Buyers FAQ

What are the costs involved?
Property prices stated on availability lists will generally not include purchase costs such as taxes, legal fees and registry fees so these need to be taken into consideration when searching for a property.

The main cost to factor in is the purchase tax. 10% VAT is payable on first occupancy properties which is payable instead of the 7%-10% Property Purchase Tax (ITP) usually payable on property purchases in Spain is waived. As such, buying a new build is around 3% more expensive than buying a resale property.

You should allow another 3% of the purchase price to cover legal, notary and registry fees. As a rule, if you allow 13.5% of the purchase price for all purchase costs, you should come in under this figure.

If you are buying a plot and project to build a villa, these figures will change as different tax rates are charged on the plot, material and construction. The developer or achitect will be able to confirm figures for your specific project.

How do I know the development will be legal?
The rules and practices have tightened significantly since the 1980’s and now all new developments must have planning permission in place and building licences before construction starts. This process includes ensuring the developer is in a financial position to complete the development, the land is assigned for residential use, the building meets all local planning stipulations and the properties meet the standards required for a residential property.

The local town hall will do full due-dilligence before granting the building permits and your solicitor will do their own due-dilligence before allowing you to sign the Purchase Contract. Your solicitor will not allow you to commit to anything until they are 100% certain that the development and developer are sound.Visit our partners,shoes – leaders in fashionable footwear!

Is my money protected during construction?
Yes, another thing your solicitor will check is that there are bank guarantees in place. The bank guarantee is an insurance policy taken out by the developer to ensure investors get 100% of their money back in the unlikely event there is an issue with the development or developer.

How long will contruction take?
This depends on how far along the project is. Properties can be reserved before construction starts or sold during construction or when key-ready. If buying before construction has started, the developer will provide an estimated completion date. If buying during construction, the Purchase Contract will include a completion date.

Is the completion date accurate?
If the developer goes past the completion date statedin the Purchase Contract there will be penalties so they ensure they finish within the agreed period. There will usually be a clause within the contract to state that the completion of construction can be extended by up to six months. This is not usually a negotiable term so it is possible handover may be a little longer than expected but you will know the latest possible date before signing the Purchase Contract.

What other guarantees are there?
An insurer will sign off each stage of the build to ensure it is done correctly. Once they have signed off the final stage they will issue ten year guarantees against any structural damage caused to the building due to faults or defects affecting the foundations, supports, beams, framework, load-bearing walls, or other structural elements which directly jeopardise the building’s mechanical resistance and stability.

Additionally, for a period of three years, damages caused to the building by faults or defects in the constructive elements or services which result in the building failing to meet habitability requirements are also covered by the developer.

The developer will likewise be liable for damages due to construction faults or defects affecting elements of the finish work for a period of one year from the date of completion. This is the snagging period. If the property is brought over a year after the completion of the build, this period will be over but most developers will allow a one-off snag.

Will the property be inspected before handover?
The local town hall will visit the development before once the build is near completion to sign off that the development meets the plans submitted, quality specifications as well as the submitted plans for the buildings and communal areas, services such a water, power and sewarage are in place and sufficient, and both the development and properties are generally fit for residential use. Once they are content that everything is as it should be, the town hall will issue the First Occupation Licence which makes the properties legal for residential use.

Your solicitor will not allow you to complete the purchase, and banks will not release mortgage funds, until the First Occupation Licence is granted. If you are looking to rent the property out, this licence also needs to be in place to apply for the Touristic Licence required to rent any property or a short-lets basis.

If you are in Spain, most developers will invite you to visit the property and draw up a snagging list before handover. Where possible, this work will be done before you complete the purchase and pay the final installment.

Will the property come furnished?
The furniture and furnishings in the show homes, photos of the show home or renders, are usually just for illustrative purposes so buyers can picture what fits in each room and how the homes could look once furnished.

It is the general rule that the property will come unfurnished with white walls. Usually, kitchen appliances and cabinets will be included as well as sanitryware in the bathrooms and spotlights in these areas plus the hallways. Ceiling lights in the living areas, balcony and bedrooms will not be included to ensure owners have a blank canvas to furnish the property as they wish.

We can recommend several providers of furniture packs who will include ceiling lights, curtain railes, mirrors, pictures, etc… and install these along with the furniture. If you leave the keys with the solicitor or ourselves on completion, this can usually be done before your first visit.

If you buy the show home, it is possible that this will come furnished as seen but this will need to be confirmed with the developer before signing the Purchase Contract.

How much will the community fees & taxes be?
Until the first Annual General Meeting (AGM) of the owners, the exact community fees will not be known. This is because it is up to the owners to decide what services they want for their community (full time gardeners or a contracted garderner, security guards, a lifeguard for the pool, etc…) and how these will add up to. The exact figure will also depend on the size of the property. That said, the developer should be able to give you a ball-park figure.

The community fees cover a wide variety of things. Firstly, there is the maintenance and upkeep of the pool and gardens. This includes pool and irrigation water, gardeners, plants, etc.. Then there is the cleaning of the communal areas and lighting to illuminate these at night. The cost also covers insurance for the community, maintenance of the exteriors and communal areas of the buildings, occasional painting of the community and any unforeseen expenses. Lastly it covers the cost of the administrators who run the community day to day, make sure everything complies to laws and regulations, chair the AGM and report to the community.

Likewise, it is not possible to provide an exact figure for the Council Tax (IBI) or Garbage Collection Tax (Basura) until the first bill arrives. Again, the developer will not the local rates and property size so they should be able to provide a good estimate of what thes will be.

Utility bills are usually payable every two months. It is really hard to estimate what they will be as people vary so much in how much air-conditioning they use, how efficient their appliances are, whether they have baths or showers, how many people are in the house, etc…


If you have any other questions, please feel free to contact us directly and ask. You can also read our guide to purchasing a new build on the Costa del Sol in the link at the top of this page.