Buying a Costa Blanca Property

By: Steve Locke

This is the definitive guide to buying a Costa Blanca property. If you are considering investing in property on the Costa Blanca you will need to know exactly what to do and what not to do. This guide will help you every step of the way.

1. Setting Your Budget - A very important decision when buying a Costa Blanca property is deciding on your budget. This will of course be determined by what spare cash you have available and when you reach a final decision on your budget you should stand firm and not be swayed from it.

2. Choosing a Location - Picking the ideal area for your Costa Blanca property is another important decision you will have to make. In the Costa Blanca as with anywhere, there are good and bad areas, take your time and have a good look at the various locations available, when it comes to re-selling later it will help if you have chosen well.

3. New or Resale? - The choice of new or resale when buying Costa Blanca property is another important consideration. Many estate agents will push you towards new property, mostly because they get fewer problems with new property and make larger commissions. Don't be swayed by their fancy talk or by their rubbishing resale property, there are pros and cons for both property types, take a look at everything that is available and then make the choice that best suits your requirements.

4. Property Type - The next decision to make is the type of property you are seeking, will it be a holiday apartment on the seafront of a popular resort, or a detached villa on a large plot of land in the suburbs? The choice of Costa Blanca property is endless and you will need to have some firm idea before you begin your search. Your budget will of course affect your choice and may even determine it if you are looking at the cheaper end of the market.

5. Choosing Your Property - Now is the exciting time, going out and viewing possible properties. Take your time and look at as many as you can - if you are looking at new properties, don't be rushed into a decision 'this is the last one available' is the selling point of many a Costa Blanca estate agent. Don't be fooled, there are always plenty of properties available. Take plenty of photographs and if possible a video, this is very useful when reviewing later, it can get very confusing when you are looking at lots of properties. Make a short list and go back to look again. This is an important decision - take your time. Your perfect Costa Blanca property is out there somewhere.

6. Paying a Deposit - Once you have decided on your purchase it will be necessary to place a deposit to hold the property and have it taken off the market. The standard deposit in Spain is three thousand euros. And the next step will depend on if it is a new or resale Costa Blanca property. With resale property the deposit will be all that is required until signing day, with new property you will have to make a payment of around 30%-40% after one month and possibly some stage payments during the building work, more commonly it is 30% after one month and then the balance when the building is complete. Check with the builder before you pay your deposit - different systems may not suit your circumstances.

7. Choosing a Solicitor - If you are buying your Costa Blanca property through an agents office, they will probably have their own retained solicitor who you can use for the purchase if you wish, if not you will need to find your own. Make sure you find a solicitor who speaks good English and understands the language well. Your solicitor will be your friend and ally during the entire process of buying and will deal with the sellers solicitor to make sure there are no outstanding debts on the property. If you need to know anything at all, ask, he is there to help you. Your solicitor will be there with you at the signing to ensure everything goes smoothly and he will also help you afterwards with such tasks as changing names on bills and contracts (ie electricity and water). You can normally retain your solicitor afterwards to file your tax returns in Spain.

8. Taxes and Costs - It is essential that you are aware of all the costs and taxes that are involved with buying a Costa Blanca property, as this adds considerably to the overall purchase price. The main expense is Transfer Tax (IVA) which amounts to 6% on top of the purchase price of new property and 7% on resale property. Another tax is Plusvalia which is a tax on the increased value of the land the property is built on (generally paid by the buyer). Then there is a Land Registry fee (around 300 euros) and a Notary fee, which can vary but a guideline price of about 500 euros should be about right (prices current in 2007). You will also have to pay your solicitor (usually in the region of 1,000 - 1,500 euros) and if you are obtaining a mortgage there will also be charges for setting this up (normally 1% of the money borrowed). All in all these costs will add up to an additional 10%-12% on top of the asking price of the property - so allow for this in your budget. After the purchase you will be liable for the following costs:- non-residents wealth tax, paid every year, SUMA (local council tax), community fees (if the property is located on an urbanization), which is for the upkeep of the communal areas ie swimming pool. You will of course also have to take out insurance on the property and contents.

9. Signing the Deeds - The property deed is known as the Escritura in Spain and the signing of this and the final payment for the property is done at the notary office (the notary is an official government representative). You may be present along with your solicitor for the signing or your solicitor can do this in your absence if you have previously given him power of attorney (a common practice in Spain). Before you can sign the deeds you will need to obtain an N.I.E number (foreigners identification number), this can be obtained at any national police station but make sure you ask your solicitor about this long before the signing and he will advise you how to obtain one. Also make sure that you have your original passport with you before going to the notary, also the passport of anyone who is to appear on the deeds.

10. Taking Possession of Your Property - When you have signed the deeds to your property, you should then receive a set of keys. The first thing that I would suggest you do is get the locks replaced on main entry doors, as no matter whether the property is new or resale, various people will have had keys to the house. If the property is new you will want to draw up a 'snag-list' of defects and problems (ie poorly fitting doors, plumbing leaks or badly grouted tiles) and hand this to the builder and the agent so that they can put these thing right. You will now want to put your name onto all the bills (ie water and electricity) and organise some insurance for the property and contents. You may also want to fit security grills and an alarm system.

11. Congratulations - You can now sit back and enjoy your place in the sun - your very own Costa Blanca property.

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