Buying Guide Details

Buying Property on the Costa Tropical

The gardens of Alhambra, Granada, Spain

This coast of southern Andalucia (Andalusia) is next door to the Costa del Sol and property buyers and investors will notice that it shares the same climate but also find that property on the Costa Tropical is notably cheaper. There's a real Spanish feel to the area which reflects both its popularity with domestic property buyers and the sophisticated taste of its overseas property owners.

Where to buy property on the Costa Tropical

Property buyers with a taste for local history will love its proximity to Granada and the Alhambra. As well as gorgeous beaches, the mountains of the Sierra Nevada are only an hour away, with skiing from November to March, increasing the versatility of a property on this coast. Activities such as rock climbing and white-water rafting make the mountains an appealing year-round backdrop to this coast. Abandoned inland properties can provide the intrepid investor with an opportunity to purchase property cheaply and renovate.

For a property in a beach resort, Motril might be the best place to look - fine beaches, plenty of tourist attractions and even a nine-hole golf course. Along the coast, Salobreña has a mix of modern facilities along its seafront but with a beautiful Old Town and Moorish castle draped over the steep rock behind. Nerja, where this coast becomes the Costa del Sol, is also rated highly, and is located just 50 kilometres from Malaga.

Property buyers on the Costa Tropical looking for short-term gains are starting to run out of options in the south, and this often overlooked part of the coast may just offer the property bargain that they are looking for.

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The Process of Buying Property on the Costa Tropical

Anyone wishing to buy (or sell) a property on the Costa Tropical must first obtain from the state – in person – a fiscal number for foreigners known as NIE (numero de identificacion de extranjeros)
Once the property buyer has received the NIE number, the property buyer’s lawyers can make an offer on their behalf. When a price has been agreed, it is recommended that both parties sign a preliminary agreement which outlines details such as the completion date
A deposit of 10% is the normal amount placed to secure the deal. After this, if the property buyer pulls out they lose the full deposit but, should the seller decide not to go ahead, he/she must return double the amount of the deposit – i.e. 20% – to the property buyer
If buying property on the Costa Tropical off-plan, it is usual for payments to be broken into stages, the balance being paid when construction finishes
On completion, when all the necessary checks have been carried out, both parties sign the escritura (title deeds) in the presence of a notary. The property buyer then pays the balance, plus all other fees and taxes. Copies of the deeds are sent to the Land Registry and the tax office.

Homes Overseas Property Club

Homes Overseas has joined forces with a collection of IFA specialists to form the Homes Overseas Property Club (HOPC), designed for existing and prospective overseas property homeowners.

The Club – which has access to international lawyers in no fewer than 43 different countries - has been set up in order to guide people through some of the various issues relating to buying and maintaining a property overseas. It offers advice on a range of topics, including financial, legal, insurance, taxation, property management and foreign currency matters.

For further information please telephone 0845 838 7142 or email info@homesoverseaspropertyclub.com

Fees & Taxes

Taxes and fees usually amount to around 10% of the total purchase price of the property on the Costa Tropical
Taxes payable depend on whether the property on the Costa Tropical being purchased is new-build or resale. Currently, transfer tax of around 7% is applied on resales, which includes stamp duty. For new-build properties, VAT (IVA) of 7% is payable in addition to 1% stamp duty
On top of this there is also plusvalia (capital gains tax), which is set by the local authorities and depends on the area concerned and the amount of profit being made on the sale. This is usually paid by the seller
If the property buyer is purchasing land or commercial property on the Costa Tropical rather than residential property on the Costa Tropical, VAT is 16% as opposed to 7%. Stamp duty remains the same
Most Spanish lawyers charge around 1% of the final purchase price, and notary fees are around 0.5%
Agents’ fees can vary anywhere between 2% and 15% – so be careful not to be ripped off.

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