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QUESTIONS & ANSWERS ABOUT BUYING A PROPERTY IN MARBELLA

Answers written by Christopher Clover. Christopher Clover is graduate cum laude in Economics of the University of Virginia (1969), a permanent resident of Marbella since 1973, and the owner and Managing Director of Marbella’s longest established Real Estate Agency, Panorama, with offices opposite the Hotel Marbella Club and in the Hotel Puente Romano.

LEGAL FORMALITIES & COSTS

A.
This is an “added value” tax based upon the increase of the Town Hall index value of the land only, from the prior (vendor’s) purchase to the present sale. It is usually not a significant amount with respect to apartments or townhouses – less than €1000 for the most part for an apartment or townhouse which last changed hands five or six years ago – but can be more in the case of villas with a large tract of land.

This tax corresponds, by its nature, to the vendor who is responsible for its payment, unless otherwise negotiated. As there are several variable factors used in calculating this tax, especially the length of time of ownership of the property, the amount payable can vary substantially and should be verified before proceeding with the purchase.

The total official costs involved in purchasing a constructed residential property should be around 9-10% for resale properties or around 12% for new properties if VAT is paid on the purchase price, plus lawyer’s fees.

A.
Notary fees can cost up to approximately €1.750 although the cost increases according to the number of pages or complexity of the title deed (e.g. transcription of statutes, payment in stages, property partially finished, etc.). As an example, an apartment costing €300,000 will cost around €546 in notary fees, whilst a property costing €600,000 will cost around €678 in notary fees. Any higher than this amount, the fees go up marginally. The property registry inscription fees also depend on the complexity of the transaction. For example, fees for an apartment costing €600.000 to be registered in the name of one person and purchased without a mortgage loan, will cost around €300. For an apartment with the same sales price to be registered in the name of 2 persons and purchased with a mortgage loan, will cost around €800.

A.
Transfer Tax (I.T.P.) Since April 28 2021, the Regional Government of Ansalusia reduced permanently the Transfer Tax to a flat rate of 7% payable by the buyer for the purchase of any Real Estate (villas, flats, land, commercial premises, garages), provided the vendor is not a developer or normally trading in the business of resale properties (waiver to VAT exemption). 

Reduced transfer tax for real estate companies or professionals that buy resale property and sell within 5 years, at 2%.

VAT at 10% and STAMP DUTY (A.J.D: Actos Jurídicos Documentados, on notarisation of documents, only payable on land and new property sales) has also been reduced to 1.2% – For any VILLA or APARTMENT, or GARAGE that is annexed to an apartment, where the vendor is a developer, promoter or habitual trader of brand-new properties.
 

NEW PROPERTIES:

VAT at 21% and STAMP DUTY (A.J.D: Actos Jurídicos Documentados, on notarisation of documents, only payable on land and new property sales) at 1.2% – for PARCELS OF LAND, COMMERCIAL PREMISES or COMMERCIAL GARAGE SPACES, where the vendor is a developer, promoter or habitual trader. This covers virtually all NEWLY URBANIZED LAND PARCELS and NEWLY BUILT COMMERCIAL PREMISES. This only covers resale properties when the vendor falls into one of the above categories.

 

TAXES

A.
Capital Gains tax on the sale of properties for non-residents is set at 19% payable on profits earned on the difference of the property value between the year of purchase (purchase price plus costs) and the year of sale (sales price minus costs), based on the approved annual percentage increase on the base value approved by law.

All non-resident sellers, regardless of when they acquired the property, are subject to 3% retention of the sales price, paid to the Tax Office by the purchaser on account of the seller and submitting a 211 form, taking this amount for the seller as payment on account of tax due on the income derived from this transmission. Therefore, the acquirer will deliver to the non-resident seller a copy of Form 211 with which the entry of the retention is made, so that the latter can deduct this amount from the tax liability resulting from the income returns. If the amount withheld exceeds the tax liability, you may obtain a refund of the excess.

A.

On September 19, 2022, the president of the Regional Government, Juanma Moreno announced the elimination of the Wealth Tax in Andalucía, making Andalucía one of only two autonomous regions in Spain with the lowest taxes.

 

A.

  • a) Municipal Added Value Tax (PlusValía): Please refer to Part 1 of this article ”Municipal Added Value Tax (PlusValía)”.
  • b) Rates or Annual Property Tax (IBI): Please refer to Part 2 of this article ”Local rates or Annual Property Tax (IBI)”.
  • c) Rubbish Tax (Basura) Please refer to Part 2 of this article ”Rubbish collection & water rates (Basura) (Agua)”.
  • d) Wealth Tax (Impuesto de Patrimonio).
  • e) Income Tax (Impuesto sobre la Renta).
  • f) Capital Gains Tax (Impuesto sobre Ganancias Patrimoniales Inmobiliarias) and Retentions.

OTHER COSTS

A.
The telephone bill is charged monthly. Standard rates vary according to the equipment installed, but can be in the region of €15 per month including a touch dial telephone and ADSL WIFI. A 3-minute call (daytime business hours) to any European Union country, direct dial, presently costs about €0.69 (excluding VAT). Fixed line calls to mobile numbers are in the region of €0.16 per minute per minute. There are many local and national telephone companies that can offer substantial savings to those who wish to spend some time studying the market. ADSL broadband services are available virtually anywhere and ADSL “packages” cost approximately €39per month (plus VAT), including all local and national calls to fixed lines.

A.
Cleaning service is generally available on a full-time salary or hourly basis. Full-time salaries range from €700 to €900per month plus approximately €140 per month social security contributions. Part time help is usually charged by the hour with rates varying from €10 to €15.

A.
Electricity is billed monthly or bimonthly, depending on the area. Minimum rates are applicable whether you are in residence or not, and the minimum varies according to the amount of electricity your house could potentially use with all power and lights turned on. The minimum charge for an apartment might be between €40 and €75 per month. Charges for a villa are from about €100 to €150 per month, depending largely on the extent of the electrical installation. General usage is €0.08 per Kwh plus tax. All rates are exclusive of taxes.

With all the sunshine in Marbella, you will nevertheless be using less lighting and heating than in a lot of other countries!

A.
The upkeep of a private garden is essential to the maintenance of your property and its cost will, of course, depend on its size. As a rough guide, the hourly rate is about €16. A full-time gardener on salary would cost in the area of €1.100 per month, whilst a half-time salary would be in the area of €700. Apartments and townhouses have the communal garden areas tended by a contracted gardener and the cost is included in your community fees. A villa on a plot of 2,500m2 might require a gardener a few hours a week. A large parcel of a full acre or more may require a half or full-time gardener. Social security is an additional cost to full time wages and runs in the area of 40% of the salary.

A.
A standard insurance cost for a €300,000 apartment with contents valued at €48,000 would be €395 per year. One should note that in an apartment building, the Homeowners’ Association is required to insure the building for its reproduction cost. Therefore, the individual’s insurance policy for the apartment need not cover the entire value of the apartment, but only damages to the interior of the apartment, its contents, and third party liability. It is also advisable to insure the building at first risk in case the Community insurance is not comprehensive. For a villa with a reproduction value of €500,000 with contents insured at €180,000 the annual insurance would be in the area of €1,580.

A.
The rubbish collection rate is applied by the Town Hall according to the property and payable every 6 months. For an apartment in Marbella rubbish collection is approximately €180 and a villa approximately €300 per year. Water consumption is calculated by the water meter consumption in cubic meters and is payable every 3 months. Payment can be made directly at the Town Hall or by bank with direct debit instructions.

A.
Local rates are payable annually, and are calculated from the cadastral or rateable value of the land assigned by the Spanish Tax Office. The cadastral value takes into account the value of the land plus the value of the building, according to type, location, and usage. Upon this value, each municipal Town Hall decides on the percentage to be charged in respect of local rates. In the case of Marbella, the formula applied is 0,76% (for 2021) of the rateable value of the property, which is almost always far less than its true market value.

Examples: In 2021, a 2-bedroom apartment in the beachside complex of Marina Puente Romano which is in the heart of the “Golden Mile” paid rates in the range of €1,700 to €2,000 approximately. A free standing, large beachside villa in the heart of the “Golden Mile” paid annual rates of approximately €3,000.

MISCELLANEOUS

A.
Providing that a building plot is situated within an urbanization, or an area zoned within the Municipal Plan for such use, outline planning permission will already have been granted for the construction of a detached home. However, building regulations, which vary considerably, dictate the permissible size of the villa according to the size of the plot. Care should therefore be taken before proceeding with the land purchase that one will be allowed to construct one’s chosen home on it. Panorama will be pleased to provide a list of bilingual architects, and to arrange viewings of some of their previous work.

A.
Marbella has the newest, most modern and well-equipped Regional Hospital in Spain (Hospital Costa del Sol), in addition to a good, well-equipped Clinic with a substantial selection of general practitioners and specialists.

Private medical insurance is available through various groups such as SANITAS. This could cost from €30 to €130 per person per month, depending on their age and the state of their health. Spain’s social security system now allows E.U. residents access to the health network via a special form (E-101). For residents who are self-employed, own a company, or are employees, your social security contributions automatically entitle access to the Spanish health network.

Notes:

Panorama considers the above information to be current and accurate at the time of writing, but it is nevertheless by its very nature abbreviated and intended to serve only as a guide and subject to errors or omissions.

Panorama always recommends purchasers or sellers of property to consult qualified Lawyers and Tax Advisors.

A.
The seller always pays agency fees, unless you come up with a different agreement with your agency. Although the seller remunerates his agency, the agent has an ethical obligation to see that the purchaser gets fair value for money, and at the end of the day, a good agent’s job is to bring the buyer and seller together in harmony. This highlights the importance of working with an established estate agency with a strong reputation. The agency also has an obligation to see that the title deed to the property is passed free of all liens and encumbrances. Panorama provides an exceptional after-sales “settling-in” service for its clients, totally free of charge, as part of general company policy.

A.
Frequently the administrator for the Community of Homeowners will settle these bills, but, if not, it is common practice in Spain to issue standing instructions to your bank to pay them on your behalf.

A.
An urbanization is a planned community which has met the standards of the various governmental agencies with respect of the use of the land (residential, commercial, sports area, green zones), and to providing a specific set of services and a minimum level of quality in the construction of roads, sidewalks, drainage, sewage systems, electricity and water installations, and so on. Obtaining permission to develop land into an urbanization can take a developer up to several years and several million euros of expense. The most obvious advantage to the owner of a property within an urbanization is the fact that the land usage is strictly controlled. If one decides to build a house on a plot in a section of an urbanization zoned exclusively for single-family dwellings, you are assured by law that neither an apartment block nor a rabbit farm can be located on the adjacent single-family plot!

A.
Europeans from the E.U. can stay in Spain indefinitely. Visas are not required for some other countries such as the United States, but are still required in other cases, depending on one’s country of origin, and with varying lengths of stay permitted. Any non-resident residing in Spain 183 days or more per calendar year is considered by the Tax Office to be a resident for tax purposes.

A.
There are several international schools in the area, including one in the Sotogrande area which provides weekly boarding facilities. Pupils are taught in English, and a choice of curriculum is offered between G.C.S.E.s and A-Levels, and the International Baccalaureate.

For further information, check out the below e-mail addresses:

Aloha Collegewww.aloha-college.com
Swans School – www.swansschool.net
Calpe Schoolwww.calpecollegeschool.com
Colegio Las Chapaswww.attendis.com
St. Anthony’s Collegewww.stanthonyscollege.com
The English International College www.eic.edu

For an in-depth guide to schools in the Costa del Sol area, please consult the website:

www.andalucia.com/education/schools/home.htm

A.
A building survey, as it is understood in the U.K., is not necessary in Spain for mortgage purposes. It is nonetheless advisable when purchasing an older property. Common things to check for are the condition of the plumbing and electrical installations, waterproofing, roofing, and so on. These checks, as well as a full structural survey, can be carried out by a Spanish technical architect (aparejador) or indeed by a qualified British Chartered Surveyor. Any fees involved would be to the account of the prospective purchaser.

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