Investing in Marbella? Know the law, says Oryx World Portfolio
Instruct a lawyer
Before paying a deposit or signing a contract, it is vital to instruct an independent lawyer to protect your interests. Some developments in Spain lack the required permits and if any problems arise after purchase, it is extremely hard to undo a transaction. While all Oryx World Portfolio properties have full legal paperwork in place, not all real estate companies are as scrupulous and it is therefore essential to appoint a legal representative.
Identify your challenges
Understand that the legal and tax requirements for international buyers differ significantly from those of Spanish nationals. For example, how might the country’s inheritance laws affect you, will you require NIE numbers and will you be tax domiciled and therefore required to file annual tax declarations? A good lawyer will draw these issues to your attention but it’s wise to be aware of them from the beginning.
Understand transaction costs
If you’re buying a second-hand property outright, transaction costs on the Costa del Sol amount to approximately 11 per cent of the purchase price. This figure comprises 8 per cent land transfer tax, 1.5 per cent notary and registry fees, 1 per cent legal fees and 0.5 per cent miscellaneous costs and taxes. If securing a Spanish mortgage, additional taxes and registry fees may increase costs to 13.5 per cent. Furthermore, 10 percent VAT applies to new-build properties while there is no land transfer tax.
Understand ongoing costs
Post completion, costs include IBI, the Spanish equivalent to council tax; community fees, the maintenance fees for the upkeep of communal gardens and swimming pools, etc; and non-resident owner’s tax, which applies to non-tax-domiciled owners. Depending on the property location, owners may need to pay rubbish collection fees to the local authority.
Ensure funding is in place before making an offer
Even if there are no financing issues, before paying a deposit, analyse the contract and complete legal due diligence to ensure that you are not putting your money at risk.
This article offers general information on the purchase of property in the Costa del Sol. It does not constitute legal advice. Please consult a local law firm for specific legal advice.