Purchasing a property on the Costa Blanca: Understanding the hidden costs

Interested in investing in property on the Costa Blanca?

It’s a popular choice for foreign investors, but understanding the expenses involved is key.

When budgeting for your purchase, it’s crucial to factor in additional costs upfront. This helps avoid surprises later on.

Expect to pay a 10 per cent tax on the property’s purchase price. For existing homes, this is known as the 10 per cent ITP (Impuesto de Transmisiones Patrimoniales), paid after signing the sales deed.

New builds have a reduced VAT rate of 10 per cent, paid directly to the construction company.

Additionally, there’s a 1.5 per cent stamp duty (Actos Jurídicos Documentados) for new builds, but not for resale transactions.

The buyer is responsible for the costs associated with the notarial deed of purchase.

Notary fees are determined by law, and you can choose the notary. After signing, the deed needs to be registered in the property registry, typically taking around 6 weeks.

Although not mandatory, hiring a lawyer for property transactions in Spain is advisable.

They offer crucial legal advice as notaries don’t conduct property checks.

Legal costs vary based on the purchase price and property type.

Upon receiving the property keys, there may be expenses for transferring utilities, such as administrative fees or connection costs.

For new builds, connecting utilities could result in additional expenses.

Also, consider any bank costs related to the check issued for the purchase price.

In summary, buyer costs for Costa Blanca properties generally range from 11 per cent to 13 per cent of the purchase price.