Complete Guide for Foreign Buyers Purchasing Property on the Costa del Sol
Buying a property on the Costa del Sol is a dream for many people: fantastic weather, Mediterranean lifestyle, beautiful beaches, and excellent investment opportunities. However, before making this important decision, it is essential to understand the legal, financial, and tax requirements involved for foreign buyers.
This guide explains everything you need to know and do, clearly structured into three stages:
➡️ Before buying
➡️ During the purchase
➡️ After the purchase
Whether you are buying new build or resale property, this article will help you feel informed and confident.
If you are a foreigner and want to buy a property on the Costa del Sol, you must obtain a NIE (Número de Identificación de Extranjero).
This number is mandatory for all legal and financial procedures, including:
Buying a property
Paying taxes
Applying for a mortgage
👉 You can apply for the NIE:
✔️ In Spain, at an immigration office or police station
✔️ Through a Spanish consulate in your home country
Although not legally mandatory, it is highly recommended to open a Spanish bank account. It will be needed to:
Pay deposits and purchase costs
Pay taxes and notary fees
Set up utility payments
Before viewing properties:
Define your total budget (including taxes and costs)
Decide whether you will buy with cash or need financing
Yes — foreign buyers can apply for a mortgage with a Spanish bank, although conditions differ from those for residents.
In general:
✔️ Spanish banks finance up to 60%–70% of the property’s valuation
✔️ Proof of stable income is required
✔️ Documents such as payslips, tax returns, or financial statements must be provided
💡 Having a Spanish bank account and professional financial advice can significantly improve approval chances.
New developments on the Costa del Sol are extremely popular, especially modern homes with pools, garages, storage rooms, and communal facilities.
When buying a new build:
✔️ A reservation contract is signed
✔️ An initial deposit is paid (usually 5%–10%)
✔️ Payments are made in stages during construction
✔️ Final payment is made upon completion and handover
Resale properties are already built and ready to move into.
In this case:
✔️ Property viewings are immediate
✔️ A reservation or deposit contract (Arras) is signed
✔️ A deposit is paid to secure the property
This contract secures the property and includes:
✔️ Purchase price
✔️ Deadlines
✔️ Penalties if either party fails to comply
Before signing at the notary, it is essential to verify:
✔️ The property is free of debts or charges
✔️ Community fees and taxes are up to date
✔️ Building licenses and legal documentation are in order (especially for new builds)
If you apply for a mortgage, the bank will require an official valuation to determine the market value of the property.
This is the final legal step:
📌 The Title Deed (Escritura Pública) is signed
📌 Ownership is officially transferred
📌 The remaining balance is paid
✔️ VAT (IVA): 10% of the purchase price
✔️ Stamp Duty (AJD): approximately 0.5%–1.5%
✔️ Notary and Land Registry fees
✔️ Property Transfer Tax (ITP): approximately 7%–10% (depending on the region)
✔️ Notary and Land Registry fees
After completion, the property must be registered in the Land Registry, officially confirming you as the legal owner.
Connecting utilities (water, electricity, gas)
Registering with the local town hall if you plan to live here
Paying annual property taxes (IBI)
✅ Always use professional legal and tax advisors
✅ Fully understand all costs before buying
✅ Decide early whether financing is required
✅ Work with experienced local property professionals
Buying a property on the Costa del Sol is an exciting investment and lifestyle decision. With the right guidance and knowledge, the process can be smooth, safe, and transparent.
If you would like personalized advice, information about new developments, or support throughout the entire buying process — from the NIE to the notary — I will be happy to assist you.
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