Buying Guide 2019
Buying a Property on the Costa del Sol
Atlantis PMR have a substantial number of properties for sale on the Costa del Sol. Whether its buying a property on the Costa del Sol or buying a property anywhere else in Spain the sales process is the same with the exception that the Costa del sol has around 300 days of sunshine as well as a diverse selection of properties to suit all needs and requirements. The Costa del Sol is one of the most desirable places to own a property in Southern Europe.
Choosing your Agent
Choosing an Agency is the first step when buying a property on the Costa del Sol. There are thousands of Agencies which makes selecting the right agency more complex. However in this area of Spain the Majority of Agencies share properties in a database, therefore you only really need to find one agency who can select the properties for you. Atlantis PMR pride themselves as they have a large portfolio of properties in all areas of the Costa del Sol from Malaga to Sotogrande as well Inland Country areas. Many other Real Estate agencies contact Atlantis PMR to view properties.
Atlantis PMR have 5 Real Estate Agents who speak a combination of Spanish, English, French, Italian, Portuguese, Romanian and Dutch. Each are professional, attentive, exceptional listeners, knowlegable about the Costa del Sol and excellent Estate Agents.
Atlantis PMR is not only an Agency where property sales take place. At Atlantis PMR we provide A one stop shop for your property and vacation on the Costa del Sol. Atlantis PMR also has a Holiday rental and Long term Rental Department, to maximise your potential property investment if you are purchasing for Investment& Rental purposes. Atlantis PMR also offer a Property Management and Maintenance service for Property owners, thus providing comprehensive services.
Atlantis PMR also have a number of apartment buildings , Hotels, Companies, and businesses for sale which attract world wide Property Investors. Essentially Atlantis PMR are available for all your property needs.
Contacting the Agency
As soon as you contact us through many of the different Property portals or our website one of our attentive agents will initially contact you, preferably by telephone, to make the connection and discuss your property requirements as well as by email to send various examples of options that are available on the Property Market. Once a selection is created, the agent will arrange viewings for you on the designated date when you are able to attend the Agency. If you are visiting the Costa del Sol, our agents are able to collect you from your Hotel or Holiday property , tour you to the selected properties as well as introduce you to areas of the Costa del Sol if you are unfamiliar with the areas.
Making and Offer
Once you have found a property you are interested in purchasing you will need to make an offer . The estate agent can guide you into making the offer for the property. Some properties have more flexibility than others which is often in relation to circumstances surrounding the property , such as a property that has a mortgage or one that doesn’t or personal situations of the vendor that force them to accept a lower offer that the advertised price. If you make an offer that is too low , the vendor may become offended and that could jeopardise the sale of the property. Once the price has been agreed you will sign a reservation contract with a payment of either 3000 euros for properties up to 150,000 euros, 6000 euros for properties up to 500,000 euros and 10,000 euros for properties superior to that price. The reservation amount can be held in either your lawyers client account, or the estate agency client account. In some circumstances the amount can be transferred to the property owner but only once the property has had its due dilligence.
The Legal Process/ Due Dilligance
It is recommended to hire the services of a reputable lawyer. It is better to be recommended a lawyer by the Real Estate Agency. Atlantis PMR collaborate with many law firms on the Costa del Sol, that speak various different languages. It is always important to feel at ease with a lawyer that you feel comfortable with as well as being able to understand what they are saying to you in your own language. The Lawyer will perform the “Due Dilligence” to ensure that all the paperwork that has been presented by the Real Estate Agency and property owner, is in order and that there are no outstanding debts on the property and very importantly that the name of the owner is on the title deeds of the property. The lawyer will also ensure that there are no tenents in the property ( no property can be sold with tenants inside the property) unless agreed in the Private Contract otherwise, the property is free of any debts, encumbances, embargos, or liens, to check that all the local taxes ( IBI , Basura and Community fees are paid and up to date), check the registration of the property , check with the urban planning department, check with the community of owners as well as assisting with the Banks ( regarding Mortgages) communicating wth the Agencies involved in the sale as well as the property owners lawyer and the property buyer.
All properties must have all the necessary paperwork which includes the Energy efficiency certificate and the First occupation Licence, ( these are two very important papers that are fundamental . Without the First occupation licence it is practically impossible to get a Mortgage and without the energy efficiency certificate, practically impossible to purchase the property.
Your lawyer will also apply for an NIE number for you, Open an Bank Account, ( Atlantis PMR collaborate with a number of Banks and can recommend the services of various Banks to suit your needs). In the case that you are not able to stay in the country to sign for the property on the proposed date of Arras and Public Notary, you can give your lawyer POA ( Power of Attorney) to sign documents and the signature of the sale on your behalf.
Getting A Mortgage
Atlantis PMR Collaborate with a number of Banks as well as Mortgage brokers to offer a comprehensive approach to getting a Mortgage. The Mortgage brokers work with all the banks which ensures a greater chance of getting several options to compare, or you can opt for a Bank that you feel comfortable with. The Estate Agency can guide you when it comes to making important decisions.
International Money Transfer
Atlantis PMR collaborate with Money Corp and Foreign Currencies direct , to ensure that you can get the best rate of exchange when buying or selling a property on the Costa del Sol. This is for all currencies outside the European Union where the euro is not the currency. We work with companies whereby they can fix a rate for up to 6 months. All registrations with International Money Transfer companies are done in accordance with the Data protection laws.
The Private Purchase Contract
Once the legal searches have been made by your lawyer , which is usually 2-3 weeks after the signing of the initial reservation contract, you will then sign the 10% of the total amount which is called the “Contract de Arras”. ( The Private Purchase Contract) which will define the exact date of Purchase. The amount of 10% of the total amount is paid (less the amount already paid in the reservation contract) . This binds you to the purchase of the property . If you change your mind after signing this contract then any amount you have paid, you will lose. If the Owner cancells the sale after signing this document , then he will have to refund the double back of the deposit paid to you and you many claim compensation in the courts. From both sides there is a mutual understanding where both parties are in agreement.
Completion- Signing in the Public Notary
Standard timelines from signing the Private Purchase contract there is usually the signing in the Public Notary, the escritura ( deeds of the Property) 3-4 weeks later. The Lawyer will arrange the cheques that need to be paid with the balance of the amount that needs to be paid to the property owner. All the taxes will be outlined as well as the mortgage with the bank ( if applicable) . You will also receive the keys to your new home/property investment.
Taxes payable by the buyer if you are buying a resale property
- 8% for amounts under 400,000 euros
- 9% for amounts 400,001-700,000 euros
- 10% for amounts over 700,001
- For new properties ( New Developments) there is no ITP but VAT (IVA) is 10% payable regardless of the price . There is also 1.5% stamp duty.
- Legal fees Usually 1% +21% IVA
- Mortgage opening fee 1.5% and 1.8% for the Mortgage deed
- For reslae property you have to calculate 8-11% on top of the asking price
- For new properties and developments you have to consider the cost will be 12-14% on top of the asking price.
Making a Will
It is highly recommended that when you purchase a property in Spain, that you make a Will. The will is drafter in two languages ( your native language and the spanish language) The Will is drafted to cover your assets that you have in Spain. The document then has to be Notarised ( signed in the public Notary with your Lawyer or legal representative)
The Cost of Ownership of a Property in Spain
There are many on going costs to consider when buying a property in Spain. Always take into consideration the running costs when considering purchasing a property.
- IBI ( Impuesto sobre bienes Inmuebles) This depends on the Municipality and type of the property that you have purchased.
- Basura ( Rubbish Collection Tax)
- Community Fees ( This takes into account the cleaning and maintnance for the gardens, swimming pool, community, exterior buildings and access to the community as well as other services within the community ( if applicable). The more facilities within a community such as lifts, underground parking, pool bar, gym etc… would incur a higher community charge compared with a community that has a pool garden exterior parking and no lift.
- Naturally you have to cover the expenses of water, electricity, gas and internet( Fibre Optic)
- A household insurance is highly recommended. At Atlantis PMR we sell insurance packages and collaborate with companies to give you the best comparable prices. If you are looking to rent out your property for Long term rental, we can also recommend a rental insurance.
- Annual Income Tax ( Impuesto sobre la renta de No Residentes) The tax rate is fixed at 19% of 2% of the Valor Catastral of the property.
- The Annual Wealth tax is only applicable to properties which are superior of 700,000 euros.
Renting out your Property
Atlantis PMR have a Property Management and Rental department to ensure that they are able to offer you a comprehensive service for your property investment. Please see the link Renting your property, on our website. If you are earning an income from your property you are requested by law to make a tax declaration on the amount earned and pay taxes on this income. The standard rate is 19% of the gross income earned from the property.
It is very important to keep copies of all your invoices related to the purchase of your property , including Taxes, legal fees, notary and land registry fees, as well as if in the event that you carry out any building work on the property , keep all the licences and invoices as you may be able to off set these expenses against capital gains when you sell and so reduce the spanish capital gains tax.