Frequently asked questions regarding buying new build homes on the Costa del Sol
We have created this frequently asked questions section regarding buying off-plan properties and new build homes on the Costa del Sol, as believe that working with a real estate agency should be straightforward and easy.
This free guide has been designed to help you learn more about the process of purchasing a new development property in the entire Costa del Sol region, including popular areas like Benahavís, Benálmadena, Estepona, Fuengirola, Málaga, Manilva, Marbella, Mijas, Sotogrande and Torremolinos.
We´ve done our best to help answer common questions that we´re asked by our clients to give more insight into how the buying an off-plan property world works in the Costa del Sol, so that all your new build homes questions are answered.
We have also included Pro Tips to help buyers improve their experience when purchasing a new development property. If you have any other type of enquiry, let us know, we will more than happy to help.
Costa del Sol new build terminology:
An off-plan property or new development property are similar in the sense that both terms refer to a new build home that has not been built yet or has never been lived in. Normally these types of properties are sold when the plans have been approved and during the construction process, before they are completed.
As new build homes have never been lived in, taxation wise the tax new properties pay is VAT (which in Spain is of 10% of purchase price), while resale properties pay ITP Tax (Impuesto sobre Transmisiones Patrimoniales, in English Property Transfer Tax), which in Andalucía now starts at 7% of purchase price.
Pre-launch prices are special discounts that property developers offer to start creating interest at the early stages of the commercialization of a new development. The discount is available for a short period of time and for only a certain number of off-plan properties. Normally, during pre-launch prices, the developer has not started land movement on the project and has just applied for a building license; therefore the completion date is the longest expected out of the whole building process.
As new build homes are normally built in phases, what´s key into buying at pre-launch prices is that by purchasing at early stages, you will be obtaining a large discount on what the final price of the property will be. Normally the discounts offered during the pre-launch period are around 25% to 30% of what the final price of the property will be.
Pro Tip: Purchasing an off-plan property during pre-launch offer, means you have possibility of choosing some of the best properties within a particular development, compared to later stages of the construction when most properties have been reserved or sold and prices have risen.
A soft-launch offer on a new build differs from a pre-launch offer in the sense that during the stage of the soft-launch offer there is some work carried on the land the complex with be built, for instance, the cleaning the plot where the construction will based is being carried, the land movement to start building the foundations of the complex is underway and the roads has been paved if they were not there, as well as the building licenses have been applied for, although the developer is still waiting for approval.
Soft-launch offers are very attractive, although one is still at the early stages of the construction, as the initial work has begun and the developer will have a very close estimate to what the final completion date for the complex will be. Discount offered during this stage of the construction are around 15% to 25% over the prevailing market value.
When clients start home searching over the internet or visit new-build complexes they will sooner or later came across the term “luxury new development”, but many clients wonder, what does it mean?
The 10 must-have elements for any luxury new build home are:
1. Prime Location: Any high-end luxury off-plan complex is built in a very exclusive and attractive location. Developers will search for the best plots available in the market in order to create the most desirable new complexes. We often find luxury new developments built in a frontline beach position, frontline golf position, and exclusive neighbourhoods or in prestigious private residential estates.
2. High-end finishes: Luxury new developments are constructed with a special emphasis on providing the best high-end materials, which are long-lasting, timeless and have an elegant minimalist touch. Developers will work alongside some of the most reputable architects and designers to mix natural materials and create the finest open-plan living environments.
3. Personalisation: Another important feature of any luxury new build home is the possibility of tailoring different options, including selecting the finishes, textures and layout design, as providing the possibility of personalising each home gives that uniqueness which is a must for these type of homes.
4. State-of-the-art technology: In order to continue to be at the top of the market, with today´s continuous technological innovations, luxury new developments must include everything a homeowner may require to make life as comfortable as possible. Top-notch home automation built-in devices with wireless connections that can control every aspect of a home from a smart phone or tablet, even if the user is located on the other side of the world are a fundamental requirement.
5. Privacy: In today´s frantic world, people are in the continuous search of an oasis of tranquillity; this is one of the main reasons offering the ultimate privacy and seclusion has become a necessity for many home owners looking for a luxury lifestyle.
6. Sustainable living: Ostentatiousness is no longer fashionable amongst wealthy buyers, as they are more conscious about the impact on the environment. Sustainable living and healthy settings are the trend to follow when luxury new developments are being planned. Most brand-new luxury home residents are more concerned with energy-efficiency homes, recycling building materials and prefer to adopt an eco-friendly and healthy living attitude towards life.
7. Security: In order to be included in the list of exclusive new developments, top security systems must be included in the homes, not just to protect residents against any possible security issue, but also to protect owners against any possible ecological damage like fire, flooding or gas leaks.
8. Wellness: For any property to be considered a luxury good, developers must design homes adapted to living healthier lives. We are not just talking about air-quality, natural lighting or acoustic soundproofing, but luxury new developments must provide an environment where residents find green spaces, exercise facilities and spa areas, in other words, a sanctuary for body and mind.
9. Concierge: To be able to live the best possible lifestyles, luxury new developments, must offer a variety of concierge services to help owners in day-to-day activities. The best complexes will assist residents with finding cleaning services, book restaurants, golf rounds, private chefs, personal trainers amongst many other services.
10. Functionality: Another important characteristic for these types of properties is that they are not just designed to have character, but they also need to cater different needs to different generations under one roof. These properties usually include indoor and outdoor entertainment areas, as well as children´s playroom, working areas for parents, resting areas, as well as extra accommodation for family and friends, in such way that the property is very functional for every type of activity.
Flipping an off-plan property is a term used in real estate in which the strategy involved includes reserving a property, signing the private purchase contract and paying instalments (usually between 20% to 30% of purchase price), with the only intention of placing the property back on the market and reselling that property with a profit during the construction process before completing on the property. This process normally occurs when most properties within a certain new build complex have been sold and there is very little left within that particular complex.
Pro Tip: Rising prices in off-plan properties, especially after pre-launch prices, make it very attractive to consider flipping as the best short-term real estate investment strategy, however, investors should take into consideration market conditions and only invest in a property when they are certain they can complete on it. Certain developers in Spain have special clauses in their contracts where flipping is not allowed to avoid competition with their own properties. If this investment strategy of interest to a client, we do know which new developments will allow to resale properties before completion.
A deposit on an off-plan property is an amount of money which is paid to the developer to reserve a property on a new development and take off the market on the buyer´s name until all legal searches have been carried on a particular new development, so that no other customer can purchase that same unit during this process.
Pro Tip: The holding deposit is always refundable should there be any issues with the licenses, building permits or delays with the completion date.
An off-plan reservation contract is a private agreement between the developer and the purchaser which states the intent of selling and purchasing an off-plan property. The 15 must-have elements of an off-plan reservation agreement are:
1. Name of purchasers.
2. Marital status of the purchasers.
3. Name of developer.
4. Description of the complex.
5. Address of the property within the complex.
6. Deposit amount.
7. Property price.
8. The schedule payments during construction and completion.
9. Buying costs for the purchasers.
10. Selling costs for the developer.
11. Duration of the contract.
12. Money Laundering information.
13. Data Protection information.
14. Effects of the termination of the contract.
15. Date of completion.
Pro Tip: A proof of deposit payment is required for the reservation contract to be valid.
An Off-plan Private Purchase Contract (in short PPC) is also known as an Exchange of Contracts is a legal binding agreement which commits the developer to sell a particular property and the purchasers to buy that same property.
The 40 must-have elements of a Private purchase contract are:
1. Name of sellers and buyers or their legal representatives.
2. Description of who each solicitor legally represents.
3. Description of the location of the development, size and neighbours.
4. Building coefficient of the plot.
5. Property title.
6. Charges on the plot (when applicable).
7. Cadastral reference number.
8. Land Registry information.
9. Lease situation (whether it is occupied or not).
10. Description of the complex with all the volumes.
11. Annex of the building license.
12. Address of the property and size.
13. Address of the garage and size (if applicable).
14. Address of the storage and size (if applicable).
15. Annex of building specifications and quality finishes.
16. Authorization for the developer to request the final works certificate.
17. Clause regarding the property being sold free of charges, encumbrances or occupants.
18. Clause of possibility of mortgage subrogation (if applicable).
19. Sales Price.
20. Purchase costs of the property.
21. Selling costs of the property.
22. Payment schedule during construction and completion.
23. Clauses regarding the delivery of the dwelling.
24. Maximum date of completion.
25. Clauses regarding the right of the purchaser to inspect the property.
26. Clauses regarding vendor obligations.
27. Clauses regarding the regulation of information for the consumer during the sales process.
28. Information regarding the builder.
29. Floor plans, property description and all related information of the property.
30. Bank guarantees details.
31. First occupation license information.
32. Information regarding the community of owners.
33. Information regarding breach and contract termination for all parties.
34. Expenses and taxes.
35. Utility expenses.
36. Information regarding decennial damage insurance.
37. Data protection information.
38. Clauses on snagging and repairs.
39. Information about notifications.
40. Information regarding courts and tribunals in case of dispute.
Pro Tip: Using a registered local solicitor and giving them power of attorney will facilitate the whole purchase process, as a legal representative will check all the information stated in the Private Purchase Contract in order to protect their client´s best interest. A solicitor will not sign a Private Purchase Contract on behalf of the client, without prior written permission from the buyer. We always suggest signing power of attorney in Spain rather than in a foreign country as it is cheaper and less arduous.
An off-plan completion is one of the most desirable moments of the purchase process. It is the moment a new-build property is finished, the snagging has taken place and the licenses are in place, so that the new owners can enjoy the property they have been waiting for. It is also the moment in which the buyers pay the outstanding balance and obtain the keys of the property while signing title deeds at notary.
Pro Tip: If a power of attorney has been granted to a solicitor, buyers will not have to attend completion at notary and they will be able to wait until their new build property is fully furnished before coming over and moving in, without having stay elsewhere until the property is fully functional.
A snagging on a new build property is a report on any defects a buyer may find on a new build property when the works are finished by the builder which is done either prior or after completion. A new build home may have minor imperfections on terminations and it is up to the builder to fix them. Purchasers normally prepare this report and check the works have been fixed prior to moving into the property.
Pro Tip: We recommend using the services of chattered surveyor to carry the inspection on behalf of clients as they are more likely to spot defects than most home owners. Inspectors will check on possible structural issues, water pressure, drainage, doors, floors, windows, wardrobes, electrical installations, paint, appliances, general finishes both indoor, outdoor and communal areas.
Frequently Asked Questions regarding new build areas and propety types on the Costa del Sol:
We work alongside with some of the most respected and reputable property developers on the Costa del Sol, making sure that all licenses and permits are in place, prior to offering them to our clients.
Sur estates offers an unrivalled portfolio of new build homes on the Costa del Sol. We are currently offering more than 200 off-plan projects, new builds and new developments between Malaga centre and the province of Cadiz.
Whether you are looking to purchase a modern apartment in a city centre, an off-plan frontline golf villa, a new build beachfront penthouse with astonishing sea views, a contemporary townhouse walking distance to amenities or a plot with licenses in place to develop yourself, we offer every type of off-plan property available for sale in the Costa del Sol region.
With a portfolio of more than 200 new developments being under construction at the moment, Sur Estates is able to offer new build properties in all areas of the Costa del Sol.
We specialize in new development properties located on a beachfront position from the town of Malaga, all the way to province of Cadiz. Most off-plan developments being built in this prime location are contemporary in style, high-end properties built with most refined materials.
With more than 60 golf courses on the Costa del Sol, 15 of which are located in Marbella, 12 in Mijas, 9 in Sotogrande, 8 in Estepona, 8 in Benahavís, 3 in Casares, 3 in Malaga, 1 in Ojén, 1 in Manilva, 1 in Alhaurín el Grande, we have a high demand from clients purchasing in new developments being built on a frontline golf position and we are able to cater all property needs in any of the mentioned areas.
Our high-end market of new build villas focuses on offering properties in the best areas of the Costa del Sol. We have access to the newest villas available for sale in private luxury estate like La Zagaleta, Los Flamingos, El Madroñal, Sierra Blanca, Cascada de Camoján, los Monteros and the Golden Mile, amongst other areas of the Costa del Sol.
Pro Tip: With so many different new build projects being built along the Costa del Sol it is difficult to understand which neighbourhoods have a better growth in term of services and potential of improvement, always ask a local specialist to assist you in understanding what the area has to offer first, before concentrating on the new development itself.
Yes, over the recent years property developers have created some of the most amazing resort-style luxury new developments offering owner’s exclusive access to 5 star services and amenities. Many new developments focus on all aspects of modern living, not just on the size and quality of the dwelling, but also encourage living healthier lives by offering a great range of services and amenities within the community.
There are several luxury new developments on the Costa del Sol which have become extremely popular amongst local and international investors, as they offer high-tech gymnasiums, indoor and outdoor swimming pools, tennis and paddle tennis courts, volleyball and basketball courts, kid´s club, chill out areas, green areas, spa areas with a hydro-massage circuits, sauna and Turkish bath, bars and restaurants. Most luxury new developments also offer professional services, such as beauty treatments, masseurs, yoga classes, Pilates classes, Tai-Chi classes, tennis lessons, swimming lessons, amongst other services.
Many residential new-build complexes also contain a business centre offering the possibility to work without the necessity of leaving the complex. These working environments have areas where owners can meet clients, network, work on projects with latest technical equipment available and all the professional support required.
The timescale of the construction of a new build home varies according to the size of the development, the type of properties that are built and the location where new development is being built.
In the case of apartments, townhouses and semi-detached villas, on average new developments take between 18 to 24 months to complete from obtaining the building license. New-build villas tend to take a little bit less, between 12 and 18 months, from the first earth movements on the plot, depending on the size of the project, however, there are specialized developers who can delivered a tailored contemporary new build modular villa in just 6 months with all the licenses, insurances and building guarantees.
There are several factors why purchasing a new build property is beneficial:
- New development properties tend to be cheaper than pre-owned homes (between 20% and 30% below market value).
- With the latest materials used in construction these days, most new build properties come with many features like aero thermal equipment, better insulation systems, larger windows, amongst other features, which also make homes more eco-friendly and have better energy efficiency compared to older homes, off-plan properties are also cheaper to run.
- New development properties are adapted to modern living as most off-plan properties these days are designed with open plan layouts forming a single living space (kitchen, dining area and living room all together creating one large room) and large outside spaces.
- When purchasing an off-plan property, you are able to choose certain aspects of the design, as most developers offer the possibility to personalise your property to your requirements. Buyers are allowed to choose from a wide range of customization options. As a standard practice, developers allow choosing the kitchen colour and layout, type of flooring and types of bathrooms tiles.
- Many developers include a list of extra features, like installing a Jacuzzi, a swimming pool on the garden or terrace, create a chill out or barbecue area, amongst many other features to upgrade new build homes. Developers even consider any changes within the property, from minor layout changes to more substantial alterations.
- As off-plan properties have never been lived in and everything is new, including all the appliances, fittings and fixtures, new build properties require less level of maintenance for several years compared to older properties.
- Buying an off-plan property offers the possibility of having lower upfront costs, as some developers require only 20% down payment before completion. This also translates to purchasing a property at a much higher value than its original purchase price, with much lower initial investment.
Some clients wonder, why should they purchase an off-plan property? What are the benefits? We have come up with the top ten advantages of purchasing a new-build home:
One of the most important advantages when thinking of buying an off-plan property or a home in a new development is that new properties in Spain come with a 10 year structural guarantee. Most developers also offer a 2 year warranty on kitchen appliances and a team to fix any issues that may come up when the new owners do the snagging list, prior to completion, but many developers will extend the snagging a property until the first year through their after-sales department.
2. Design input:
Another added benefit that we see more often appearing on new development properties is that if buyers reserve a unit at the early stages of it being launched, they can choose their own fittings and fixtures (in the kitchen and bathrooms for example), flooring, tiles, and so on, without having to refurbish for instance, like in certain second hand homes.
3. Higher Energy Efficiency:
Compared to properties which are, for example 20 years or older, new development properties have to follow minimum standards of energy efficiency. Many of the new developments on the Costa del Sol these days come with international certificates, such as Breeam Certification. This also translates to saving money in the long term, as the running costs are lower.
4. Modern Layouts:
The way we live today has changed a lot over the last 30 or 40 years and new development properties are designed to accommodate to today´s technology and lifestyle. For instance, today´s open concept living areas allow socialization between kitchen, living and dining areas, compared to older homes with closed rooms, which was formal way of living, a trend of a few decades ago.
New developments take into account the latest trends regarding new technologies and enhancements. These days most new built homes include satellite television wiring, high speed internet connection wiring, sound proofing, surround systems, insulation, alarm systems amongst many other features, like domotics systems.
6. Lower maintenance:
For the first few years a newly built home will require little to no maintenance. This is especially important for second residence home owners, when they come to spend their holidays on the Costa del Sol. New-built home owners spend time enjoying their home, rather than doing maintenance in their property.
7. Safety and security:
New build homes come with higher security levels, for instance, in gated complexes they normally offer controlled access, security guards, alarm systems, cameras, allowing, for instance, residents to relax while their children are able to play outside.
Many of the older communities offer little (like a communal swimming pool) or no amenities. New developments being built these days, have communities which include, club houses, concierge services, tennis courts, paddle tennis courts, children´s pools, children´s playground, fitness areas with gym, sauna, co-working areas, Turkish bath and Jacuzzi, bbq areas, social club areas, putting areas, etc.
9. A fixed price:
Buying a new development property requires you to pay a fixed price over the period of construction. Normally new developments take anything from a year to two years to complete. On the Costa del Sol this translate to having to pay an initial deposit and then installments that go up to 30% of the selling price, having to pay the balance on completion.
On the other hand, purchasing a pre-owned property may require restoration or renovation costs on top of your purchase price. A brand new home allows you to move in straight away and no renovation is needed.
10. Investment potential:
Buying an off-plan development offers fantastic investment potential. Often developers launch pre-launch prices which will increase as the development is being sold. At early stages, this is a great option, as considerable profit can be made in a relatively short space of time.
Pro Tip: These are just a few examples of the advantages of buying a new home on the Costa del Sol, for more information regarding purchasing an off-plan property, buying on a new development or any information regarding new homes on the Costa del Sol do not hesitate to contact us.
Purchasing an off-plan property may have a series of potential drawbacks, so it’s important to team up with a real estate firm to assist you in the purchase in order to avoid them in the best possible way. We have come up with a list of the top four disadvantages a buyer should consider when buying an off-plan property, especially, if one is not familiar with all the new developments in the area they wish to purchase.
1. You can’t see what you are purchasing:
Purchasing an off-plan property often means having to use a lot imagination to decide whether a property that isn’t physically there will be an ideal future home. Certain clients have difficulty in doing so, especially if there is a difference is the measurement system, for instance, to image the size of a room that appears in the metric system, having to image it in the imperial system. In order to minimize this disadvantage, it’s important to visit new developments which do have a show flat or show house in them, as not only clients will have a better understanding of sizes, but they will also be able to see and feel all the finishes in the kitchen, living room, bathrooms and all the other areas of the property furnished to better calculate space. In cases where a show flat or show villas are not available, buyers can refer to the floor plan to obtain a better understanding of measurements.
Pro Tip: Although floor plans are a great way to understand the layout and size of an off-plan property, the best practice is to translate these measurements onto an open space and mark all the corners, so that one can move in them to fully understand the size of the measured living space. One has to take into account that marking these spaces without furniture in them will make the area look smaller, just like unfurnished homes.
2. Not all developers are alike:
With so many new development options available on the market, special attention has to be placed on who will be constructing the off-plan project, as there is a great difference between developers. When starting to look at the diverse options of new build projects available, clients will come across great infographic material, including wonderful brochures, pictures, 3d designs, etc, as companies have evolved and the majority of them use top marketing tools, but customers have to look past these and focus on the quality of the construction being built.
Unfortunately on the market there are companies with little or less building experience, than those companies that have been around for a long time and have a strong reputation for delivering quality homes. With such a diverse level of reliability and quality in the sector, it is important to team up with a real estate company that has the experience and knows all the projects that have been delivered by these developers that are currently constructing new homes.
Pro Tip: When visiting a new development, clients can ask developers to give them a list of the portfolio they have built, they can even ask their estate agent to show them some resale properties in the complexes these developers have constructed in the past, so that clients can see and feel how the quality of the finished product is, even if the materials and finishes have evolved over time, they will have a better understanding of the quality of the properties these developers have built build are going to be.
3. There might be delays in delivering the new development:
In certain new development projects, delays in delivering an off-plan property may occur. These delays in the construction do not necessarily start when the developer has begun land movement to start building, as certain developers will wait until at least 30% of the development has been reserved before starting construction, even if they have a building license in place. In other cases, the developer will wait until a certain amount of properties have been reserved to request a building license and start the work, therefore also setting back delivery date.
In the case of new development villas, some developers will wait until the future owner has tailored the design of the property to present the plans to the town hall for approval. In other scenarios, the developer has to wait to receive a building license back to start building, as the town hall has too many applications to reply in a timely manner. In other words, delays can occur before the work even begins.
During the construction process, delays may happen for different reasons, such as shortage of labour, delays in the delivery of the materials, too many projects taken underway by the developer, weather conditions, amongst many other motives.
Once the new build has been officially finished, setting back completion date may occur as there are too many complexes finished at the same time, therefore town hall inspectors, fire department inspectors, may take longer time than expected to verify the construction has been built according to the building license and for the public administration to grant first occupation license.
In other words, there are many reasons why new build homes may fail to meet their original deadline.
Having said this, developers wish to complete and deliver their new build projects on time, as the majority of contracts have different clauses that protect buyers against delays.
Pro Tip: Delays in the delivery of a new development, may translate to not having the expected finishes for the purchased property or a longer list for the snagging. It’s highly recommended to team with a real estate firm that knows the works of the different developers and can share their knowledge with clients, as it does not cost them extra money to purchase directly or through an estate agent, but it may save a lot of hustle and disappointment if the least experienced developer or real estate agent are chosen.
4. The complex could be a building site for a long time:
It´s always important to ask the question of whether the there are any plans of extending the new development one is visiting or if it will be will built in phases, as both options have become very popular amongst developers. It´s key to choose the right new development when thinking of purchasing an off-plan property, as if it´s wrongly planned by the developer or the market does not respond as expected, purchasing a new build in a development built in phases could turn into a very disturbing scenario. Buying into a larger new development could mean that it takes several years for the whole complex to be finished; hence, the buyer would be living in a building site for a long time. This would most certainly mean, having to deal with living in an environment which is surrounded by dust, noise, trucks and everything that implies living near a building site.
The same issue may occur in a development of villas, if the developer chooses to build the homes as they are being reserved, depending of the size of the project, it could take several years for the whole complex to be finished.
Pro Tip: In order to minimize the possibility of choosing a new development that may take years to be finished as it will be constructed in phases or to choose a new build in an area where several new constructions may take place in the near future, it is ideal for clients to request their estate agent or solicitor to review the town planning around the area they wish to purchase to understand, if necessary, what will be possibly constructed around the complex in the future.
Regardless of whether you are considering to purchase a new build home to use as a permanent residence or to use it as a holiday home, we have come up with the top ten tips to purchase your ideal off-plan property on the Costa del Sol in the best possible way:
1. Make a wish list:
Deciding to purchase a new home is a very exciting experience and making a successful purchase is one of those life accomplishments that makes everyone proud. Naturally, it is important to think of the property requirements, like number of bedrooms, number of bathrooms, terrace or garden size and orientation, but we recommend our clients not to stop there, we encourage everyone to make a wish list, not just with the basic requirements, but to include all those desires that a person would like to have fulfilled when looking at a brand new property as well as considering their property needs within their lifestyle. Although it is unlikely that anyone, regardless of their budget, will find a property that ticks all the boxes on their wish list, this simple exercise will help clients focus on those brand new complexes that will work for them.
We always recommend our clients to ask themselves questions like: Will I require a separate area to telework? Do I require public transportation nearby? Do I need schools nearby? Which would be the preferred orientation for my new build home? Do I prefer an enclosed or open plan kitchen? Do I require on-site facilities like gym or spa? Do I want to live close to a pet-friendly beach? How long am I willing to wait for the perfect property?
Pro Tip: Come up with a list of requirements, review them, place the most important items on top of the list, ask yourself the questions and come up with a list of priorities before start looking at any new development, this way you will a clearer picture of what you want and most importantly, what you do not wish to have when purchasing a new build home.
2. Think of a budget:
Another key aspect of the when purchasing a property is of course, price. What am I willing to invest? How will I come up with the funds? Will I need finance to complete on the new-build? Do I have to sell before I buy? These are some of the most important questions for most of us and it’s key to come up with a general idea from the very beginning. We recommend coming up with a figure that a client can afford, without having to stretch themselves. If a buyer is a cash buyer, then we suggest adding to the equation buying costs and furniture costs when thinking of purchasing an off-plan property. If a buyer is considering purchasing a property with a mortgage or equity release, we recommend speaking to a financial advisor or banks prior to visiting new developments to save themselves time and avoid any possible disappointment.
3. Consider the additional costs:
When one has come up with the sum for an ideal budget to purchase an off-plan property, they will have to take into account that the VAT on a new build is 10% above the sale price, that 1,5% is the amount payable for Stamp Duty, between €500 and €1.800 for Notary, Land Registry which amounts to 50%-70% of the notary fee and 1% plus 21% VAT for legal fees. If you are considering purchasing with a mortgage, most banks will charge a mortgage opening fee of around €1.000.
When purchasing a new build home you also have to consider the costs of purchasing furniture.
Once you have completed on the property and furnished it, there will be running costs for the home, apart from the usual water, electricity, home insurance and internet connection, community fees (when applicable), owners will have to pay taxes. Usually running costs and taxes are: Council Tax, community charges (for maintenance of internal and external communal elements such as swimming pool, lifts, etc.) and Rubbish Recollection Tax. Non-fiscal residents in Spain will also have to pay Impuesto sobre la Renta de No Residentes (Non-resident income tax). There is also a Wealth Tax for non-residents with assets of over €700.000 in Spain paid annually. This tax for residents in Spain is calculated on amounts of over €700.000 on worldwide assets. These costs and taxes will be there for as long as you own the property, so it is important to come up with an amount that people feel comfortable paying.
4. Think of Location and research the area:
Location is one of the most important aspects of purchasing a property, regardless of whether it is a new build or a resale home. If a person is not familiar with all the areas where they would consider purchasing an off-plan property, they should first think of their lifestyle and their needs, then visit different areas. All cities and towns will have great neighbourhoods and less attractive ones, but the main points to consider when they are learning of the area in which they would like to purchase a new home is that location is not a movable item, so it is very important to explore and be familiar with the area prior to making a decision.
5. Use a reliable and experienced estate agent:
Purchasing a home is a life changing financial transaction, so although it is not necessary to use the services of a real estate agent, it is highly recommended. Firstly, using the services of an agent in Spain does not cost you extra money, as it is the developers who pay a fee in the case of a sale of a new build home and most importantly the property price will be the same whether you approach a developer with or without a real estate agent. Reputable estate agents will be on your side throughout the process, being able and having access to the best possible options during the search, including those new developments which are in a pre-launch period.
Experienced real estate companies will know which developers are trustworthy, which developers have the best finishes and will assist you with their local knowledge with everything related to the purchase, including providing a list of independent solicitors, assisting you with shopping for different mortgage offers when necessary, introducing buyers to different interior designers if desired, foreign exchange companies if required, help new home owners with the snagging and everything related to owning a new build home, as well as giving tips regarding all the services within the local area a client is considering purchasing a home.
6. Write down questions for the property developer:
When buyers are looking at new developments they normally end up visiting many options throughout a tour. They will learn of the different complexes one after the other and the information given by every developer will be quite large, sometimes even overwhelming. It is important to ask a series of questions, which can be done during that particular visit or during a second visit if the buyer wants to obtain in-depth knowledge of a certain off-plan complex. We advise to write down questions prior to visiting any new development, so that these can be answered by the developer during the visit.
Most of our clients ask questions like: How long have you been in business? Are there any new developments you have built which we can visit? Do you have a building license in place? Which bank guarantees are in place with the purchase? Who is the architect behind the project? What are the customizable options for my new home? What changes can I make? Who else is purchasing in the complex? How many units have you sold? What´s included in the after-sales service? Is the payment schedule flexible? Does the property come with pre-approved mortgage offer? Can I sell the property before completion? Is the development going to be delivered on time? All these questions will give clients the possibility to obtain a better idea the development and assist them in deciding if the complex they are being offered is ideal for them.
7. Do a second viewing:
Regardless of whether you are physically present at a viewing, doing a video tour or virtual walk-around visit, first viewings are ideal to shortlist the most interesting options available on the market from the rest, second viewings help buyers decide which will their future home.
Our data shows that 7% of our clients purchased a new build property without being physically there after doing a first virtual tour, 24% physically visited their current home once prior to purchasing it, 58% of our clients did a second viewing or a second virtual tour prior to deciding on their future home, 11% of our clients required a third visit prior to choosing their new build.
If a client decides on physically visiting a new build for the second time or do a second virtual tour, we always recommend making it take place at a different time of the day from the first visit just to get a different feel for the property. Ideally during this second visit, clients will check whether the light that they loved at a certain time of the day is also ideal at another time of the day, to confirm that the property is still quiet during a different time of the day and even to see how traffic may affect arriving to a particular property at a different time of the day. Second visits are perfect to clear any possible doubts and making a decision.
8. Obtain assistance for legal, finance and currency exchange:
Sooner or later, buyers will find their dream home, it’s a very exciting moment as clients have finally decided which will be their future household. It’s the perfect moment to start dealing with these important aspects:
If the future owner is not a cash buyer and has not contacted banks or financial advisors prior to visiting new developments (as we normally recommend) it is the time to confirm that a loan can be granted. If the purchaser is not a fiscal tax resident in Spain is a good idea for them to speak to financial institutions both in their home countries about releasing equity release (as most foreign banks will not lend on a property located in a foreign country) and to Spanish banks or financial advisors to obtain information about resident or non-resident mortgages in Spain.
If a purchaser is a cash buyer and transfers funds from a non-Euro currency country to Spain, they should always check with a foreign exchange company their rates and think about how much foreign currency they are actually going to obtain after calculating the exchange rate and charges. The difference between transferring funds from a regular bank and foreign exchange company can be great, especially when we speak of large sums of funds. We always recommend speaking to at least two or three foreign exchange companies as well as the buyer´s bank prior to transferring any money to Spain.
Lastly, it is important to contact a solicitor, ideally one that speaks the client´s native language. Clients should appoint a legal representative to represent the client during the purchase and request them to carry the due diligence on the new build they intend to acquire. As a next step, we always suggest, signing a power of attorney with the solicitor here in Spain, it is cheaper signing a power of attorney here than in any home country and removes the requirement of having to place the “Hague Apostille” on the power of attorney, as well as having the power of attorney translated in two languages. Once this is done, buyers will not have to worry about travelling to sign the private purchase contract or even completion at notary, as the solicitor will open a bank account on their behalf, obtain a NIE (Spanish Identification number for foreign citizens), change of ownership of all utility bills, supplies and taxes concerning the property (through direct debit on the owner’s Spanish bank account) and any other requirement the buyer may have with the property, like helping them writing a will in Spain.
Pro Tip: Regardless of whether a property owner is a resident or non-resident in Spain, we always recommend organizing with their solicitor the signing of a will on their Spanish property in front of a Public Notary, even if they have a separate will in their home country. This simple and inexpensive procedure has a large number of advantages which can be discussed with a solicitor, but in general terms will save beneficiaries hassle, time and money. Please note that if a couple owns a property, two separate inheritances will be required.
9. Reserve the property:
Once buyers find that off-plan property that will be their future home and sorted out their finances, they can secure the property by making an initial down-payment to secure the property, which is also known as paying an off-plan reservation fee.
Due to the large number of visits to new builds, developers may hold a particular unit for a few days until the buyer is in a position to pay the deposit (which usually is of €6.000, plus 10% VAT), but they will not hold the property forever, so it’s important that when a buyer has decided on a property to sign the reservation deposit and make the payment to avoid disappointment. In the past, we have experienced that some of those clients that preferred to wait a little to see how the off-plan project was developing, when they finally made the decision, the unit that they were keen on purchasing had been sold to someone else and the remaining units available had risen in price or did not meet exactly the requirements that the clients had.
10. Transform the new build into a home:
Once the property has been reserved, it is ideal to start thinking of how to turn a new build into a home by furnishing it in the best looking and most comfortable way and not wait until completion to start thinking of furniture. The best practice is to present of a floor plan to an interior designer, so that they can start working on the project as soon as the property has been reserved (even if it is a year and a half in advance) and present buyers different options according to their budget and needs.
In general terms, appointing an interior decorator will not cost buyers extra money and is a great way to obtain a professional touch into the project of decorating the client´s future home in order to make it practical, functional with comfortable spaces. The interior designers collaborate with, will have the house ready when the buyers complete and can present some of the best designs on the Costa del Sol, as they specialize in creating the most amazing living environments for the best new developments in the area.
Pro Tip: In Andalucía there are two periods of the year in which we find sales and discounted items. There is a winter sales period which usually goes from the 7th of January to the 7th of March and a summer sales period which normally goes from 1st of July to the 31st of August. It is always a great idea to close a furniture proposal during this period to obtain certain discounts on furniture, even if the items delivered months down the line.
When it comes to choosing a new build home on the Costa del Sol buyers are required to think of several aspects such as: Is the property for me and my family? Am I going to need to rent the property to maintain it? How often will I be able to enjoy it? There are many more questions related to owning a property in the Costa del Sol, however, here´s our top ten advices on how to choose the right off-plan property according to the client´s needs:
1. Set a budget.
Setting a budget is one of the most important aspects when deciding on purchasing a new build property. In the Costa del Sol region, new development prices start at around €100.000 for a brand new studio or 1 bedroom apartment to multi-million Euro investment for the ultimate brand new luxury villa.
2. Calculate the buying costs and furniture budget.
Apart from the property price, buyers looking into new build properties will have to add around 13.5% above sales price for buying costs and consider that on average homeowners spend between 7% to 8% of the property price to furnish it, although great furniture packages for a 2 bedroom apartment start as little as €8.000, take this into account when setting a budget on your if you are considering purchasing an off-plan property.
3. Choose a property type.
One of the first’s considerations when choosing which off-plan property type one should consider is to contemplate whether it will be a permanent residence or a holiday home, as different property types cater different needs. A second thought has to be placed in your lifestyle and how each property type will help you achieve the lifestyle you are looking for. For instance, most residents in a golf course love the game and enjoy being able to walk or drive their buggy from their house onto the course, people that are animal lovers may prefer to live in an independent home, elderly couples may prefer to be within walking distance to amenities and not depend on a car or public transportation to move around on a daily basis.
4. Think of running costs.
When purchasing a new build property one has to consider running costs of the property. Apart from utility bills like water and electricity, most property owners will contract an internet connection on their property. If living within a community of owners, most proprietors will have to pay a community fee and in certain cases, where the complex is part of a larger community, for instance on a golf course, owners may even have to pay both micro community (for the expenses within the communal areas of complex like maintenance of gardens, pool areas, elevators, etc.) and macro community fees (for maintenance of gardens, streets, security outside the complex, but within the communal areas of the residential estate). Non-fiscal residents in Spain will also have to pay IRNR Non-resident income tax (Impuesto sobre la Renta de No Residentes). In regards to taxes, property owners in Spain also have to pay IBI (Impuesto sobre Bienes Inmuebles), which is similar to a Council Tax in the United Kingdom and depending on the town hall the property is located, they may have to pay Basura Tax (Rubbish Recollection Tax). If the property price is over €700.000 (€1.400.000 for a couple), then an annual Wealth Tax will be applied to non-Spanish resident clients. The Wealth Tax also affects Spanish Residents with worldwide assets of over €700.000.
5. Think of completion time.
Most new developments on the Costa del Sol take around 24 months to complete between the start of the commercialization to obtaining the first occupation license. The majority of clients looking into retirement or buyers not in hurry to jump into a property will not mind waiting this period of time, as the benefits of purchasing a new home are great. Property investors will look at longer completion dates as this will give them better value and more options to choose within a certain complex, in many cases investors will take advantage of pre-launch prices and have more time to come up with the balance to pay at completion. Certain clients looking for a very specific location or a very particular home will have no choice but to wait the time it takes for the new development to be delivered. Other clients that prefer a certain property type, a lower completion period or a particular location will pay premium prices to enter a brand new property. Regardless of the personal circumstances of the buyer, with so many options available, it is a key element to have an idea of how long a purchaser is willing to wait prior to visiting new complexes.
6. Choose the area.
One of the greatest advantages of purchasing an off-plan property in the Costa del Sol is that most new developments are always located less than 15 minutes’ drive to a beach, to a golf course and to amenities, as well as all within an hour from an international airport. When compared to living in a large European city, these distances are always considered short, however, the Costa del Sol, is very diverse, as it boasts different geography, larger and smaller towns, some towns are more built than others, certain have more occupation throughout the year, others just during bank holidays and summer months. Certain towns have 10 times more permanent residents than others. Even though from one town to the next on the Costa del Sol there is just 10 minutes’ drive and one can drive from one end to the other of the Costa del Sol in just an hour, the options are very diverse. This is why is not only important to focus on the budget, buying costs, timeframe of completion and property type, but also consider which area would suit your requirements and lifestyle best.
7. Speak to a real estate agent.
A professional real estate agent with a great amount of experience will not only assist you in answering all queries regarding owning a property in Spain and show clients new build properties, but the agent should be able to give insight on different areas, local tips on where to do shopping, where to find the best restaurants, amongst any other queries regarding daily life in the different areas of the Costa del Sol. Knowledgeable realtors will also discuss and understand the customer´s requirements and discharge those options that are not suitable for the client, so that they don’t waste time with unnecessary viewings. A good consultant will also come up with concerns or considerations that may not have crossed the client´s mind. The best real estate consultants will also distinguish the hottest offers, have access to the latest new releases, pre-launch prices and know what is about to come on the market. They will also work around the client´s schedule, be completely independent in regards to which off-plan property they offer to the client and make sure the client´s interests are a priority. They will also be available before, during and after the completion, even in the future, many years down the line should the client wish to sell their property. They will also recommend serious developers, lawyers, financial advisors, banks and even decorator´s should a client require so.
8. Contact a solicitor.
Purchasing a new build property in the Costa del Sol has different legal and tax requirements for different clients residing in different countries. Understanding all legal and tax implications in owning a property abroad is very important. We always recommend learning the buying process first, study all aspects related to owning a property in Spain including related topics like inheritance tax, wills, money laundering laws, non-resident taxation systems for property owners, wealth tax (when applicable), prior to visiting properties.
9. Look at the financial aspect.
When thinking of purchasing a home in Spain as a non-resident, buyers have to consider that they will have to have at least 43.5% as down payment to purchase a property, depending of their country of residence. For certain countries, clients will have to have at least 63.5% for down payment as banks will only finance 50% of the price of the property and 13.5% are required for buying costs. If clients are considering equity release or obtaining a mortgage in their home country to purchase a property in Spain, it is best to contact their bank first in order to learn of the viability of the operation. Some clients consider that the bank in their country of origin will let them finance on a property abroad, but this is a very unlikely scenario, this is why we recommend checking with the bank first. It is always important for clients to verify finances are in place in order to be able to purchase their dream home, prior to visiting properties.
10. Visit properties.
Once we have a general idea of the budget, the property type, the running costs, the area clients are considering and the time they are willing to wait to be able to purchase an off plan property, it is the time to book viewings and visit different projects. It is a great idea to book at least 3 days for appointments to be able to get a general idea of how the new build real estate market is on the Costa del Sol. Normally after seeing 9 or 10 complexes, most clients are able to decide which new development works best for them. We suggest clients to short list their favourite 3 or 4 options and visit the sites for a second time, even a third time if necessary, ideally at a different time of the day in order to obtain a better idea of the surroundings, light and area itself before making a final decision.
With so many off-plan property types available for sale in the real estate market, many clients wonder which property type they should purchase. Below there is a list of the best 10 off-plan property types available and the advantages of owning any of them:
1. Studio apartments:
Off-plan Studio apartments are ideal for a single person or couple as living, eating and sleeping occurs in the same open plan space. These property types are cheaper in price and easier to maintain than any other property type. They make the perfect holiday home for those clients looking for a smaller investment opportunity. Even though new build studios have improved layouts drastically, the downside of owning a studio apartment as a permanent residence is that a studio apartment may lack of outside space or storage space, however, this type of property does always well in any rental market.
2. Ground floor Apartments:
Off-plan ground floor apartments are a great option for people who want to enjoy outside space, especially for couples with small children. In places like the Costa del Sol, where most of daytime activities are done outside throughout the year, having a garden is really having an extension of the house. New build ground floor apartments come with a covered terrace space and a garden area, perfect for planning your own flowers or aromatic herbs, sunbathe, read a book or enjoy a nice family barbecue in the sun, which in new developments, gardens are always maintained by the community gardeners, so they are ideal even if you spend a few months a year in them, as the community will maintain your garden when you are not there. Brand new ground floor apartments make great holiday homes as they are ideal for family entertainment, easy to maintain and lock.
3. Middle floor Apartments:
New build middle floor apartments are normally chosen for different factors, less exposure to the elements of nature, hence better insulation, lower utility bills and a sense of more protection against any possible security breach when compared to ground floor apartments. Most buyers looking at middle floor apartments will sacrifice the extra outside garden space that ground floor apartments have to obtain better views. Over the recent years developers have placed special emphasis on making terrace spaces of new build middle floor apartments much larger than in older apartments located in the same level. This improvement has made middle floor apartments a very appealing option for customers looking for a holiday home which worry about any unlikely event of a security breach.
For numerous owners, when it comes to apartment types, owning a new build penthouse is the best possible option, as these property types have been completely redesigned to be larger, have better layouts, the best possible views, no neighbours above and incredible outside spaces, peace and tranquillity, most brand new penthouses even include barbecue areas, alfresco dining areas, chill out areas and swimming pools or hot tubs in the solariums. For many buyers, owning a new penthouse has the best of both worlds, the possibility of using the services available within a community of owners and the feeling of independence that living on a single-family home gives without the maintenance costs owning an independent home with a garden.
5. Duplex apartments:
Duplex apartments come at ground floor or penthouse levels. As these type of properties are larger than most types of apartments, these types of homes are ideal for larger families with grown up children who desire to live with some kind of independence. Sometimes new build duplexes are chosen by couples who have many visitors that prefer a certain level of privacy, while having guests. Duplexes can be ideal for those owners who wish to rent part of their home, while they leave in it to obtain some extra income.
Off-plan townhouses have been completely redesigned and no longer mean that they are just 3 storey-high, narrow house-holds. New build townhouses these days, although they maintain the essence of being attached on both sides with neighbours, are not always built in a straight row, making them much more appealing with the different offered layouts. Most new build townhouses are now built on with wide layout design. New build terraced homes come in two types, with completely terraced outside space or partially terraced with a garden. These property types are perfect for families with children or couples who wish to live in a sense of community, yet enjoying the advantages of living in a home. New build townhouses come in gated communities and having neighbours gives that sense of security most clients are after. The maintenance costs of owning a new build home are much lower than a single-family home, yet many new developments offer the most fantastic communal areas for residents to enjoy amenities such as swimming pools, tennis courts, children´s playgrounds, amongst many other amenities. These property types are more popular amongst younger couples that don’t mind stairs and make the perfect holiday home as they offer great outside space.
7. Semi-detached houses:
Off-plan semi-detached houses, unlike townhouses, are only attached by one side of the property with the neighbour. Usually larger than townhouses, brand new semi-detached villas are generally speaking, more private. Plot sizes tend to be larger than townhouses. Semi-detached villas, as they are called in certain countries, also enjoy the amenities and services of living within a community of owners. Most of the semi-detached houses we find in the market today have evolved into high-end luxurious dwellings with large multipurpose rooms in the basement area, lifts, private swimming-pools and wonderful solariums. They are ideal for permanent living or to be used as holiday homes. Most developers in recent years have included lifts in their design, so having several levels including basements for instance, is no longer an issue, this is why they have become very popular for those owners who do not like stairs and yet require a very spacious living space, who wish to be part of a community and socialise.
New build villas these days are very demanded as there has been a great change in design and layout, where open plan has become king. With these new design trends these days, new build homes come in different sizes and prices, therefore they are more accessible when comparing the price per square with other property types. One of the main advantages of purchasing a new build villa is the personalization options, as developers are able to offer different layouts and finishes to cater different needs. In minimalist design, customers find that space is utilized in a more efficient way as transitional areas like hallways are drastically reduced or completely removed in the daytime living area, therefore new build homes are also more spacious than older homes with the same size, this is not just pleasing to the eyes but also highly efficient. Recent changes in architectural trends make new build villas brighter, as developers pay special attention to including as much natural light as possible in the design and special emphasis on the orientation of the homes, where south or west orientations lead the way. Energy and environmental efficiency are also very important elements taken into account during the construction, therefore, these houses are more eco-friendly and less expensive to run than older homes. Owning a private garden opens the possibility to have a save place for children to play, to own pets, have space for family gatherings or parties, to relax in the open air, to enjoy gardening, it opens a world of possibilities. If a buyer is looking for freedom and privacy, owning a new build independent home is the best answer as it gives owners the opportunity to adapt, modify and design indoor and outdoor spaces at their own taste. With the flexibility and design options available in off-plan villas these days; they are ideal for every type of homeowner, a single person or large family, they can be used as a permanent resident or as a holiday home.
Many clients that are after new build fincas (also known as country houses) for different reasons, but the most common is a change into a more tranquil lifestyle. New build fincas are a lot different from the traditional constructions, as they have evolved over the last decades into stunning modern households. Most off-plan fincas have minimalist design and open-plan layouts. What´s important about off-plan fincas is that they offer great privacy and a very close connection to nature. Unlike other property types, fincas tend to be used mostly as permanent residences where customers are looking for space, tranquillity and seclusion. Often, they are designed to have independent rooms with separate entrances so that they can be ideally used as retreats in the middle of nature without losing privacy in case of having guests, which another important aspect of country living. These properties are ideal for animal lovers, for persons looking to grow organic fruits and vegetables or even to create agrotourism related businesses, eco-friendly restaurants, luxury bed and breakfasts, yoga retreats or just retire into a more relaxed lifestyle.
Purchasing land to build a new property on is a dream for many. One of the greatest advantages of building your new home is the level of customisation involved. Another great advantage is that the owner will be the person selecting the location of the plot, rather than the developer doing it for them. Starting from looking at land all the way to completing the project will require full involvement from part of the owner, but the return will be great, as the property will be tailored to the owner’s needs. Mixing these two ingredients will make the new home, truly unique.
Customers looking into purchasing land, normally have some level of knowledge of how the process of purchasing land works, how to develop the project, how to obtain licenses and how construction works, before choosing this path. The costs involved in designing a costumed new property are not low and clients should be familiar with the works of the architect, developers and possibly hire a project and construction management company before deciding if this option works for them. Time is also an important matter to take into consideration when thinking of building a dream off-plan villa as these tend to last longer to build than most new builds.
Pro Tip: An advantage to purchasing any type of new build property in Spain is that all new properties come with protection laws for the owners as the Spanish Civil code sets different timeframes for developers to intervene at no costs for the owner in case of faults or damages in the construction, which is not the case on resale properties when they are 10 years old or more.
The first and most important criteria when purchasing on a new development is to take in account its location. This is one of the most important assets of a property as it will always hold value if the location is great, regardless of the market conditions. On the other hand, you can’t make an average location great. Another important aspect when looking at the location is to take into account the neighbourhood and infrastructure within the area.
The second most important consideration is to find out the reputation, accreditation and reliability of the builder. A great idea is to learn of the quality of their work by knowing what they have previously built and visiting any finished construction they have delivered.
The last consideration is related to due diligence and legal checks. The purchaser or their solicitor should check that the technical project has been approved, the building license has been granted and the bank guarantees are in place.
We have come up with the 10 most important questions any home buyer who is thinking of purchasing a new build property should ask a developer before making a decision to purchase:
1. How long will it be before the complex is finished?
Asking the developer when will the complex will be finished, rather than asking the developer long will it be before the complex is handed over, is different in the sense that the first term refers to only to when the building works are completed, while the second question, refers to obtaining access to the property once the work on site has finished, the snagging has taken place, the first occupation license has been granted and a completion date is given.
The difference in time between both questions can be between 3 to 6 months, depending how quickly the first occupation license is obtained and notary dates are given. In order to know exactly when a homeowner will be able to occupy their brand new home, it’s always better to ask the second question.
2. How many units have you sold in this new development?
Knowing how popular a development is can be measured by the amount of reservations placed on the off-plan project since the commercialization of the construction has begun. Other home buyers are also visiting many new developments in the same area one is considering purchasing and also comparing location, prices, sizes, quality finishes and views with all the other new complexes around, so knowing the rhythm of sales can help clients understand if the investment is sound, when compared to the other complexes being on the market in the same area.
Once a buyer knows how many units have been reserved in a particular complex, they can also learn who else is purchasing, therefore will also know who their future neighbours will be. Prospective buyers can learn if there be will investors wanting to rent these new properties, if these will be used mainly as holiday homes or as permanent residences. All this information is very important when deciding which will be the perfect brand new home for home buyers.
3. What´s included in the sales price?
Developers sell most of their properties through exhibiting a show flat or show villa, as clients will have a better understanding of how their future home will look like once finished. They make a real effort in showing the best way they can what they are constructing. These show flats or show villas are ideally decorated by the best interior designers and will include all the possible extra features a developer can place in them, so that they present the most beautiful brand new homes.
For buyers, it’s important to understand which appliances, features and finishes will be included in the property they will be purchasing right from the beginning as standard and what will be the price of the all the upgrades that appear on these show homes, as not everything that is displayed in a show property is always included in the price. Before clients are in a position to decide whether what they considering purchasing makes economic sense and is perfect for them, it´s important to know what is or isn´t included in the price.
4. Do you offer any special incentives with the purchase?
Certain developers may offer different incentives with the sale of their off-plan projects. These incentives may come at different stages of the construction and in different ways. When a discount is offered at early stages of a new development being launched, during the period while the building license is applied for by the developer, the discount offered is limited to a short period of time and only for a certain amount of units. This discount is normally called a pre-launch price or soft-launch offer, depending on how advanced the construction is at moment the client visits the development.
Once the building license has been granted and several units have been sold (usually around 20% to 30%), there is a price revision upwards. This price increase is between 15% to 30% depending on the rise of demand from buyers and the competing projects available in the area. During this stage is not possible to obtain any discounts as the demand exceeds the supply, however, certain developers may offer other types of incentives. If offered, these typically include gifts like a free family membership to a golf club or sports club for a couple of years or for as long as one is owner of the property, a free furniture package included in the sales price or have extra features included in the property free of charge when purchasing a property.
In the case of show flats or show villas, as these are also used as offices, normally these are not on the market until the latest stages of the construction, as developers do not wish to be moving them every time they sell a property. However, when these come on the market, developers may offer the furniture displayed in the property at a discounted price or even include it in the sales price of that particular property.
If there is a new development which has been completed and there are still some units available for sale, there might be a possibility to obtain a small discount on the final price. However, buyers that speculate with discounts available when a property is key-ready must remember that the units with the best views, best light and best position do tend to sell first. The properties that are available after completion, in general terms, tend to be the least attractive ones within the complex, so when it comes to resell them in the future, there´s a great chance that these will also sell due to a lower price when compared to anything else within the development rather than selling for having the best views, being the brightness and being located in the position within the complex.
5. What´s else have you constructed?
For certain home buyers, it becomes very difficult to perceive what a future home will look like until it is delivered. On the other hand, developers place a special effort to create the most amazing show flats or show villas to impress, so it is important to know what else the developer has constructed prior to making a decision.
Finding out what the developer has previously built and being able to visit their some of the homes constructed by them will help incredibly if in doubt, as clients can learn of how the quality of their work holds over time, how the attention to detail in the construction is, as well as having the possibility to obtain references from current property owners.
6. What´s being planned to be built around?
As off-plan properties take quite a bit of time to complete, asking a developer what´s going to be built around the area where a new build is being constructed is as important as knowing if the new development the client is visiting will be built in phases as both scenarios may have the same repercussions.
Purchasing a property in an off-plan complex or in an area where there will be other new developments constructed may mean having to live close to a building site for a long time, hence, having to be surrounded by noise, dust and everything that involves living close to a building site.
7. Can I make any alterations to the property?
If a perspective buyer is interested in making any alterations to the off-plan project a client is considering purchasing is important to know what can be done in a particular property prior to taking it off the market. By requesting any possible modifications, upgrades or quotation for any extra building works prior to paying a holding deposit; a buyer will be in a stronger position to negotiate any of these changes with the developer and know exactly what can and can´t be done on the property.
8. Is your payment structure flexible?
When purchasing an off-plan property in Spain, the payment terms differ whether the buyer is a fiscal resident or a non-fiscal resident. In general terms, this translates to paying the same amount as a holding deposit, but whistle fiscal residents in Spain will be required to pay between 10% to 20% during the construction and a maximum of 80% plus buying costs at notary, non-residents are normally required to pay up to 30% during construction and 70% plus purchase costs at completion.
If a buyer requires a different payment structure is worth asking the developer for an alternative payment plan.
9. Can I finance the purchase of the new build project?
Many developers may be in a position to offer what´s known as a developer´s mortgage when a property is ready to be delivered, but the condition of this mortgage will be known in advance, right from the beginning of the commercialization of the new build project.
It´s always a great idea to know the requirements to be granted a developer´s mortgage, the percentage of what be borrowed, the interest rates and the general conditions to be able to make a decision on whether the developer´s mortgage is interesting for the buyer of if it is necessary to contact other banks or financial advisors to find more beneficial loans for the purchaser.
10. What´s included in your after-sales service?
After-sales services vary from developer to developer, some companies have just one person dedicated to dealing with the snagging for all the properties within the complex and call it after-sales support and others have teams of people dedicated to everything that is involved in assisting the buyers once they have completed on their new home and several years after.
Knowing from the very beginning where the developer stands with regards to customer support and how the after-sales services within that particular company work are very important to help buyers understand if the new build they are choosing is the right one.
Frequently Asked Questions regarding new build live streams and off-plan property viewings on the Costa del Sol:
Live stream tours are the perfect method to home search for a new build property, especially, if the client cannot physically present to visit a new build project. Past are the days where customers had to make decisions such as purchasing an off-plan property based on faxes, black and white printed material such as floor plans and phone calls to make a decision.
With the latest apps available, which have become standard instruments in real estate, buyers are able to visit homes from their office or living room, decide which information they wish to obtain as well as ask all the questions and obtain all the answers in the very precise moment they ask them, just like if they were physically present at the viewing.
Yes, at Sur Estates, we organize live stream tours and viewings on all property types. All it is required from the client is to book an appointment with our Customer Service department to organize a meeting by phone on +34 951 50 72 32 or via email at: email@example.com.
The client expresses all the property requirements to our customer service department. We send a selection of properties. We organize a telephone appointment and clarify any possible questions. The client then decides which new builds wishes to visits and gives us a date. Once the appointment has been booked, the client informs us which video-conferencing apps like Zoom, Google Meet, Whatsapp, Skype, etc, they wish to use to carry out the video tour.
At the day and time of the tour we meet through the app at the developer´s office and run through the presentation, study floor plans, layouts, orientation, views and price to obtain the latest information available, just like if a client was visiting the complex in person.
Clients are able to ask the developer questions live and obtained all the desired information at the very moment the conference call is taking place. After the live steam tour has taken place, we email all the information to the client.
We have come up with a list of the information clients will be provided when visiting a new development through a live stream tour, which is the same information a client would obtain if they were physically visiting an off-plan project:
1. Exact location of the new build project.
2. Information about builder and promoters behind the project.
2. General description of the complex (including features and services offered within the development).
3. Stage of the construction.
4. Updated price list and availability.
5. Building and quality specifications.
6. Tour on a show flat, show villa or the plot where the construction is taking place.
7. Specific information about dwellings that match the client´s criteria (including floor plans and views).
8. Price details and payment structure.
9. Details of the bank guarantees.
10. Information on how to reserve a unit.
It really depends on several factors, such as the schedule of the developer, our own agenda and time of the year, but our team will always do their best to organize appointments around the client´s schedule. Customers interested in this free service should contact our Customer Service department on: firstname.lastname@example.org or +34 951 50 72 32 as soon as you wish to organize an appointment, so that we can fit to the client´s timetable in the best possible way.
Live stream tours on new developments take as long as the client desires. Normally, a presentation on an off-plan project takes anything between 30 minutes to 1 hour, depending on the interest of the client on learning all the information regarding a particular project.
This varies from developer to developer, most developers will organise a visit on a new development with just the full name of the client and email address, a few also require a phone number, nationality and passport number.
The optimal number of new developments to be visited in one full day of viewings is between 6 and 8 different off-plan projects, 3 or 4 to be visited in the morning and 3 or 4 to be visited in the afternoon, as there quite a bit of information to be learnt on each project. We are however able to adapt to the client´s necessities. Sometimes we show just 1 new development a day and other times show more than 10 a day.
It’s really depends on the client, there are people who decide on which new build to purchase after just visiting a few off-plan complexes and others that need to learn the area first and view more than 10 new build complexes before making a decision. If there is a serious client, we will offer all the time in the world for them to make the best possible choice, we are more than happy to show clients all those new developments that fit their requirements.
Yes, the price of any new build property in the Costa del Sol is the same if a client visits an off-plan project direct or through an estate agent. In Spain it is the promoter who pays the estate agent the fees in case of a successful sale, but will not discount the agent´s fees if a buyer goes direct as they always use real estate firm to sell their homes.
Frequently Asked Questions regarding Key ready properties and new builds on the Costa del Sol:
We have come up with the top 10 benefits when purchasing a key-ready new build property:
1. There is no need to wait the typical two years for an off-plan construction to be finished to be able to enjoy a new build property.
2. Clients are able to see exactly what they are purchasing with a ready-to-move-in property.
3. Building guarantees are in place in key-ready new builds, just like in off-plan properties.
4. Clients can carry a snagging straight away.
5. There is no work or reformation required.
6. Better finance options than homes under construction.
7. All licenses are in place.
8. Save money on renting a property compared to purchasing an off-plan property.
9. No risk factor involving delays compared to off-plan properties as the homes are already built.
10. Ready-to-move-in property owners able to know who their neighbours are before moving in.
At Sur Estates we offer all types of key-ready properties in different areas and locations. We have access to new build ready-to-move-in properties in beachfront, frontline golf, towns or any locations clients may be interested in.
The key-ready property types we offer are:
3. Semi-detached homes.
Feel free to contact our Customer Service department on email@example.com or +34 951 50 72 32 to obtain a selection of the best possible options of key-ready homes.
As Key-ready new build properties have not been transferred yet, they pay VAT rather the ITP (Impuesto de Transmisiones Patrimoniales / Transfer Tax). VAT on new build property is of 10% of purchase price.
If the key-ready new build have been transferred but have never been lived in, then, it will ITP Tax, which is Andalucía is now of 7% of purchase price.
There are several ways to know if a property has just been built and is ready for immediate use or if the property is a refurbished property which had some superficial make over and just looks new.
The easiest ways to find out are:
1. Look at the date of the First Occupation License.
2. Check whether the property would pay VAT or ITP (Transfer Tax), as only new homes pay VAT.
3. Ask for a Nota Simple (Official Report from the Spanish Land Registry Office) and look at the date of registration.
Yes, Key ready new builds come with building guarantees, which in Spain is known as Seguro Decenal (ten year building warranty), which will cover structural faults such as foundations, retaining walls, etc. Apart from this, several key ready new builds will also include a two year warranty on electrical equipment such as kitchen appliances, air conditioning units, domotics, etc.
No, although most key ready new builds are decorated by some of the best interior designers available and include the furniture in their sales price, not all of them are sold fully furnished. Certain developers prefer to leave the new build as a white canvas for the owners to include their own personal touch, while other developers may have the furniture displayed at a key ready property to understand the size but sell it at an extra cost.
The reason why certain key ready new builds are not published on our website is due to the owner´s or developer´s wish to list it as a private sale. When a key ready new build is listed as a private sale, we do not publish it on our website or any property portal to comply the vendor´s requirements, however, all the information can be sent to the client under the client´s request.
Frequently Asked Questions regarding new build and off-plan buying process on the Costa del Sol:
One of the first steps into purchasing a new build property on the Costa del Sol is to set up a budget keeping in mind that the buying costs of around 13.5% above sales price. A second step is to think of the area in which you would like to live on the Costa del Sol.
In the case in which clients are not familiar with all the different areas and are required to discover them, we are happy to show you the best areas according to the chosen lifestyle. Before viewing properties, it is a great idea to also think the time clients are willing to wait for a new development to complete, as this exercise will discharge those options that might be too far down the line.
We also recommend our customers to do a list of special requirements within the property including aspects like if a complex has to be wheelchair friendly, have lifts, preferred orientation or floor level, and any requirement that they consider important.
At this stage, before the client´s arrival date, we are also able to put you in contact with different banks and financial advisors, in the case you want to explore the possibility of purchasing with finance. This service, which is free of charge, is great for those clients that wish to purchase with a mortgage.
Prior to the customer´s arrival, we also offer the possibility to obtain a free consultation with one of the several independent solicitors and law firms that work along the coast for clients to clarify any questions regarding buying costs, residency, golden visa options, inheritance tax information or any other subject the client may consider important for the purchase of a property on the Costa del Sol.
During the property search process we keep in contact by email and over the phone to send clients different selections based on the criteria the client has chosen and inform about the new developments in detail, we are also able to send floor plans and more information, like questions regarding areas and services, such as schools, pharmacies and other facilities that might important for the client. We also work around the client´s availability, even though we recommend setting aside at least three days to view properties, obtain the opportunity to acknowledge the areas and the complexes the client has selected.
On the client´s arrival to the coast we visit the shortlist of new developments selected. Normally it is a great idea to view a maximum of three or four new complexes at the time. Visiting too many complexes at the same day tends to confuse clients, as the information provided is normally quite large.
After the first and second day or whenever the client requests it, we revise the complexes visited and amend viewings if necessary. We have the flexibility of adding or removing properties following the requirements of the client. When all the new developments that the client has requested have been visited, we recommend clients to create a short list of the ones that suit them best and organise a second visits.
During the second visits of most liked new build homes, clients obtain a better understanding of which new development fits their criteria best, usually, this is the moment most clients select the off plan property where they would like to live in.
Once the client has decided which property will be their future home, a reservation contract is drafted and a deposit is paid at the developer´s escrow account. At this stage, the client´s solicitor will carry the due diligence and legal checks, making sure that all licenses and permits are in place.
When the legal status of the new development has been approved by the solicitor, usually a month from the payment of the deposit, a private purchase contract is drafted and signed by both developer and buyers or their solicitors, it is not necessary for the buyers to be physically in Spain to sign the private purchase contract as they normally instruct their solicitor to act on their behalf. A 10% of purchase price plus 10% VAT, (minus de deposit and its VAT already paid) will be paid to the developer at this stage.
Some developers will have a series of instalment payments through the construction process and others will increase the amount to be paid during the private purchase contact, so that at least 20% + VAT of purchase price has been paid prior to completion. The payment structure of each new development is explained during the visit of each complex.
When the new development is about to be delivered, usually a couple of months before of completion, the developer will contact the buyer to inform them of the progress. At this stage the developer has already requested the First Occupation License from the Town Hall where the complex is located and will start organising the signing of the title deeds. During this period clients are allowed to visit the site, its communal areas and their future property. At this stage we strongly recommend using a chartered surveyor to carry out the snagging list on the home.
When the signing of the title deeds takes place and the client completes on the property in front of the witness by a Notary Public, the balance owned to the promoter is paid and the owner takes legal possession of the property.
After signing completion at notary, the solicitor will register the property on the client´s name at the Land Registry, organise utility bills, taxes (IBI Tax and Rubbish Recollection Tax) and community fees to be paid as direct debit from your Spanish bank account.
Pro Tip: If a solicitor is hired from the beginning of process and power of attorney is given to them, the procedure of buying an off-plan property is simplified, as they will run through the whole purchase process of the new build home, without the need of the buyers having to come to Spain to attend the different stages of the purchase.
Yes, hiring the service of a solicitor or a law firm when purchasing a new build property on the Costa del Sol is highly recommended. When purchasing an off-plan property, a solicitor will carry the following searches on behalf of the clients:
1. Verify the legal identity of the owner/seller of the immovable property the client intends to purchase.
2. Validate that the property under construction is legally registered in the corresponding Spanish Land Registry.
3. Confirm that the property will be sold free from charges (mortgages, liens, encumbrances, etc.).
4. Corroborate has been granted the corresponding building permit and habitation license (when applicable).
5. Make sure that the construction specification or quality specifications are available and annexed to the purchase contract.
6. Validate that there is a bank guarantee or insurance policy in place in order to provide assurance to all the money paid to the developer during the construction.
7. Confirm and check the content in the decennial insurance guarantee that will provide coverage for any structural defects on the property (Seguro Decenal).
8. Revision of the purchase contract drafted by the developer to assure its content respect´s the buyer´s rights.
Pro Tip: The standard Legal fee to be represented in the purchase of a new build property is of 1% of the property purchase price plus 21% VAT. Other important services included in the representation of a solicitor should be obtaining a NIE number (tax number in Spain for foreigners) which is required to register the client´s purchase in Land Registry, pay taxes, community fees and supplies such as water, electricity, internet, etc. A reputable law firm in Andalucía would also open a bank account to on behalf of the new owners and organize the direct debit of all taxes and utilities to that bank account.
Yes, giving power of attorney to your solicitor when purchasing an off-plan property is a great decision. If purchasing on the Costa del Sol, it is best give your solicitor power of attorney while visiting the country, at a local notary, ideally around the same time of signing the reservation document with the developer, as it will be both cheaper and faster than giving power of attorney from your country of origin. If you decide to give power of attorney from your home country is not an issue, but you will incur in extra costs, as the power of attorney will require having the Apostille from the Hague and the document may require to be translated to Spanish, the whole procedure will take extra time and be more expensive.
No, it is not strictly necessary for new build buyers to be present at the signing of a private purchase contract of your new build property on the Costa del Sol. One of the advantages of giving power of attorney to a solicitor is that the solicitor will act on behalf of the buyers throughout the purchase process. Once solicitors confirms that all the licenses are correct, they will also inform the buyers when the funds will be required to continue with the process and inform of the content of the private purchase contract for the future owners to authorize the signing of this contract on their behalf, so it is not necessary for them to fly over and sign it themselves.
Yes, we send updates on the progress of the construction of the new development property they are purchasing to our clients. Normally, the developer will send us pictures to clients also. Under request from our clients, we are able to visit the property on their behalf during the construction, send pictures, videos or carry a live stream to cover any questions they may have regarding the property they are purchasing.
It really depends on the client. Furnishing a new build property is a very exciting moment, especially when clients are purchasing an off-plan property. Some clients prefer to do as soon as they reserve the property; others prefer to do it at later stages, a few months before completion. In Spain there are two special sale periods, one that begins at just after the Three Kings holiday season and the other at the end of June, both periods last around two months. Many clients like to shop during these periods as there are different discounts and offers; others prefer to purchase the furniture package that is offered by the developer. Most buyers prefer to appoint an interior designer with a budget in mind, let them work on the design taking into account floor plan a few months in advance, receive different options, decide which option suits them best and plan the delivery on the date on completion.
The snagging of a new build property on the Costa del Sol normally begins when all the works in the property have been completed and the developer is ready to deliver the dwellings, normally a couple of months before completion. Some developers allow the snagging to carry the snagging just after completion. It is always a great practice to carry the snagging before signing the title deeds, handling over the balance to the developer and obtaining the keys to the property.
Pro Tip: By carrying the snagging just before completion, clients have much more leverage in getting the defects corrected.
Frequently Asked Questions regarding new build property changes and discounts on the Costa del Sol:
Yes, most developers will allow changes on a property when it is being constructed until a month prior to requesting the First Occupation License. The further the completion date is, the easier it is for developers to make changes. These can go from minor alterations, to larger modifications.
Pro Tip: The best time to negotiate any type of reform or layout changes is before paying the reservation deposit. In the cases the deposit has been already paid and clients realise the want to make changes, it is best to request them before the signing of the private purchase contract. Always request a written quotation of the works first, before agreeing on any modification.
Yes, if you have reserved a unit within a certain development, even if you have paid the deposit, especially prior to the signing of the private purchase contract, developers will allow buyers to change the unit they have chosen. In certain cases we have been able to change properties for our clients even after signing private purchase contract, just before completion.
Although it is something rare, when clients decide to change the unit they have purchased within a new development, the most common cause of buyers changing from one unit to the other is the number of bedrooms. Many clients who start the buying process in a new build realize that for a relatively small amount of money they can have an extra bedroom, for example they change from a 2 bedroom apartment to a 3 bedroom apartment within the same complex. The second most common reason for a client to change apartment is because they want larger outdoor space and they achieve so by purchasing a penthouse or a ground floor apartment with private garden.
Normally developers do not negotiate price reductions on off-plan properties, but sometimes they are able to discuss some sort of flexibility in the payment structure.
In certain cases they even may offer special incentives for certain units, for example, to include in the purchase price certain extras or even a full furniture package.
Any negotiation regarding payment structures, special offers or discounts will largely depend on each particular new build and how quickly the developer sells it.
Pro Tip: Let an experienced real estate company carry the negotiation on your behalf, experienced companies do have the knowledge, tools and negotiation skills to reach the best deal for the client.
Yes. We do have certain new developments and key ready properties offered at a discounted price. Contact our Customer Service department to obtain the latest information and availability on +34 951 50 72 32 or via email at: firstname.lastname@example.org.
Frequently Asked Questions regarding reserving a new build property on the Costa del Sol:
In order to reserve a new build property on the Costa del Sol a NIE (Numero de Identificación de Estranjero) is not required straight away. Once the property has been reserved, the solicitor will apply for an NIE on behalf of the clients as well as carry the due diligence and about all the documentation of the new build. Once the NIE number has been obtained, the solicitor will sign the private purchase contract on behalf of the clients and continue with the purchase process.
If the buyer decides to purchase without a solicitor representing them, then the client should obtain an appointment with the Spanish National Police to obtain the NIE number.
Most new build properties in the Costa del Sol are reserved by credit card payment; the second most common payment method is bank transfer. Cheques are not accepted by developers to reserve a unit as they take too long to clear.
To reserve a property in a new build on the Costa del Sol the standard amount is €6.000 plus VAT which is of 10% on new build properties, total € 6.600. In certain off-plan projects, developers will accept as little as €3.000 plus 10% VAT (total: €3.300) to take the property off the market while the legal searches are made. On high-end new build homes, the reservation can be of €50.000 plus VAT.
Yes. Most developers will agree to reserve an off-plan property subject to the client visiting the complex and obtaining all necessary documentation in order to confirm the purchase. Normally, reservations “subject to viewing” last maximum two weeks, period in which, clients have the time to visit the complex and decide whether they wish to continue with the purchase or not. In case where the client does not wish to continue, the deposit is fully refunded.
Pro Tip: Allowing an experienced real agent represent the buyer in the negotiation with this type of reservation, will gain you more time to be able to travel and better “special conditions” in the reservation contract.
Yes. This is a very common practice between our investor clients and second home buyers. We are able to gather floor plan information, building specifications and price lists of any of the new developments we have in our portfolio and all the required information for the buyer to be able to make a decision of the purchase without having to visit the sales office. We can create virtual tours of the plot, facilities and show flat when available directly with the developer on their onsite office on behalf of the client.
This is a great service we offer to our clients who are looking into purchasing off-plan properties that sell extremely quickly, particularly when they are not able to visit the complex themselves before the best units within the complex have sold or prices have risen, especially during the pre-launch phase of a new development when great discounts can be obtained or when a new phase is released on the market.
Pro Tip: Contact us to find out future new development releases. We are some of the first agencies on the Costa del Sol to be contacted about new projects being launched in the real estate market and can give access to new developments before most companies.
Yes, even though off-plan reservation contracts do have a “non-refundable” clause in them, in certain scenarios where the buyer is not 100% sure of the purchase, we can always request the developer to include a special clause to protect them.
On the other hand, in Spain, there is a two week legal cooling off period in which buyers can change their mind regarding continuing with the purchase or not. Apart from this, having a solicitor carrying the due diligence and legal checks may extend this period.
Pro Tip: By visiting new developments and reserving an off-plan property with our company we put our client´s interests first, so we make sure through a series of the instruments that your deposit is fully refunded even for a longer period of time if necessary.
No, developers will not accept a cheque as a method of payment to reserve a property as international cheques take up to 30 days in Spain to clear. Deposits are normally paid by credit card or bank transfers. For the payment of the Private Purchase Contract, a bank transfer is the most used method of payment. Bank cheques are mainly used for completion after the funds have been transferred into the lawyer´s escrow account. The lawyer will then order a bank cheque from a Spanish bank, but mainly for completion at notary.
No, cash payments are not allowed for the reservation of a new build property. The usual method of payment is credit card or bank transfer since 2012, when the Spanish legislation changed, as the value of the any property is over €1.000, the maximum amount of cash that can be paid when a company is involved in a transaction.
Frequently Asked Questions regarding new build documentation on the Costa del Sol:
Yes, it is safe to purchase a new build property on the Costa del Sol as in Spain there are legal tools such as Act 57/1968 of 27th July 1968 and Act 38/1999 of 5th of November 1999, where it is compulsory for property developers to hand out bank guarantees and/or insurance policies to secure the deposits and stage payments paid for the purchase of a new development should the properties be delayed in the delivery time, not delivered or should the developers file for bankruptcy.
In Spain it is mandatory by law (Act 38/1999 of 5th November 1999), like in most European countries that all new build properties must be sold with a ten year construction guarantee when the property is bought from a developer.
This construction warranty covers structural faults that affect fundamental construction elements such as foundations or the retaining walls. In the case of a fault, the developer is obliged to intervene by law to correct faults or indemnify the buyer for any damages caused, at no cost.
This ten year construction guarantee also includes a three year warranty aimed at those flaws that directly affect habitation and could pose a threat to the owner´s health and hygiene, like damp issue, for instance.
Before the delivery of a new development property or just after completion, both builders and developers will offer owners to carry a snagging survey to check for any problems with a new-build property. If any issues arise, these are normally solved before completion.
During this first year, owners can verify that the property does not have any issues. As the property is being lived, owners will check for faulty door knobs, make sure the painting is correct, verify if there are mismatching floor tiles, faulty window frames, etc, if they haven´t already done so during the snagging.
Most developers will include a separate guarantee on home appliances and air conditioning units which normally lasts two years and is completely independent from the ten year construction guarantee.
Before placing a deposit on a new build or buying an off-plan property, the developer should provide a copy of the building license with its technical certificate from the town hall, the certificate of the land registry stating who owns the land, floor plans of the property itself and building specifications. A copy of the bank guarantees to secure payments should also be presented.
It is also important to obtain information regarding the company who is promoting the off-plan project to make sure it is correctly registered in the Mercantile Registry, with its registration details and NIF number.
Before completion, it is fundamental to obtain a copy of the First Occupation License.
Pro Tip: Hire the services of a qualified registered solicitor to carry the due diligence and legal checks of the new build prior to placing a deposit. We also recommend clients giving lawyers power of attorney to their lawyer to represent them throughout the purchase.
As a non-Spanish buyer in order to be able to purchase a new build property in the Spain clients are required to present their passport or Identification Card for European Union if they are EU citizens, together with the NIE number (a tax identification number in Spain used in all fiscal transactions) regardless of whether the client is resident in their country or a fiscal tax resident in Spain. This document can be obtained in any National Police Station before the completion of the sale. Non-European Union citizens will be required to present their passport.
Spanish citizens, regardless of whether they are tax residents in Spain or in another country are required to present their Passport or Spanish ID card (DNI) in order to purchase a new development property.
Depending on the marital regime, purchasers are required to present documentation certifying the legal matrimonial property regime of community of acquisitions of their country of origin, which is Spain, is divided into three categories:
- Community of property regime (régimen de gananciales).
- Participation in acquisitions regime (régimen de participación).
- Separation of property regime (régimen de separación de bienes).
In order to purchase a new development property it is necessary for buyers to disclose the source of funds to comply with money laundering legislations in Spain. To meet these requirements, purchasers are requested to sign a money laundering form disclosing personal information, as well as provide copies of payslips and income tax returns, to be clear about the source of finance. Bear in mind that there has to be a money trail for substantial amounts of money arriving to Spain. All of these procedures are simply established to comply with the legal requirements.
Having a non-resident bank account is Spain in not a compulsory requirement to purchase an off-plan property in Spain, as payments can be carried through a solicitor´s escrow account, however, we advise clients considering purchasing a property in Spain, to open one in order to pay utility bills and taxes through direct debit from a Spanish bank account.
Pro Tip: Obtaining a NIE number and opening a bank account in Spain can be somehow a lengthy process. We strongly recommend acquiring the services of an establish law firm as they will apply for a NIE number and open a bank account in Spain on behalf of the client as part of their services.
Yes, clients can purchase a new build property to obtain a Golden Visa in Spain, which will give owners the possibility to obtain a Spanish residence permit which will allow them to travel around Europe. The investment amount to obtain a Golden Visa through the purchase of an off-plan property must be of at least €500.000, but can be divided into several properties, rather than just one home.
The Golden Visa will be granted when the property or properties have completed at notary and the property has been put under the name of the applicant at the Land Registry. Once the name of the new owner appears on the Land Registry, the applicant and the immediate family will the able to apply for a Golden Visa.
Pro Tip: Hire the services of a qualified registered solicitor in order to start preparing all the documentation necessary to obtain the Golden Visa or permanent residence in Spain, as soon as the deposit on the property has been paid, to make sure all the documentation is handed over prior to completion in order to avoid any delays with the documentation. Please note that clients have up to one year to apply for the visa once they have completed on the property.
It really depends on the marital regime of the marriage.
For instance, if the couple is married in the separation of property regime (separación de bienes) and they bought one or more properties together for a total amount of €500.000, the investment would not be enough as it would be considered of €250.000 each. However, if a property or more properties were bought for at least €500.000 by one of them, even if they were married under the separation of property regime, the owner could apply for the Golden Visa for the whole family (couple and children), always with proof of funds to be able to live in Spain.
On the other hand, if a couple is married under the community property marital regime (regimen de gananciales), applying for a Golden Visa with a new build investment (or several) with total amount of €500.000 or above, it would be enough as even if it was bought in the name of both (title deeds on the name of the couple), as it would be considered as done by one, so the whole family (couple and children) could apply for the Golden Visa.
Pro Tip: Please note that in order to apply for a Golden Visa by purchasing a new build property in Spain, the applicants must first complete on the property and the name of the applicants must appear on the Land Registry. We do recommend using the services of a solicitor to apply for the Golden Visa.
The Money Laundering and Financing of Terrorism Prevention Law of 10/2010 (of the 28th of April) is a form that requires to be filled by any person wishing to purchase a property in Spain. When purchasing a new build property it is the developer, the estate agent or the buyer´s solicitor who will provide this form in order to accept payments from clients.
The information required to be filled on The Money Laundering and Financing of Terrorism Prevention Law form is:
- Personal details (including full name, date of birth and nationality).
- Address in country of tax residence (accompanied with proof of address like household bills).
- Information on whether the country of residency is a fiscal haven.
- Contact details.
- Marital status.
- Criminal record information.
- Company name, years of employment and sector.
- Source of funds (documents such as savings, inheritance, sale of property, etc.).
- Proof of income (documents such as payrolls, salary, pension, tax declaration, etc.).
- Bank account details.
- Bank statements.
- Public office information (whether buyer or relative works or has worked in public office).
- Transaction description.
- Transaction purpose.
Frequently Asked Questions regarding taxes, costs and finance of new builds on the Costa del Sol:
When purchasing a new build property on the Costa del Sol, as the property will be sold for the first time (no previous transfer of the property) the tax to be paid is VAT which for new build properties is 10% of purchase price. Apart from this tax, new owners will have to pay 1.5% for Stamp Duty in Andalucía (Actos Jurídicos Documentados) for new build properties. Apart from VAT and Stamp Duty, property purchasers will have to pay Notary fees (for a typical residential property is between €500 and €1.800) and Land Registry fees which is 50% to 70% of the notary fee.
If a buyer is a non-resident and is purchasing an asset of over €700.000 in Spain (€1.400.000 for a couple purchasing on both names) the client will have to pay an annual wealth tax with a progressive tax rates that range from 0.2% up to 2.5% on assets over €10.695.996. If a buyer is a fiscal resident in Spain the wealth tax will affect worldwide assets of over €700.000 (there is a further exception of €300.000 for the main residential home).
Pro Tip: We also suggest employing the services of a Solicitor´s who´s fees is 1%+VAT of the purchase price.
The buying costs of a new build property on the Costa del Sol are 13.5% of the purchase price of the property.
When purchasing a new build property, buyers pay VAT (IVA) rather than Transfer Tax (ITP). VAT for new properties in Spain is 10%. Purchasers will also pay Stamp Duty which is Andalucía is 1.5%, notary and land registry fees which are around 1% (to be exact between €500 and €1.800 for notary and 50% to 70% of the notary fees for Land Registry). An additional 1% plus 21% VAT for solicitor´s fees.
When a mortgage is required to purchase a new build home the buying costs are around 15% of the purchase price of the property, as we need to add the price of the property valuation and opening fees for the mortgage.
Pro Tip: Please note that when purchasing with a mortgage in Spain, a separate deed will be signed, but according to new Spanish mortgage law it is paid by the bank. For granting a mortgage, the bank will charge around 1% mortgage opening fee and around 0.5% for administrative fees which include bank valuation, administration costs and provision of funds.
The running costs of a new build property are divided into three types, taxes (paid annually), utility bills (normally paid on a monthly or every two months) and optional expenses which payments can be either monthly or paid on a yearly basis:
- Non-resident Income Tax (Impuesto sobre la Renta de no Residentes / IRNR) for non-residents only.
- Personal Income Tax (Impuesto sobre las Rentas de Personas Fisicas / IRPF) for residents only.
- Council Tax on Property (Impuesto de Bienes Inmuebles / IBI) both residents and non-residents.
- Rubbish Collection Tax to be paid by both residents and non-residents in Spain.
- Wealth Tax (Spanish Residents with over €700.000 worldwide assets and non-residents with assets in Spain over 700.000 Euros).
- Community Fees (Applicable for owners that live in a community of owners).
- Home Insurance.
As a tax resident in Spain you are required to have at least 33.5% of the funds of the price of the property to be able to purchase an off-plan property, as banks in Spain lend up to 80% of purchase price of a home, therefore 20% are used to pay the balance of the property and 13.5% for buying costs.
When purchasing with a mortgage, it is a little more expensive, as you should have 35% of purchase price, 20% of the price of the home to pay the deposit (having to mortgage 80% of the property to pay the balance) and 15% for buying Costs.
The buying costs purchasing with a mortgage are:
- 10% for VAT Tax.
- 1.5% Stamp Duty (in Andalucía, other percentages apply to other regions of Spain).
- 1% Notary and Land Registry (this is an estimate cost).
- 1% for a solicitor (plus 21% VAT).
- 1% mortgage opening fees (approximate costs, different banks charge different fees).
- 0.5% for bank valuation, administrative fees and provision of funds.
As a Spanish non-tax resident you are required to have at least 43.5% of the price of the property to purchase a new build property. Banks in Spain finance up to 70% of purchase price of an off-plan property for non-residents, therefore you are require to have at least 30% to pay the balance, plus 13.5% extra for buying costs, which are divided into:
- 10% is VAT Tax.
- 1.5% Stamp Duty.
- 1% Notary and Land Registry costs.
- 1% for the services of a solicitor.
Please note that an additional 1.5% of the purchase price is required if you wish to purchase with a mortgage, as 1% will be charge by the bank as a mortgage opening fee and 0.5% for bank valuation, administrative fees and provision of funds, making a total of 45% of the total price of the property (70% would be financed through a mortgage, 30% would go towards the new build property and 15% for buying costs).
Yes, non-fiscal residents in Spain from the European Union can finance up to 70% of purchase price of a new build home through a mortgage. Non-tax residents in Spain from any other country outside the European Union may obtain up 60% of purchase price depending of the country of origin of the applicant.
Pro Tip: If you are uncertain of the amount that could be borrowed in order to purchase an off-plan property, we recommend contacting different banks prior to visiting any off-plan projects. We have strong relationships with different banks and financial advisors that can help obtaining funds to purchase a property in Spain to most countries in the world. We can send any interested party a list of local banks and financial advisors that can provide clients information regarding their conditions and lending criteria without obligation.
In most new developments clients will find a what´s called a “developer´s mortgage” to assist them with the purchase of a property, which basically means two possibilities:
- Mortgage subrogation to an existing developer´s existing mortgage.
- Special mortgage package for a certain new development.
One of the most important aspects of a mortgage subrogation from the developer is to check the costs involved in subrogating to this type of mortgage, as when clients look at the conditions these always seem very favourable, but clients need to analyse the overall cost.
Some developers will also propose a special mortgage package which term´s were previously negotiated the bank in case the clients are not interested in subrogation. These mortgage packages are designed to facilitate the purchase of the off-plan property.
As mortgage conditions vary from development to development, it is very difficult to come to a general answer and each particular case has to be analysed individually.
Pro Tip: Since developer mortgages are normally at least several months old and conditions are always changing in the financial world, it’s always a great idea to present the mortgage subrogation offer or the mortgage package offered by developer to other banks or financial advisors to learn if and how they can improve the rates.
Yes, in our portfolio of new developments, we commercialise some off-plan properties where finance is available up to 100% of purchase price for Spanish tax residents, in this scenario you are required to have just enough funds available to cover the buying costs which are around 15% of the price of the property when purchasing with 100% finance.
There are different ways in which we can help our clients in obtaining finance for their new build home on the Costa del Sol, depending on which option the clients prefer:
1. Finance of Spanish property through a mortgage in the client´s country of Origin: If a client wishes to finance the purchase of their new build in their home country rather than financing the purchase through a Spanish bank, they will contact the bank directly and we will send all the required documentation for the client to present to the bank and obtain finance.
2. Finance through a resident or non-resident Spanish Mortgage: Depending on different factors, most clients prefer to finance the purchase of their new build on the Costa del Sol, through contacting directly different local banks. These types of mortgages are called either resident or non-resident mortgages and tend to have quite interesting conditions. We collaborate with different banks in Spain and can accompany clients to meet the different bank managers, have their cases studied and assist in any way we can (present documentation of the new build, assist translations, etc.).
3. Finance of a new build home through a Financial Advisor: This option is very similar to the one above, with the difference that the financial advisor will bring a series of options to the client and charge a small fee to process the mortgage on behalf of them.
Yes. Many of our clients, residents and non-residents alike, request assistance with obtaining a mortgage for the purchase of a property.
We can provide a full list of different banks that will be able to lend funds to our clients.
Always compare any mortgage offer with at least two or three banks and return to them to see if they can improve their offers, once you have received the best option.
For non-residents, as mortgage rates are higher in Spain for them than for tax residents in Spain, we always recommend check mortgage conditions in their home country as well.
Pro Tip: If a foreign bank does not lend on a Spanish property, clients can always use the option of equity release on a residence in the country of origin. Equity release in their home country may have better conditions and rates when compared to a non-resident mortgage for a property in Spain.
Frequently Asked Questions regarding community fees on new builds on the Costa del Sol:
If a property is part of a new development with communal areas shared with other property owners, then each owner is required to pay a community fee, also known as service charge, to cover the maintenance costs of the communal areas within the complex. Depending on the community the services and fees will vary, but when speaking of off-plan properties within a community of owners these typically include the maintenance costs of communal areas (including gardens, hallways, stairs, garage areas, storage areas, etc), swimming pools, sport facilities, security, lifts, insurance and maintenance of external communal elements.
If a new build complex is located within a larger community, properties owners may have to pay micro community (for the complex itself) and macro community for the communal areas of the estate in which it is located, this typically occurs in larger complex areas that area located for instance within a golf course. Normally macro community fees are paid for the maintenance of internal private roads, lighting, security guards and maintenance of general external communal areas within close proximity of the complex.
A property owner becomes member of the Community of Owners with all its rights and obligations when they are handled their brand new property. Each property also owns a percentage of the communal areas and this percentage will vary according to the size of the property and the amount of properties within the complex, the larger the household, the higher community fees.
The estimates for the costs of the community fees given during the visit of new development are very precise. Developers will calculate the maintenance and running costs of the communal areas for the year, these are then divided these costs into 12 months and finally between all the dwellings within the complex, so that the community fee for each property can be calculated on a monthly basis. The community fees are usually around €200 and €300 a month for a 2 or 3 bedroom apartment located in a community and included costs like maintenance of the communal gardens, swimming pool, lifts, security, cleaning personnel and insurance for communal areas.
When a new development is delivered the promoter will set a budget for the expenses of the community maintenance for the first year. This amount with be into the percentage of square meters that each owner possesses, taking also into account the square meters of parking spaces and storage rooms owned by each proprietor.
When the new development is released, the developer chooses a company specialized in the Administration of the Community of Owners (Administrador de Fincas) to assist with daily running activities within the community. When the property is delivered the owners will know the exact amount of the community fee for the first year, however, a close estimate to what the community fee will be is given when clients first visit a new development.
Once all properties within a new complex have been delivered, an annual general community meeting will be held and all owners (or their representatives if they are not physically present) will decide whether they wish to continue with the company who is administrating the community or choose another company. They will also decide whether they wish to increase or lower the community budget for the following year.
Yes, especially after the first year of the complex being delivered, as during the first year the developer organizes the costs and expenses to run the community on behalf of the community of owners. At the end of the first year it is the duty of the administration company (Administrador de Fincas) to present the full balance of all the income and expenditure for that particular year. When the accounts are revised, owners vote whether they wish lower, maintain or increase the community budget for the following year. The majority of votes decide the budget, as well as other aspects of community maintenance, for instance, to increase or decrease certain maintenance services like pool maintenance, cleaning of communal areas (mainly gardens, pool and other communal areas like hallways and stairs), security, etc.
When a new development is delivered the developer chooses which company specialized in the Administration of the Community of Owners (whose purpose is to assist property owners to in all aspects of running a community) will run the community the first year. It is rare that owners change the administration company, but if in the following General Community Meeting the majority of property owners decide to choose a different company to run it by majority of votes, this can be done.
Yes, any property owner can apply to be the President, Vice-President or Treasurer of a Community of Owners. Normally, the owners who run for any of these positions will be permanent residents within the community as the amount of work involved is quite large and requires weekly involvement. Their job is to supervise the work of the company that runs the community, make payments for the different services that the community requires and oversee that the works are done correctly within the community.
Any owner wanting to run for a particular position within the community will have to be elected by the majority of owners with the community during the annual general community meeting. The term within the position lasts a minimum period of a year, although it is quite common that if the community runs smoothly, owners in these positions will stay in such position for many years.
Frequently Asked Questions regarding completion on new builds on the Costa del Sol and after sales services:
No, it’s not an indispensable requisite that buyers attend completion at notary. A solicitor can carry the completion on behalf of their client and represent them throughout the purchase process. In order for a solicitor to represent the buyers during the completion at notary, buyers are required to give their solicitor power of attorney either in Spain or in their home country. Normally, after completion, lawyers will organize the direct debit for taxes, community fees and utilities on their behalf to their Spanish bank account as well. They can even hold the keys on behalf of the client, if so is required.
Yes, we can assist our clients with the snagging of their new build property by carrying it ourselves free of charge or by recommending different chartered surveyors to carry the snagging on behalf of the client at extra cost.
Yes, we work with different law firms specializing in real estate law on the Costa del Sol. Most of these firms have offices along the coast as well as other European capitals. The first consultation is free of charge. We can send clients a list of law firms that specialise in real estate law and speak the native language of the client and the clients contact the law firms directly without obligation.
It’s entirely up to the buyers to decide so. We do recommend our clients if they are considering purchasing a furniture package from a developer, to also present the floor plans to other companies, to be able to compare what other interior designers can do for them and what are the prices elsewhere before making a decision.
It depends on the size of the property. On average, new home buyers spend around 7% to 8% of the property price to furnish their new build home. Owners that dedicate the use of the property for short-term holiday lettings, apart from enjoying it themselves, tend to spend less.
To give you an idea, great furniture packages put together by an interior designer for a two bedrooms, two bathrooms holiday apartment starts at about €8.000 to fully furnish a brand new home.
New build properties consisting of at least three bedrooms can be furnished at a budget of €10.000.
In regards, to brand new semi-detached villas or townhouses, as these are normally three bedrooms and are larger than apartments, buyers expected to spend at least €15.000. Smaller sized, three bedroom villas can be furnished by an interior designer for a starting price of €25.000 / €30.000, while on larger villas it is normal that clients spend at least €200.000 to fully furnish a luxury contemporary new build.
Yes, we work with different interior designers that work with different budgets and different design styles (Andalusian, contemporary, Mediterranean, minimalist, modern, eclectic, traditional, amongst many others). We can provide a list of companies that specialize in their own style and clients can consult them directly without obligation.
Pro Tip: We suggest our clients to first send a floor plan of the property they wish to furnish and obtain proposals from the expert, modify if necessary and once the client has decided which interior designer to contract, to have them visit the property itself so that they obtain a better feel of in the interior and exterior areas of the property they are purchasing, prior to ordering the furniture pieces.
New build homes do great in the rental market, regardless on whether the owners wish to rent it shot-term or long-term. Brand new homes are very appealing, have the added value that they have been used little or nothing at all, and everything is clean and works smoothly. These properties are normally located in developments that have many extra services in the communal areas such as communal swimming pools, gyms, etc., so tenants are willing to pay premium prices for right property.
Unlock Your New Build Dream on the Costa del Sol
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