Tax Guide: Foreign Property Buyers in Marbella

When buying a property in Marbella as a foreigner you must be aware of a few details you will encounter on your journey as a buyer. Our team at Homerun Brokers has prepared a list to help you with get acquainted with the initial process.

Obtaining a NIE number, an all-purpose personal identification number which includes a tax code that is assigned to you, as an expat in Spain. It is the first necessity that will be applied all your administrative official proceedings with Spanish authorities such as; property purchase, tax payments or opening of a business in Spain which includes your social security. Your lawyer will assist you in receiving the NIE number needed to complete the property purchase. Including setting up a cita previa for your initial visit to the police station. They will also accompany you on the day and help you prepare your list of documents necessary for the police station. On your visit you will submit your finger prints and in two weeks return again to receive your NIE card.

How to buy a property in Marbella as a foreigner is a personal decision. The two most obvious choices are either an investment purchase or a private purchase. Both formats have slightly different purchasing procedures and the tax regulation is applied differently. At Homerun Brokers we often say that if you’re buying as an investor you must lead with your brain but if you’re buying a private residence you must lead with your heart.

In house legal advise is easily obtainable through Homerun brokers. Lawyers usually ask for 1% of the property price, in some cases it is negotiable and in others you can chose  to be  charged by hourly. If for some reason you are not able to be personally present at the contract signing, you can obtain the “power of attorney”, where your legal representative will be attending the signing on your behalf.

Reservation contract is signed upon placing a reservation fee on your chosen property, which we expected to be between 6000€ – 20.000€. The transfer will be made through the lawyer’s client account and ensure the removal of your property from the open market. Your legal representative will be monitoring the process all the way through.

Due diligence will be carried out within 14 days, post signing of the reservation contract. Your agent and lawyer will make sure that the property is fully prepared to welcome you as the new owner.

Some of the necessary check points include: the current legal status of your property, making sure that the property is free of debts, ensuring that there are no outstanding debts on the utilities and the existence of planning permission in the case of you planning an immediate extension or modifications to the house.

Purchase contract/ title deed signing will usually happen 14 days post the reservation fee transfer and the completion of due diligence, in the notary of Spain. Notary fees are expected to be between 500€ – 800€. This is the stage when the outstanding balance of the property will be payed and you will receive the Copia Simple or Nota Simple. Making you the new owner of your dream home in the Mediterranean.

Title registration/ Land registry
As soon as you receive the title deed your details will be sent to the Land Registry and the utility companies informed of the name change. The registration fee will come to approximately 300€ – 500€

Taxes
Our team at Homerun Brokers will fully advise you on the details of the tax payment on your particular property purchase.
In total, usually, we would suggest to calculate an additional cost of 12% -14% onto of the agreed selling price.

VAT / IVA is calculated at 10% on its first ever purchase, which will include a stamp duty consisting of 0.5% to 1.5% depending on the region.

Resale tax would usually come to 10% but post covid lockdown the Spanish government lowered the sales tax to 8%, as a form of incentive for the foreign buyer. This temporary adjustment will be active until December 31st, 2021

If you chose to rent your property you will need to obtain a Tourist Licence and pay a separate tax, that will be calculated based on the yearly income total.

Demand for buying a property in Spain has risen dramatically after the country reopened post Covid-19 lockdown. Costa del Sol has always been a highly sought out location for a holiday home in the Mediterranean, and with the recent events, has become even more so.

If you are one of the people who has fallen in love with Spain and its notorious sea side lifestyle, beginning to look at a property to buy in a foreign country as a foreigner can seem daunting at first.

The key to a successful purchase is a prestigious local property agent, like Homerun Brokers.  At Homerun Brokers we are dedicated to delivering to you a pristine and simple execution from property search to legal arrangements until the handing of the keys.

When you reach out to us our initial meeting will be a discovery session where we create a buyers profile assessing the details of your needs and budget. Based on information gathered from this meeting we will then begin the prepare your search portfolio which will usually consist of approximately 10 options. In some cases we do not even go through the full list as we hit the mark with the first three options and in other’s we widen the search to our client’s satisfaction.

It will be relevant to add that we work with the open market, which gives us access to all of the available properties on the coast. This data base is accessible by all agents on the Costa de Sol, which means that going with multiple agents will not necessarily give you an advantage but instead, going with an experienced and strategic agent, like Homerun Brokers will be more likely to deliver to you the result that you expect.

In addition to open market source, we also have privileged access to exclusive properties that haven’t hit the market yet. This is due to good ongoing relationships with developers and investors on the Costa del Sol. In this case we can guarantee that your property search portfolio will include some locations unavailable to other property agents in Marbella.

The key to our success lies in the pre- work or what we call, our discovery meeting. We listen carefully to the desires of our buyers and most importantly, our team has a knack for reading between the lines. Oftentimes what our clients believe they want or need to be happy in their dream home turns out quite different in the end.

When you’re moving to Spain from a foreign country you may not have had a full immersive Spanish lifestyle experience, which Marbella serves to you on the silver platter. It is a balanced mix of family, business and social life surrounded with a community of international go getters. Not to mention the spectacular contrast of Sierra Nevada and the seafront, literally enabling you to enjoy a fresh ski slope in the morning and a sunset over the Mediterranean sea on the same day. When you buy a home in Spain you also buy into the lifestyle, which is renowned throughout Europe. To find out more about Marbella lifestyle visit this link.

Types of properties you can expect to find on the Costa del Sol
Beach houses are a must view on the Marbella coast. The will range from self sufficient villas to detached and semi detached houses as well as apartments in edificios which usually include a pool and garden. Scandinavia style refurbishment is very popular in Marbella. Elegant functional minimalism with natural textiles and colour scheme.
Rural fincas are a suitable option for the country side lovers with plenty of outside space and a delightful opportunity to enjoy the fruits of Mediterranean land. Lemon, orange and olive trees as well as fig and pomegranate are but a few that are scattered all over Spain’s rural land.

It will be relevant to add that we work with the open market, which gives us access to all of the available properties on the coast. This data base is accessible by all agents on the Costa de Sol, which means that going with multiple agents will not necessarily give you an advantage but instead, going with an experienced and strategic agent, like Homerun Brokers will be more likely to deliver to you the result that you expect.

In addition to open market source, we also have privileged access to exclusive properties that haven’t hit the market yet. This is due to good ongoing relationships with developers and investors on the Costa del Sol. In this case we can guarantee that your property search portfolio will include some locations unavailable to other property agents in Marbella.

The key to our success lies in the pre- work or what we call, our discovery meeting. We listen carefully to the desires of our buyers and most importantly, our team has a knack for reading between the lines. Oftentimes what our clients believe they want or need to be happy in their dream home turns out quite different in the end.

Rustic luxury villas tend to keep their traditional Spanish architecture and renovate the space around the traditional look, keeping the wooden elements such a the roof and beams, thick white walls and typically adding minimalistic and modern grandeur through the interior.

Modern luxury villas can be seen as contemporary works of art, boasting sunset sea views, spectacular floor planning and unexpected design elements. Including a wide range of entertainment areas such as saunas, indoor cinemas, gym rooms and alike.

New developments are plenty on the Costa del Sol and differ from the resale purchase. To find out more visit our post.
Andalusian style homes tend to be the perfect refurbishment project. If you enjoy the process of flipping properties this may be the perfect option for you.

To find out more about locations in Marbella and types of properties you can expect to find in the corresponding area please read Location Knowledge is Key.

The feeling that you will get once you walk into the property that is made for you is inexplicable and will let you know immediately that this is your dream home. Our expertise has shown us many satisfied buyers with whom we still maintain a wholesome professional relationships, who have all experienced this extraordinary feeling of “coming home”. This will be your prelude to making an offer, which is usually below the asking price.

We aim to host an interview with our in-house lawyer, where they will disclose the most frequently asked questions during the process of buying a property in Marbella as a foreigner, which will be featured in our up coming blog posts. Sign up to our newsletter to receive updates for your buying journey.

Our team at Homerun Brokers will be happy to walk you through the process and answer any additional questions. We personalise each case to ensure smooth deal closings and easy transactions. We will be there every step of the way with you hit a home run when purchasing your dream home in Marbella.

Contact us now and one of our agents will gladly take care of your request.