Practical Tips
Building Off-Plan
We strive to keep these pages and information as up to date as possible.
This is not always possible, especially now that governments are constantly changing regulations and laws.
Before using our tips, make sure that the information is still valid and fits in the context.
Call or e-mail us for any specific questions you may have.
Why new build?
You are more likely to have a buyer at resale. Newer properties sell quicker than older properties.
You are assured of a perfectly situated plot of land which is in a location of your choice.
You can be confident that you will have access to professional guidance throughout the whole process.
You are assured of top quality construction, workmanship and materials from start to finish.
You will have an energy-efficient property with an extremely low EPC rating.
You are assured of appreciation in value of your property by using the most modern construction techniques and materials.
You have the experience and knowledge of a specialist in property development in the Costa Blanca.
There are no unpleasant surprises as is often the case with older houses, we guarantee all our work.
You can choose the finishing touches, inside and out, such as wall tiles, flooring, kitchen design and bathroom design.
At Mycostablancavilla you are a very important client and also an ambassador for our work.
We do not invest in expensive advertising campaigns but in quality and knowledge through which our ambassadors spontaneously advertise.
We are with you every step of the way
We try to document everything as much as possible on our website and keep things up to date.
Photos and videos give good visual information, but in our view it is still necessary to come and visit us in Spain.
Allow at least 3 full days for your visit with us, less time is too intensive.
Together we will visit different plots of ground within your budget.
We also visit showrooms to see the materials used and get to know your personal style requirements.
We will visit one of our current projects which is under construction or one of our villas which is already inhabited.
We will go over the administrative matters and important aspects and answer any questions that you may have.
Mycostablancavilla distinguishes itself from the rest by providing that extra personal service for our clients every step of the way.
How much does it cost to buy a property in Spain?
'Transfer tax' (ITP) Impuesto de Transmisiones Patrimonials
When buying an 'EXISTING' property in Spain, (also known as 're-sale' property), the transfer tax is a part of the 'buyers' costs.
It is based on the 'declared value' of the property.
Each autonomous region in Spain sets its own transfer tax rate.
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For properties located in the Murcia region, the transfer tax rate is 8% of the declared value of the property.
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For properties in the Andalusian region and with a price of up to €400.000 the transfer tax rate is 8% of the declared value of the property. Higher value properties are taxed at a higher rate.
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For properties located in the Valencian region, the transfer tax rate is 10% of the declared value of the property.
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A good rule of thumb to help calculate your budget when buying a property is to allow at least 15% on top of the asking price.
This should cover all the taxes and expenses that you must pay – even the solicitor´s fees.
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'VAT/Sales tax' (IVA) Impuesto sobre el Valor Añadido
When buying a ‘NEW-BUILD’ or 'OFF-PLAN' property in Spain, the VAT/Sales tax is a part of the 'buyers’ costs.
A 'new-build' is a property that is being sold for the first time. You’d normally buy this kind of property from a developer or a bank. For New-Build or Off-Plan purchases, the VAT element will be payable to the developer and will form part of the purchase price itself. It will appear in the purchase contract, so you will be aware of it from the outset.
The amount of VAT/Sales tax is fixed at 10% of the purchase price of the property.
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​'Stamp duty' (AJD) Actos Juridicos Documentados
AJD is only payable on 'land' and 'new' property sales and is part of the 'buyers' costs.
This tax is in addition to the above VAT/Sales tax and is calculated at a rate of:
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1.5% of the declared value for properties located in the Valencian & Andalusian regions.
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2% of the declared value for properties located in Murcia Community.
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‘Notary fees’
These are between 0.6% and 1%. Please note, however, that a notary in Spain does not carry out checks of the property that you purchase as you are used to in your country, for example, whether the property has an outstanding mortgage at the time of purchase. This information can be found at the Land Registry, the Registro de la Propiedad. We carry out all of these checks for our customers, of course!
‘Inscription fees’
For the "Registro de la Propiedad", the Spanish Land Registry amount is approximately 0.3% to 0.7% of the purchase price.
If you take out a mortgage on your villa, you will need to pay costs to the bank, the notary and the Land Registry.
The costs of the mortgage could amount to 1% - 1.5% of the mortgage amount.
The costs for the civil-law notary, the registration in the land registry and the layout of the documents together, amount to approximately 2.5% of the mortgage amount.
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‘Construction tax’
Impuesto sobre construcciones, instalaciones y obras. For the application of a building permit, you pay up to 2.5% tax, calculated on the value of your future home as indicated by the architect.
Of course, you also need to pay the person that assists you in the purchase, such as a broker, lawyer, etc., hired by you for their services. The amount of this cost should be determined in advance with the person appointed. It is very common in Spain to pay a lawyer or (and) a Solicitor to assist in the purchase of a villa. We can also do this process for you!
You can see that the overall picture of "buyers costs" consists of many parts, all together you can say that it is still a lot cheaper to build your dream home on the Costa Blanca than in your own country.
Fixed on-going charges for your property
After you have purchased or built a villa in the Costa Blanca, you have to pay taxes and other fixed charges for the villa and services every year.
Here is an overview of the taxes and other additional fixed costs you could have to pay.
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‘Property Ownership Tax’
(IBI) Impuesto sobre bienes inmeubles. You may pay between 0.4% and 0.9% property ownership tax. The percentages will vary between municipalities.
‘Spanish wealth tax’
Impuesto sobre el Patrimonio. Wealth tax is an annual tax, payable on the total net value of your assets as at 31st December. If you are resident in Spain you are liable for your worldwide assets. Non-residents only pay wealth tax on assets located in Spain. This was abolished in 2008 but was re-introduced during the financial crisis.
‘Community Fees’
Cuota de communidad. This concerns joint costs of the complex or of the (flat) where you bought your home. For example, maintenance costs for common areas, a communal swimming pool, street lighting, surveillance, etc. This only applies in urbanisations and apartments.
‘Cleaning fees’
Basura. This amount differs per municipality, but usually amounts to around €400 per year.
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‘Building and contents insurance’
Seguro de construcción & seguro de objetos domésticos.
Household insurance will vary according to the circumstances of the owner and the type of property. However it should be born in mind as a cost that all property owners will face.
Personal Income Tax (Impuesto sobre la Renta de No Residentes – IRNR)
Non-residents who own property in Spain have to pay an annual personal income tax that varies according to whether the property is rented out or not.
If you don’t rent out your property in Spain, then the personal income tax rate is fixed at 25% of 2% of the "valor catastral" for the property.
The “valor catastral” for a property in Spain is an important estimate of its "capital value".
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Example:
To calculate the personal income tax on a property with a "valor catastral" of €700,000 would be as follows;
The "capital value" of the property for tax purposes is €700,000
The taxable base is (2% of €700,000) which equals €14,000
This means that the personal income tax for the property is (25% of €14,000) which equals €3,500
If you rent out your property in Spain, then you must pay 25% income tax in Spain on the rental income.
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PLEASE NOTE: Every effort was made to check the accuracy of the information contained within our “Legal Advice” articles at the time of writing, but it may have been superseded over time. Mycostablancavilla cannot accept responsibility for any errors or omissions, nor for the authenticity of any claims or statements made by third parties. We therefore strongly recommend that readers of our articles make their own thorough checks before entering into any kind of transaction or contract.
Prices and figures were correct at the time of writing but may now vary due to circumstances beyond our control.
All details, photos, videos and prices are shown for your guidance only and do not form the basis of any potential contract. Unless stated otherwise, prices exclude IVA/VAT, service connection charges, registration and legal fees. Properties are sold unfurnished unless stated otherwise.