Steps to follow for the purchase of property on the Costa Del Sol
Once you have founded your chosen property and the price is agreed, the second phase is to make a reservation deposit to reserve the property for you on the real estate market. The amount can be vary and depends on the price of the property. Expect to pay between € 6,000 and € 10,000. During this reservation period which is circa one or two weeks (time can be optional), you or your lawyer can check the Nota Simple and rest of the necessary documents. The choice of lawyer is very important and we can recommend the best options for you.
The next phase is to proceed to sign the private contract or the contract with ´option to buy´. We always recommend to use the contract with ´option to buy´ as in this case the vendor can not change his mind to sell the property because in the private contract he has this option.
The date of signing the property and the notary where the deal will be done has to be written into the contract. The buyer has all rights to choose the notary. During the time drafted in the contract, you or your lawyer should carry out due diligence and check the documents about the property and check if the property has any debts.
- If the house is new: IVA, IAJD, Notary, Register and lawyer
- Resale property : ITP, Notary, Register and lawyer
- If it is a parcel of land, an industrial unit or shop or garage which is not connected to a house, you will have to pay IVA (VAT) and Legal transactions Documented to 18% + 1,2%.
Tax On Value added:
- For any VILLA or APARTMENT, or GARAGE that is annexed to an apartment, where the vendor is a developer, promoter or habitual trader for BRAND NEW PROPERTIES – 4%.
- For PARCELS OF LAND, COMMERCIAL PREMISES or COMMERCIAL GARAGE SPACES, where the vendor is a developer, promoter or habitual trader or a company. This covers virtually all NEWLY URBANIZED LAND PARCELS and NEWLY BUILT COMMERCIAL PREMISES. This only covers resale properties when the vendor falls into one of the above categories – 18%.
STUMP DUTY (I.A.J.D.)
Tax on documented Legal transactions, 1,2%.
TRANSFER TAX (I.T.P.)
Scaled at 8%, 9% & 10% Payable by the buyer for the purchase of any Real Estate (villas, flats, land, commercial premises, garages), provided the vendor is not a developer or normally trading in the business of resale properties.
8% is applicable up to the amount of 400,000€ or 30,000€ in the case of garages except those belonging to the dwelling and with a maximum of two; 9% is applicable to the amount between 400,000€ and 700,000€ or between 30,000€ and 50,000€ for garages; 10% is applicable to the amount exceeding 700,000€ or 50,000€ for garages.
The costs of the Notary so that the document can be inscribed in the Registry of Land etc.The price is determined by the value of the transaction, also can influence the extension of the writing, number of folios, if it has mortgage, etc… The orientative cost is of 0.3% plus VAT.
PROPERTY REGISTRY FEES
The costs of the Recorder who verifies the legality of the document and register it in the Registry of the Property. The cost is of around the 0.2 % plus VAT.
The costs vary according to the value of the sale price usually 1% approx of the buying price.
MUNICIPAL ADDED VALUE TAX (PLUSVALIA)
This is a tax relating to the increase in the value of the land only, and is calculated and applied by the local town hall according to the increase in value between the present purchase and previous sale, the value or size of the building does not affect this tax. The vendor normally pays this tax, unless otherwise agreed by both parties.