Costa del Sol property: how to choose and buy well

Set an all-in budget

The advertised price is not the all-in cost. For a new home purchased from a developer, Spanish VAT is generally 10% and the general AJD rate in Andalusia is 1.2%. A resale purchase generally attracts 7% ITP in Andalusia. Legal, notary, registry, banking, valuation, furnishing and ongoing community costs sit outside those headline taxes. Reduced rates or a different tax base may apply, so obtain a transaction-specific calculation.

New-build and resale solve different problems

• New-build: modern specification, staged payments and statutory protection for advance payments after the building licence, but completion timing and final specification must be checked.
• Resale: you can inspect the actual home and often complete sooner, but title, debts, community records, licences and building condition need careful due diligence.

Purchase process in seven checks

1. Define intended use, all-in budget and financing limits.
2. Obtain a NIE and prepare source-of-funds documents early.
3. Compare locations before shortlisting individual properties.
4. Have an independent lawyer check title, charges, planning status and the contract.
5. For off-plan property, verify the building licence, special account and individual guarantee before paying.
6. Model running costs and rental income conservatively; confirm licensing locally.
7. Complete before a notary and confirm land-registry filing, utilities and post-completion taxes.

Do not treat a yield range as a promise

A rental model should state nightly or monthly rates, realistic occupancy, management and platform fees, utilities, maintenance, community charges, insurance, vacancy, tax and a reserve for replacement. If those assumptions are missing, the percentage is a marketing headline rather than a decision model.