taxes are specific to the type of property purchased.
Commercial property, plots of land and garages attract IVA of 16%
Promotion, Developments or property purchased from a habitual trader – 7%
plus 1% Stamp Duty
Standard Purchase – 7%
Plus Valia’ tax is usually paid by the vendor. Should the vendor
wish for this to be paid by the buyer, it must be stipulated in the
terms and conditions of the private contract. This tax can range
from a few hundred euros to several thousand on larger properties
with a lot of land. Who pays this tax must be discussed with your
lawyer prior to signing the transfer of the property.