CASA COSTA PROPERTY
YOUR GUIDE TO
BUYING A PROPERTY ON THE COSTA DEL SOL
Buying property on the Costa del Sol is relatively straightforward—even for foreigners—but the true cost is higher than the listing price, and there are a few legal steps you absolutely can’t skip.
IN BRIEF
💰 Total costs (realistically)
A good rule of thumb:
👉 Add 10%–15% on top of the purchase price
This covers taxes + legal + admin costs.
1) Main taxes (biggest cost)
These depend on the type of property:
Resale property (most common):
- Transfer tax (ITP): ~7% in Andalusia
New-build property:
- VAT (IVA): 10%
- Stamp duty (AJD): ~1%–1.5%
👉 So:
- Resale → ~7% tax
- New build → ~11–12% tax
2) Legal + admin costs
Typical additional costs:
- Lawyer: ~1%–2% of price
- Notary: €600–€1,000
- Land registry: €400–€900
Optional but common:
- Mortgage fees (if financing)
- Currency exchange costs (for foreign buyers)
3) Example (quick reality check)
For a €300,000 property:
- Taxes: €21k–€36k
- Fees: €3k–€6k
👉 Total extra: ~€30k–€45k
⚖️ Legalities (what you must do)
1) You CAN buy as a foreigner
Spain has no restriction on foreign ownership. Many buyers are international.
2) You need an NIE number
This is your tax identification number in Spain—required for:
- Buying property
- Opening a bank account
- Paying taxes
3) Use a lawyer (strongly recommended)
Not legally required—but realistically essential.
They will:
- Check the property is debt-free
- Verify ownership
- Ensure planning permissions are valid
- Review contracts
Without this, you’re taking unnecessary risk.
4) The purchase process (simplified)
- Reservation deposit (€3k–€10k typical)
- Private purchase contract (~10% deposit)
- Final signing at notary
- Property registered in your name
5) Ongoing taxes after buying
Expect yearly costs:
- IBI (property tax): local council tax
- Non-resident income tax (even if not renting)
- Wealth tax (for higher-value assets)
⚠️ Key risks / things people underestimate
- Underestimating total cost (very common)
- Buying properties with debts or illegal extensions
- Not checking community fees (can be high in complexes)
- Assuming rental income is tax-free (it’s not)
📈 Market reality (2025–2026)
- Prices on the Costa del Sol are rising fast due to international demand
- Prime areas (like Marbella) are especially competitive
- Foreign buyers make up a large share of purchases
🧠 Bottom line
- Budget +10–15% extra beyond the price
- Taxes are the biggest chunk
- The process is safe if you use a good lawyer and do due diligence
MORE DETAIL
Buying Property on the Costa del Sol: Costs, Taxes, and Legal Requirements
The Costa del Sol remains one of Europe’s most desirable property markets, attracting buyers from across the world with its climate, lifestyle, and strong investment potential. Whether you’re planning to relocate, purchase a holiday home, or invest in rental property, understanding the true costs and legal process is essential before making a commitment.
The Real Cost of Buying Property
One of the most common mistakes buyers make is focusing only on the listing price. In reality, purchasing property in southern Spain involves additional costs that typically add 10% to 15% to the purchase price.
Property Taxes
The largest portion of these additional costs comes from taxes, which vary depending on whether the property is new or resale:
- Resale properties are subject to Property Transfer Tax (ITP), currently set at 7% in Andalusia.
- New-build properties incur 10% VAT (IVA) plus Stamp Duty (AJD), usually between 1% and 1.5%.
This means buyers of new developments should expect to pay slightly more in taxes than those purchasing resale homes.
Legal and Administrative Fees
In addition to taxes, buyers should budget for professional and administrative services:
- Legal fees: typically 1%–2% of the purchase price
- Notary fees: approximately €600–€1,000
- Land Registry fees: around €400–€900
If financing the purchase through a mortgage, there may also be additional costs such as valuation fees and bank-related charges.
A Practical Example
For a property priced at €300,000, total additional costs could range between €30,000 and €45,000. This brings the true purchase cost closer to €330,000–€345,000.
Legal Requirements for Buyers
Spain has a well-established legal framework for property transactions, and the process is generally secure—provided the correct steps are followed.
Foreign Ownership
There are no restrictions on foreign buyers purchasing property in Spain. International buyers make up a significant portion of the market on the Costa del Sol.
Obtaining an NIE Number
All buyers must obtain a Número de Identidad de Extranjero (NIE), which is a tax identification number required for:
- Purchasing property
- Opening a Spanish bank account
- Paying taxes and utilities
The Importance of Legal Representation
While hiring a lawyer is not legally mandatory, it is strongly recommended. An independent solicitor will:
- Verify legal ownership of the property
- Check for outstanding debts or charges
- Confirm that planning permissions and building regulations are compliant
- Review contracts before signing
Skipping this step can expose buyers to unnecessary financial and legal risks.
The Buying Process
The property purchase process in Spain typically follows these steps:
- Reservation Agreement
A small deposit (usually €3,000–€10,000) secures the property. - Private Purchase Contract
The buyer pays approximately 10% of the purchase price. - Completion at the Notary
The final deed is signed, and the remaining balance is paid. - Registration
The property is officially registered in the buyer’s name.
Ongoing Costs After Purchase
Owning property in Spain also involves annual expenses, including:
- IBI (Impuesto sobre Bienes Inmuebles): a local property tax
- Non-resident income tax: applicable even if the property is not rented
- Wealth tax: depending on the value of assets
Community fees may also apply if the property is part of a residential development.
Market Trends
The Costa del Sol property market continues to show strong growth, driven by international demand and limited supply in prime areas. Locations such as Marbella remain particularly competitive, with rising prices and high interest from overseas buyers.
Final Thoughts
Buying property on the Costa del Sol can be a rewarding investment, whether for lifestyle or financial returns. However, it’s crucial to approach the process with a clear understanding of the full costs and legal requirements.
By budgeting for additional expenses, securing professional legal advice, and conducting proper due diligence, buyers can navigate the market confidently and avoid common pitfalls.
WWW.CASACOSTAPROPERTY.COM
Whatsapp Lisa Burgess on 0034 634 0909 51 or
Stefan Mitchell on 0034 666 44 84 56