If you are considering buying a property on the Costa Blanca, there are several important things to consider. Whether you want a permanent home, are looking for a vacation home, or are considering a property as an investment, this roadmap will help you better understand the process. From costs to permits and tax obligations to key locations, we explain it all. 

Are you also interested in land for sale on the Costa Blanca? We have several plots of land available, ideal for those who want to build their own home.

1. What Does A House Cost On The Costa Blanca?

The cost of a house can vary greatly depending on location. In general, prices are a bit lower in Costa Blanca South than in the North.

Some average prices per m²:
- Torrevieja: Around €2,300 per m².
- Altea: On average €3,000 per m²
- Luxury villas in Altea and surroundings: Starting from €5,000 per m².

In addition to the price of the property itself, you should consider additional costs, such as:

• Transfer Tax (ITP) or VAT (IVA): 10% in the Comunidad Valenciana.
• Stamp duty for new construction: 1.5% of the purchase price.
• Notary and registration fees: On average €2,000.
• Eventual attorney fees: Depending on the legal guidance you choose.

2. Important Permits and Documents

When buying a house on the Costa Blanca, you need to consider various permits and documents. The most important ones are:

1. NIE number: Required for foreigners buying property in Spain.

2. Building permit:If you are building a new house, you must first have a basic project drawn up by an architect. Then you apply to the municipality for a building permit. Once this is approved, an executive project can be drawn up and construction can begin. This incurs additional architect and license fees.

3. Tourist license: If you want to rent out your property, you must apply for a tourist license. More on this in point 6.

3. Tax obligations when buying property in Spain

There are several tax obligations when buying a property in Spain:

• Transfer tax: 10% for existing properties.
• VAT (IVA) for new construction: 10% + 1.5% stamp duty.
• Real Estate Tax (IBI): Annual tax based on the cadastral value of the property.
• Property tax: Depending on the value of your property holdings.
• Income tax: If you rent out your property, you have to pay tax on the rental income.

4. Buying Land Only: What Do You Need to Know?

If you are buying land alone, there are additional considerations:

1. Buying from a private individual? Then you'll pay 10% transfer tax.
2. Are you buying from a company? Then you'll pay 21% VAT (IVA).

To build a home, you must first have a basic project made, for which you apply to the municipality for a building permit. Once the building permit is approved, an executive project can be drawn up and construction can begin.

There are additional costs for the architect and license fees from the municipality.

5. What Locations Are Popular On The Costa Blanca?

The Costa Blanca offers a wide range of locations for buyers. Popular areas are:

• Altea: Famous for its quaint old town and luxury villas with sea views.
• Moraira: A charming coastal village with exclusive homes and a relaxed atmosphere.
• Calpe: Known for its impressive Ifach rock and beautiful sandy beaches.
• Torrevieja: A lively town with a wide range of homes and excellent amenities.
• Benidorm: Ideal for those seeking a vibrant city life, with modern apartments and skyscrapers.
• Denia: An attractive port town with direct ferry connections to Ibiza.
• Javea: Popular among expats because of its combination of nature, beach and a friendly atmosphere.
• Villajoyosa: Unique because of its colorful houses and quiet beaches, ideal for a second home.

View our current offerings at Select Estates Spain.

6. Tourist License and Rental: What Do You Need to Know?

If you want to rent out your property, a tourist license is required. Not all properties qualify for this, so check in advance.

How to apply for a tourist license?

1. Check with the municipality for rental conditions.
2. Submit the application to the competent authority.
3. Wait for approval.

It is advisable to outsource this process to a lawyer or gestor, as there is a lot of administrative work involved.

7. Extra Tax obligations with Property Ownership in Spain

In addition to the taxes you pay upon purchase, there are also annual taxes that apply to homeowners in Spain.

- Property Tax (IBI): Due annually, depending on the cadastral value.
- Income tax for non-residents: Even if you don't rent out the property, you pay a small percentage tax on the notional rental value.
- Tax on rental income: If you rent, you pay income tax. Residents can deduct certain expenses.
- Wealth tax: Depending on the value of your property holdings in Spain.

Conclusion

Buying a property on the Costa Blanca is a great opportunity, but requires a good understanding of costs, permits and taxes. This roadmap will help you be well prepared and avoid unexpected costs. Want help finding your dream home? Engage certified real estate agents to purchase a home. The real estate agents at Select Estates Spain will guide you through every step of the process.

Frequently Asked Questions

1. What are the main steps when buying a house on the Costa Blanca?
The main steps are: determining your budget, finding the right location, checking the legal status of the property, arranging an NIE number, and hiring a lawyer. After finding your home, you will need to sign the deed of sale and pay the transfer tax.

2. How much transfer tax do I have to pay when buying a home?
The transfer tax is usually 10% of the purchase price for existing homes. For new construction it can be 10% VAT (IVA).

3. What documents should I arrange for the purchase of a property in Spain?
In addition to your NIE number, you also need the deed of sale (Escritura Pública), proof of payment of the transfer tax and registration in the Land Registry. It is advisable to hire a lawyer to make sure that everything is legally in order.

4. Can I get a mortgage for a property on the Costa Blanca?
Yes, it is possible to get a mortgage from a Spanish bank, but you usually need a down payment of 30% to 40%. Banks offer mortgages for non-Spaniards, but conditions may vary.

5. What is the difference between buying a property as a private individual and buying a commercial property in Spain?
When buying a property as a private individual, you pay 10% transfer tax, while buying a commercial property is taxed at 21% IVA (VAT). This can be an important consideration depending on your purchase plans.

Are you ready to find your dream home on the Costa Blanca?

Contact the experts at Select Estates today! We'll guide you through the entire process, from finding the right home to closing on your purchase. Schedule your free consultation now and start your adventure in Spain!