The Costa Blanca, with its stunning Mediterranean coastline, vibrant expat community, and relatively affordable property prices compared to other parts of Spain, is a highly desirable location for property buyers. Whether you’re looking for a holiday home, an investment property, or a permanent residence, purchasing real estate in this region requires careful consideration. This guide will walk you through the essential factors to keep in mind before buying a property on the Costa Blanca.
1. Understanding the Costa Blanca Property Market
The Costa Blanca extends from Dénia in the north to Pilar de la Horadada in the south, covering popular towns such as Alicante, Benidorm, Torrevieja, and Javea. Each area offers different advantages:
- Northern Costa Blanca (Dénia, Javea, Moraira, Altea) – More scenic, mountainous, and generally more expensive due to exclusivity.
- Central Costa Blanca (Alicante, Benidorm, Villajoyosa) – Urban centers with bustling tourism and good rental potential.
- Southern Costa Blanca (Torrevieja, Orihuela Costa, Guardamar) – Flat terrain, larger expat communities, and more affordable properties.
2. Budgeting and Costs Involved
When budgeting for your Costa Blanca property, you should factor in additional costs beyond the purchase price:
- Property Transfer Tax (ITP) – For resale properties, this is typically 8-10% of the purchase price.
- VAT (IVA) and Stamp Duty – New-build properties are subject to 10% VAT plus around 1.5% stamp duty.
- Legal and Notary Fees – Usually range between 1-2% of the property price.
- Registration Fees – Costs to register your property in the Land Registry.
- Agent Fees – Usually paid by the seller, but it’s important to confirm.
- Ongoing Costs – Include community fees (if applicable), property tax (IBI), and utility bills.
3. Finding the Right Property
Before deciding on a property, consider:
- Purpose – Are you buying as a permanent residence, a holiday home, or a rental investment?
- Property Type – Apartments, villas, townhouses, or rural fincas.
- Location – Proximity to beaches, amenities, schools, and transport links.
- Resale vs. New Build – New builds may have modern features and warranties but can be more expensive than resale properties.
4. Legal Considerations
Spain has specific laws for foreign buyers, so hiring an independent English-speaking solicitor (abogado) is highly recommended. Key legal checks include:
- Ensuring the property is legally registered in the Land Registry.
- Checking for outstanding debts (mortgages, community fees, taxes).
- Verifying planning permissions (especially for rural properties).
- **Understanding the Golden Visa option if purchasing over €500,000 (for non-EU buyers).
5. The Buying Process in Spain
- Finding a Property – Work with trusted estate agents and visit multiple options.
- Making an Offer – Prices are often negotiable.
- Signing a Reservation Agreement – Usually requires a €3,000-€6,000 deposit to reserve the property.
- Due Diligence – Your lawyer checks the legal status of the property.
- Signing the Purchase Contract – Typically after 30-60 days, requiring a 10% deposit.
- Completion at the Notary – Final payment is made, and the deed is transferred.
6. Financing Options
- Spanish Mortgages – Available to foreign buyers, typically covering 60-70% of the property value.
- Home Country Financing – Some buyers secure a loan from their home country.
- Cash Purchase – Reduces paperwork and speeds up the process.
7. Residency and Taxes
- Residency – If you plan to live in Spain for more than 183 days per year, you become a tax resident.
- Taxes – Spanish property owners must pay local IBI tax, non-resident tax (if applicable), and capital gains tax upon resale.
8. Common Pitfalls to Avoid
- Not hiring an independent lawyer.
- Skipping legal checks on debts and planning permissions.
- Underestimating ongoing costs.
- Ignoring community fees in urbanizations.
- Not considering currency exchange rates when transferring money.
Conclusion
Buying property on the Costa Blanca is an exciting opportunity, but it requires thorough research and planning. By understanding the legal, financial, and market factors, you can make a well-informed decision and avoid common pitfalls. Whether you’re looking for a beachfront apartment in Benidorm or a quiet villa in Moraira, Costa Blanca has something for everyone.
