Purchasing property in Marbella may seem as easy as saying, ‘I want to buy a house.’ However, in reality, the process entails more than simply finding and purchasing a property of your choice. To assist those considering property acquisition in Marbella, we’ve crafted a comprehensive guide to streamline the purchasing journey.
Research Well When Planning to Buy a Property in Marbella
When investing in property, thorough research and preparation are essential for a successful start. This holds especially true when navigating the real estate market in Marbella, where the first crucial step is finding the right real estate agent.
The internet plays a pivotal role in this process, serving as a valuable tool for individuals, particularly those residing abroad, interested in purchasing property or relocating to Marbella. Online research enables you to explore available properties in advance, providing valuable insights into the market.
In Marbella’s real estate landscape, properties are openly accessible to most real estate companies for marketing and sale, thanks to a shared database among firms. With numerous real estate companies and agents operating in Marbella collaboratively, prospective buyers have a diverse range of options to consider when selecting an agent.
It’s advisable to approach multiple firms or agents initially, keeping an open mind during the research phase. While this approach offers a broader selection, ultimately, narrowing down your choices to one is crucial. Establishing trust and confidence in your chosen agent, who is able to be objective with you, is paramount for a smooth property transaction.
At Optimum Marbella, we pride ourselves on a small team who foster strong relationships with clients, both buyers and sellers, and who offer an in-depth knowledge of the industry. We encourage clients to carefully consider their options before making a final decision, ensuring they feel comfortable entrusting us with their property aspirations.
Why you should use a Real Estate Agent
Completion of a Property Purchase in Spain – Escritura de Compraventa
All involved parties must be present for the completion, including buyers, sellers, and their legal representatives or lawyers, as well as bank personnel for loan redemption or subrogation, and any banks providing new mortgages.
Upon signing the title deed at the notary’s office (notaría pública), possession and full responsibility for the property are immediately transferred to you. Payment for the property purchase is also processed simultaneously through bank cheques. This payment method is considered the safest in Spain, ensuring security for both parties, as funds are transferred only when the property is formally transferred to the buyer, with banks providing swift and verified confirmation of payment.
Subsequently, upon signing the notarial sale deed and settling all necessary taxes, the deed is registered at the Land Registry, a process that typically takes up to three months. Following registration, the original deeds and all related invoices are made available. At this point, you have the freedom to update utility contracts such as water, electricity, gas, telephone, and homeowners association bills in your name and banking details.
Things to Keep in Mind After Buying Your New Home in Marbella
After acquiring your new home, the subsequent procedures involve settling all taxes and completing the registration of your property ownership. This process can be facilitated with assistance from your lawyer or solicitor.
It’s crucial to recognize that the expenses incurred during the property purchase are not the sole financial obligations, as additional costs arise after the acquisition. Our website features an informative article detailing purchase taxes and property acquisition fees in Marbella.
Registering Your New Property in Marbella
As stated in the preceding stage, it is essential to update the name and banking information on all previous utility and community bills to reflect your ownership. In some cases, a lawyer may assist you with this process if agreed upon.
Upon settling all taxes, the next step involves registering the property at the local property registry to establish your ownership rights. The following documentation is typically required for this process, which your lawyer can handle:
– N.I.E and an authorized copy of your Passport
– Confirmation of ITP Tax Payment
– Copy of the seller’s IBI Tax Payment
Expenses Related to a Property
Maintenence
The expenses associated with maintenance (such as cleaning, repairs, renovations, utility bills, garbage collection, etc.) vary based on the size and nature of the property. For instance, a spacious villa with a garden and pool necessitates significantly more financial resources and effort to upkeep compared to a modest apartment.
Community Fees
Property owners within any development, building, or complex featuring shared common areas are legally mandated to become members of the Community of Owners (Comunidad de Propietarios) and contribute towards community fees. These fees are allocated for the maintenance of common areas and any additional services approved by the community during the annual general meeting. The amounts can range from hundreds to thousands of Euros.
Property Ownership Tax (Impuesto Sobre Bienes Inmuebles – IBI)
The local tax on property ownership varies depending on the residency status of the owner. It is determined based on the “valor catastral” (administrative value typically lower than the market value) established by the town hall. The tax rate ranges from 0.4% to 1.1% of the “valor catastral,” contingent on the region. This amounts to an annual payment of €200 to €1500.
Garbage Tax
Everyone must pay for garbage tax in order to dispose of municipal solid waste. The tax rate is based on how much waste is present for collection by the municipality or local authority. The price varies depending on the area, but on average can cost €300 per year.
Homeowner Expenses
Annual Wealth Tax – Impuesto Sobre Patrimonio
The state progressive wealth tax rates start at 0.2% on assets up to €167,129 and rise to 2.5% on assets over €10,695,996. The regional rates vary.
This tax has been changed several times in recent years. Patrimonio was reintroduced during Spain’s financial crisis, but with a much higher tax-free allowance of €700,000 per person that also applies to non-residents.
It appeared as a ‘temporary’ measure, yet there is no clear indication of when it will be abolished, if at all.
Personal Income Tax – Impuesto Sobre la Renta de No-Residentes – IRNR
Non-residents who own property in Spain have to pay an annual income tax influenced by whether the property is rented out or not.
Not Rented Out
Non-resident property owners who do not rent out their property and have no other source of income in Spain pay income tax based on property value. The tax rate is fixed at 25% or 2% of the property’s valor catastral. If property value is € 700,000, taxable base (2%) = € 14,000, tax (25%) = € 3,500.
Rented Out
Non-residents are legally required to declare rental income and fulfill tax obligations. Tax regulations determine the taxable income and applicable rates, taking into account individual circumstances and any existing double taxation agreements between Spain and the taxpayer’s country of origin. Typically, non-residents are subject to a flat rate of 25% on the gross income generated from their Spanish property.
Residents in Spain are liable for income tax based on their yearly earnings. While tax rates differ across regions, recent years have seen favorable changes benefiting taxpayers, with the government planning further reductions in tax rates.
Conclusion
Before embarking on the journey of purchasing a property in Marbella, it’s essential to have everything meticulously organized and a comprehensive understanding of the Spanish purchasing process. This can feel overwhelming, given the wealth of information involved. Hence, having an experienced and reliable real estate agent by your side is paramount. Your agent should not only guide you through the process but also provide moral support.
Your realtor should be someone you resonate with and trust implicitly—a professional matchmaker who introduces you to your dream home. At Optimum Marbella, we emphasize strong relationships, trust, and experience. With an extensive clientele spanning the globe, we are well-versed in assisting individuals in finding their ideal residences in Marbella. Our boutique agency are esteemed experts in their field, serving as your tour guide, consultant, and problem solver throughout the 3-6 month process. Rest assured, when you finally settle into your newly acquired property, you’ll look back on the purchasing journey with gratitude for entrusting us with your investment. Get in contact with us today!