Are you thinking of buying or selling a property on the Costa del Sol?
We have put together a short description with some general points about buying or selling a property on the Costa del Sol to help you get started and so that you can get answers to some of the questions and thoughts you probably have in the initial phase.
When you, as a foreigner, are faced with the consideration of buying or selling a home, there are many aspects to consider and not least the language, which may not come so easily. Further down this page, you will find some main points that you must consider when either buying or selling a home.
Use our buyer and seller guide to get started. Have a chat with us at Sun Properties Marbella - when you get further in the process, we will always recommend that you use a local lawyer in the further course of the legal process.
Buying a home on the Costa del Sol
The process of buying a home on the Costa del Sol
Buying a home on the Costa del Sol is not complicated, but a little different from what we are used to in our own country. A purchase takes about 6-8 weeks regardless of whether you are buying a house or an apartment, and everything is done in Spanish. There is a lot to check and we will help you through this process and put you in touch with a lawyer who will make sure everything is correct and secure.
Viewing & bidding
After you have seen a number of properties and you have found one you like to buy, the buyer and seller agree on a price.
(Contrato de Reserva) A simple document that establishes the price and terms of payment. 6,000 Euros is paid as a reservation. The seller then removes the property from the market during a reservation period of (approx. 8-14 days) and documentation is obtained from the property register to ensure that all information is correct.
Legal investigation of the conditions regarding the home
The lawyer checks that everything about the property is correct, that all permits and licenses from the municipality are in order and that there are no debts, mortgages, costs, tenants and encumbrances registered on the home.
Private purchase contract
(Contrato de Compraventa) Once the lawyer has checked that everything is in order with the property, the buyer and seller can sign the purchase contract. The contract is very detailed and contains a comprehensive legal description of the property itself. It also contains all buyer and seller information, purchase amount, payment schedule, estimated date for signing the deed and other legal clauses. In connection with this, the buyer usually pays 10% of the home's price.
(Escritura de Compraventa) In Spain, the final step in a property purchase takes place at a notary. It is a formal document and both parties, both buyer and seller, either together with their lawyers or only the lawyers with power of attorney from the buyer and seller, meet with a notary to sign the deed of the property. In connection with this, the buyer pays the remaining amount of the home's price to the seller and the seller hands over the keys to the home to the buyer. From this moment on, the buyer is the rightful owner of the property. The deed must be signed by three parties: the seller, the buyer and the notary.
Registration of the purchase
A few days after the deed is signed, it can be collected from the notary, after which it is passed on to the land registry, which ensures that the property is officially registered in the name of the new owner. Now all overheads, fees, transfer tax and other legal costs are paid. Your lawyer ensures that all contracts such as water, electricity, owner's association, etc. as well as various taxes relating to the home are transferred in the name of the new owner and that these costs are automatically deducted from your bank account via direct debit.
When you buy a property on the Costa del Sol, you must always expect that there will be some taxes and fees added to complete the purchase itself. There are different amounts depending on whether the purchase concerns used homes or newly produced properties. When buying a Spanish property, the tax is different if you buy from the developer or if you buy from an owner of a property.
Transfer fee when buying an existing property
- The tax for the purchase of a used property is called ITP and is 7% of the price since the end of April 2021. Previously this was between 8-10% but now it is 7% for all transactions regardless of price.
- 0% costs to the notary and the land registry
- 1% + VAT to the lawyer.
VAT on the purchase of newly produced property
- 10% VAT (IVA)
- 5% stamp duty (IAJD lmpuesto de Actos Juridicos Documentados)
- 0% costs to the notary and the land registry
- 1% + VAT to the lawyer.
Selling your property on Costa del Sol
Get the price right & find a local agency
Thinking about selling your property on Costa del Sol? We suggest you use an established real estate agent with a long-term local knowledge of the current market and who will help you to set a realistic price for your property.
Putting your property on the market with a too high asking price, you can risk your property can be on the market for months or even years and many times it will often sell for less than could have been achieved had it been marketed at the correct price from the start.
If you are thinking of selling your property on Costa del Sol, then consider using us at Sun Properties Marbella and take advantage of our more than 20 years’ experience selling properties on Costa del Sol – get in contact with us and ask us for a free appraisal.
Below you will find some basic information’s about what you should know when selling a property.
You need to have your paperwork in order
When selling a property on Costa del Sol, there are some basic documentations you need to provide which includes:
- Nota simple from the Property Registry - need to be an updated copy.
- Receipt of payment of IBI (property tax) – latest receipt
- Receipt for payment of basura (refuse collection) - latest receipt
- Is your property within a community, you have to provide a copy of your monthly community fees – latest receipt.
- Energy performance certificate (Certificado de Eficiencia Energética/CEE).
Know your selling costs
Sellers must pay taxes and costs, depending on:
- Period of ownership.
- Increases in value over the period.
- Your tax resident status.
- Income during the year you sell.
You need to pay a tax based on the incremental value over the number of years you have been the owner.
The Community Fees need to be up to date. At the notary, you normally must present a Community Certificate to the buyer.
IBI and Utilities
All utility bills need to be paid up as these will need to be settled to the date of sale. Providing the original proof of payment need to be provided when signing. The vendor need pay the IBI or council tax for the whole year they are selling.
Mortgage Cancellation Fees
If you have a mortgage, the bank will probably charge you from a 0.5 per cent to 1 per cent cancellation charge for the balance of the outstanding mortgage.
Mortgage Cancellation and Registration Fees at the Notary
In addition to the point about Mortgage Cancellation Fees above, you as the vendor, also need to make sure that your mortgage is cancelled at the Notary and Registry.
Non-Resident Retention 3 per cent
If the vendors are not a resident of Spain, the buyer of the property will also have to retain 3 per cent of the sales price stated in the “Escritura” (Title Deed) to pay in Tax (Hacienda) on your behalf, towards your Capital Gains Tax. Fiscal residents don’t have any retention made on them, sometimes though, they might have to pay tax on the sale the year after when filling in their tax returns.
Are you either thinking in selling your property or considering buying a holiday home on Costa del Sol, we strongly recommend you to use a local lawyer.
We at Sun Properties Marbella can always suggest you one who, first of all have the knowledge in property transactions, but who also speaks your language and who knows about any rules and tax regulations between the two countries.
The lawyer will prepare utility contracts, community charges and “Suma” invoices, communicate with the buyers’ representatives and the Notary, book the Notary appointment and organize all of the related paperwork, go with the seller to the Notary and translate for them, and give fiscal representation throughout the selling process