For many, the dream of living on the Costa Blanca begins with the desire for a home in one of Europe's most sought-after regions. But there is more than just anticipation between property adverts and handing over the keys: questions about taxes, hidden costs, infrastructure or possible uses are often underestimated - and can be expensive in retrospect.
Andreas Schaich has been guiding buyers through the property process in the region for years. In an interview with CBM, he provides practical insights: When is it worth renting instead of buying? Why can a missing sewer connection become a legal stumbling block? And what should you pay particular attention to so that your first property doesn't soon become a temporary solution? A compact overview for anyone arriving on the Costa Blanca - and wanting to stay.
Rent or buy? When is renting the better choice for new arrivals?
I think you should rent if you don't know the area yet and want to see how you cope with the climate first. Wintering is also a good option for this. Many of our customers rent from November to February to get an impression of the country and its people. During this period in particular, you can rent properties at a flat rate and don't have to pay the high seasonal price. Buying is certainly the better financial decision in the long term and offers a certain degree of security. If the tenancy is terminated, you have to move. This cannot happen if you buy. Buying also offers various options for use. Own use, family, friends, capital investment. If the market performs well, you can generate a secure return with a property. (In the end, everyone has to decide for themselves which option is better for them and whether they want to take the financial risk of financing the property, for example.
Taxes & ancillary costs: What financial obligations do many buyers overlook?
In Spain, the one-off costs of buying a property are relatively high. For example, you only pay 10% of the purchase price for the property transfer tax. This puts Spain at the top when compared with other European countries. In addition, there are fees for the notary and the land registry as well as additional costs for tax consultants or simply account opening fees. This quickly adds up to around 12.5 % of the purchase price. If you also take out a loan, there are a further 1.5-2 % in fees and taxes. This is often overlooked by buyers. It is therefore advisable to consult a real estate agent, tax consultant or lawyer before buying, who will explain the exact additional costs and provide advice and assistance. Not to be forgotten are additional expenses in the form of renovations or the restoration of the electricity and water supply if these were cancelled by the former owner in order to save costs. To avoid any surprises, you should also check that the seller is in good standing with their current payments and that there are no tax arrears associated with the property.
Bureaucratic hurdles - What documents are required for the purchase, and where do they often fail?
Bureaucracy does not stop at Spain. At the moment, Spain is implementing many EU laws that have been generously ignored until now. A tiresome topic here are certificates of habitability, sewer connections or rental licences. To ensure a smooth sale / purchase, we recommend checking the following documents.
- If the house is connected to the public sewer system, it can be connected or a septic tank complying with the regulations has been installed.
- Does the property have an official electricity/water meter?.
- If there is a discrepancy between the land register and the cadastre, the property must be corrected.
- Does the house correspond to the latest georeferences / measured values or do the buildings and structures have to be remeasured?.
- Are all parts of the building (annexes, extensions, additions, wells, garages, pools) recorded in the land register?.
- Have all taxes, e.g. property tax, been paid by the seller?.
- Is a valid energy certificate available?.
- It should be checked whether there are any urban planning offences. Each municipality issues a paper for this purpose on request.
- Is there a valid certificate of habitability or declaration of responsibility?.
- If the property is to be rented out as a holiday home, you should check in advance whether you can obtain a rental licence in this zone.
These are the most important things to check so that there are no surprises later on. In principle, properties can also be purchased through a notary even if not all the requirements are met. Ultimately, it is up to the buyer to decide how they want to use the property and whether they want to apply for a rental licence.
Most sales currently fail due to a non-existent sewer connection, which means, for example, that no certificate of habitability can be updated and therefore no rental licence can be obtained.
Buying property: What common mistakes make foreign buyers on the Costa Blanca?
Foreign buyers are strangers in Spain and are often unfamiliar with the customs and legislation. If you save in the wrong place or choose the wrong partner, you are doomed and will regret your decision later. To ensure that this does not happen and that every buyer has fun with their property later on, we strongly recommend buying with a reliable estate agent, tax advisor or lawyer. Google reviews and customer comments are a good help here. Those who save too much at the beginning usually end up paying more in the end.
Market development:
What current trends are shaping the local property market at the moment?
Due to the tight housing situation, more and more young families and cohabiting couples are moving to the countryside. They are buying a plot of land, fencing it off and living in a tiny house or a caravan / camper van. This is a trend. People want to live as freely and independently as possible. However, this is legally questionable and always leads to discussions. The flipside is the trend towards more and more luxury living space. Prices for luxury villas and luxury flats in the first sea line or on the beach are currently skyrocketing. Some investors are speculating with this type of property and driving the price spiral even higher. I know of properties that have been sold for 1.5 million off plan. They were sold on for 2.5 million shortly before completion and then found a new owner for 3.2 million euros a year later. People who have money don't want to wait 2-3 years for their property of desire, they want to buy immediately and are prepared to pay a high price for it.
Finally - expert tip: In your opinion, what should immigrants bear in mind in order to arrive successfully in the long term?
It's actually quite simple. We live in a climatic and scenic paradise here. If you prepare well and find the right property in the right location, it shouldn't be a problem.
It is essential to consider the connection to the nearest infrastructure. If you are too far away from schools, shopping facilities, restaurants, etc., you will often have to move again after 4 - 5 years. This should be avoided as every change of property between 13% - 22% results in the destruction of capital. So it is better to make the right decision right away.
Regardless of everything, in my experience most property decisions are made on instinct and are not always the result of what you imagined in your dreams. But that's what makes it exciting for everyone involved.
