Purchase process guide in Marbella and Spain

We have prepared a guide for those interested in purchasing a property in Marbella as we want to ensure that the purchasing process runs as smoothly as possible. For some people, purchasing a property is as straightforward as stating: “I’m going to buy a house”. However, in our experience, the procedure is more complicated than just finding and purchasing a property you want, so we've created a straightforward guide to simplify your experience.

TABLE OF CONTENTS

01: Do you research when planning to buy a property in Marbella

02: Travel to Marbella and organise your property viewings

03: Always plan ahead when purchasing a property in Marbella

04: Negotiation with the property owner in Marbella

05: Signing contracts when purchasing a property in Marbella

06: What to keep in mind after purchasing a property in Marbella

07: Helpful tools to aid you in the purchase process

08: Conclusion

01. DO YOUR RESEARCH WHEN PLANNING TO BUY A PROPERTY IN MARBELLA

When you're thinking about buying a property, doing your homework and planning carefully is super important to get things off to a good start. This is especially true if you're looking to buy a property in Marbella, where finding the right real estate agent is your first big task.
The internet is your best friend here. It's an amazing tool that lets you research pretty much anything worldwide, making life easier for folks living abroad who want to buy property in Marbella. It helps you know what's available in the market before you even start.
In Marbella, the real estate market is pretty open. Most real estate companies can access, promote, and sell properties that are up for sale. This happens because they share the same database with Marbella. There are plenty of real estate companies and brokers to choose from, which is great because it gives you options when you're looking for the right agent.
When you're on the hunt for a real estate company or agent, it's smart to do your research and talk to a few of them with an open mind. You don't have to commit to anyone right away. You can start by working with multiple agents to see who clicks with you the most.
Starting by researching and picking a company or agent that suits your needs is a good idea. But, eventually, you'll want to narrow it down to just one. Trust is key here, and you have to believe that they'll do their best for you and your property journey. That's why we're proud to be a real estate company at Amea. All our agents are experts, and they're here to earn your trust and make your property dreams come true.

Is Marbella a good place to live?

Marbella is often hailed as one of Europe's top places to call home, despite its popularity as a tourist hotspot. It boasts a high quality of life, thanks to its year-round pleasant weather and welcoming atmosphere for both individuals and families. Marbella and its surroundings offer breathtaking views and a wide range of activities to enjoy, with friendly locals making it an ideal place to settle down.

Is buying property in Marbella expensive?

Marbella is renowned for its luxurious holiday destinations, drawing the rich and famous. Consequently, it's no surprise that it houses some of Andalusia's priciest properties. From beach resorts to golf courses and exclusive townhouses, Marbella has it all. Celebrities like George Clooney, Antonio Banderas, and Eva Longoria have invested here. However, there are various neighborhoods in Marbella, each with different price ranges. So, if you're considering a move, don't be discouraged. La Zagaleta, The Golden Mile, Sierra Blanca, and Los Monteros are at the top end, while Nueva Andalucía, San Pedro de Alcántara, and Guadalmina offer more affordable residential options.

Why should you work with a real estate agent?

In an age where the internet provides 24/7 access to information, some may assume they can easily research and purchase a home without a real estate agent. However, this is a misconception that shouldn't be overlooked.
Real estate agents serve a crucial purpose:
  • They streamline your home search by doing the legwork and prioritizing options to match your needs.
  • Agents have a keen eye for detail, pointing out potential issues or oversights you might miss.
  • They help you identify investment opportunities in properties.
  • Acting as area experts, agents provide valuable insights about the neighborhood.
  • Agents tap into their network to save you time on researching service providers and contractors.
  • Most importantly, they are skilled negotiators, safeguarding your interests and securing the best possible deal during negotiations.
In short, real estate agents bring invaluable expertise and efficiency to the home-buying process that can't be easily replicated through online research alone.

02: TRAVEL TO MARBELLA AND ORGANISE YOUR PROPERTY VIEWINGS

Now that you've made preparations, it's time to set your sights on Marbella and organize your property viewings. Here's some advice to help you plan your property tours effectively:
Tip 1: 
Start by staying organized. Make a list of the properties that pique your interest before your trip.
Tip 2: By now, you should have chosen the real estate company and agent to work with. Allow your agent to arrange multiple viewings throughout the day. This approach not only helps you become familiar with the market but also maximizes your time efficiency.
Tip 3: It's advisable to limit yourself to seeing around five properties in one day. Going beyond that number can be overwhelming and might cloud your judgment. However, if your visit is short, you might consider looking at up to ten properties on your scheduled tour day.
Tip 4: Research the neighborhoods where the properties are located. It's not just about the house; the surroundings matter too. Consider factors like noise levels, gated communities, proximity to the beach, or nearby schools. Get a feel for the location by taking a drive through the area.
Tip 5: If you find a property you like during a daytime viewing, we recommend returning in the evening. Houses can have a different ambiance at night, which might alter your impression.
Tip 6: Don't hesitate to share your thoughts about the homes you're viewing. If you like something, say so. If not, express your concerns. This will help you make informed decisions and enable your agent to adjust their recommendations accordingly. Communicate openly with your agent and convey your confidence in their ability to adapt to your preferences. This will enhance their understanding of your needs and their capacity to accommodate your preferences.
Tip 7: Be prepared for viewing schedules to be flexible. Despite your best preparations, you might change your mind about your requirements once you see a property in person. Sometimes, the actual property may differ from what you saw online. This underscores the importance of carefully selecting your real estate agent; a skilled agent will adapt to your evolving needs and promptly arrange viewings to ensure the best outcomes for you.

03: ALWAYS PLAN AHEAD WHEN PURCHASING A PROPERTY IN MARBELLA

Before you proceed, it's crucial to emphasize that having all your documentation in order is essential when considering a property purchase in Marbella. Adequate planning in this regard can save you both time and financial stress. Here's what you need to know to prepare:

1. Documentation Readiness:

   - Prior to your trip to Marbella or during your visit, ensure that all your paperwork is in order. Thoroughly research businesses and brokers online.

2. N.I.E Number Application:

   - You must apply for a Número de Identidad Extranjero (N.I.E.) number, which is a sequential identification number required for various purposes in Spain. You can apply for an N.I.E. at a Spanish consulate if you are overseas. If you are already in Spain, you can do this in person at a Police Station or through a legal administrator (gestor).
   - The necessary documents for obtaining an N.I.E. in Andalucía typically include:
   - A photocopy of the main page of your European Passport or your entire passport (for non-European passports).
   - Two copies of your ID.
   - Two completed and signed copies of the Ex-15 application form.
    - A valid reason for requiring an N.I.E., such as employment, vehicle purchase, or home purchase.

3. Opening a Spanish Bank Account:

   - After obtaining your N.I.E., you can apply to open a bank account in Spain. Look for foreign-friendly banks like Sabadell, CaixaBank, Santander, and Bankinter.
   - It's important to note that opening a bank account usually requires an in-person visit and may necessitate the following:
    - Proof of identity (e.g., passport or ID card).
    - Your N.I.E.
    - Proof of funds or tax declarations.
    - Any additional documents requested by the bank.
    - Some banks, like BBVA, may also require a Certificado de No Residente, which you can obtain at a Spanish police station, with a processing time of around ten days.
   - If your documents are from outside Spain, they may need proper translation into Spanish and an Apostille stamp.
   - While most banks do not charge an account opening fee, they typically have annual administration fees (quarterly or monthly).
   - Pay attention to the fees for receiving international transfers, making foreign transfers, and issuing banker's drafts, especially when purchasing property.

4. Legal and Financial Advisors:

   - We strongly recommend finding competent and reliable tax experts and lawyers when buying property in Spain. Establishing a good relationship with these professionals before starting the buying process can be highly beneficial, especially during negotiations.
   - If you are not proficient in Spanish, it's advisable to work with a lawyer who is fluent in the language. Given Marbella's multicultural population, finding a multilingual lawyer is generally straightforward.

Questions and Answers

Q: Can foreigners open a bank account in Spain?

A: Yes, foreign nationals can open a bank account in Spain once they obtain an N.I.E. number. However, there are specific requirements to fulfill, including providing proof of identity, proof of funds, tax declarations, and any other documents requested by the bank. Many banks in Spain, such as Sabadell, CaixaBank, Santander, and Bankinter, are foreign-friendly. Some banks, like BBVA, may require a Certificado de No Residente.

Q: Should I purchase a property before selling my current home?

A: Whether to buy a property before selling your current one depends on your financial situation and personal preferences. Buying first ensures you have a place to move into, avoiding the need for temporary housing. However, it may involve handling two mortgage payments if your current property doesn't sell quickly. Selling first avoids this financial burden and gives you more time to find the right property, but you may need temporary accommodation while searching. Ultimately, the decision should align with your specific circumstances and goals.

04: NEGOTIATION PROPERTY OWNERS IN MARBELLA

Once you've found a property that aligns with your vision of the perfect residence and you're dealing with a private owner, you enter the negotiation stage. This phase is pivotal, and we offer the following advice:

Making an Offer:

- We strongly recommend submitting a purchase offer in writing, typically in the form of an offer letter, through your agent. The offer letter should specify the offered price, proposed payment methods, and deadlines.
- Before making an offer, ensure you have a clear understanding of what is included in the sale of the property, such as furnishings and fixtures. A reasonable and sincere offer tends to yield the best potential deal.
- While some buyers choose to negotiate with the seller in person after making an offer, these discussions are becoming less formal and more personal. In contrast, negotiations conducted through an agent or in writing tend to be more structured and gradual. Based on our observations, agent-assisted negotiations often result in better purchase prices because agents are well-versed in the bargaining process.
- Any specific criteria or conditions you'd like the seller to consider must be clearly outlined in the initial offer.
Requesting a Technical Due Diligence:
- You have the option to request a technical due diligence on the property before, during, or even after making an offer. Technical due diligence provides insights into the potential risks associated with property ownership during the acquisition process.
- This includes examinations of minute details like aesthetic issues (such as small cracks in plaster, signs of moisture, insulation, and ventilation), as well as assessments of plumbing, pipes, boilers, gas, water tanks, and electrical systems that may require attention.
- It's crucial to document all this information in writing, as it can influence your initial offer.

Questions and Answers

Q: What is the best way to make an offer on a house?

A: The best way to make an offer is to ensure it is reasonable and sincere, and it should be submitted in writing. Offers that appear more serious on paper tend to yield better results and facilitate the acquisition process. While in some cases, buyers and sellers meet in person to negotiate final terms, conducting negotiations through your agent is often advisable. Agents can guide you through the process and help you secure the best possible deal.

Q: How many properties should I view before making an offer?

A: The number of properties you should view before making an offer can vary based on several factors. There is no set number of properties you must view. It depends on the market niche you are exploring, the availability of properties in that niche, your experience in the market, and your willingness to explore different regions. The goal of viewing multiple homes is to gain an understanding of the market and property values in a specific area. Having an open mind during the viewing process is essential to make an informed decision.

05. Signing contracts when purchasing a property in Marbella

Once the seller accepts your offer, the legal aspect of the property purchase process begins. When buying real estate in Marbella, you will typically be required to sign various contracts and documents. Here's what you need to know:

1. Reservation Contract - Documento de Reserva:

- This contract, signed by both the seller and the buyer, grants the right to reserve the property for a specified period, often seven to fourteen days.
- A reservation fee is typically paid by the buyer, ranging from €5,000 to €20,000 or 1% of the purchase price, or as agreed upon.
- If the buyer decides not to proceed with the purchase, the reservation fee is forfeited to compensate the seller for taking the property off the market.

2. Private Contract with a 10% Payment:

- Following the reservation contract, you sign a private contract and pay 10% of the purchase price, which includes the reservation fee (if you paid 1% at reservation).
- There are three types of contracts associated with the 10% payment:
   a. Penitential Deposit Contract - Contrato de Arras Penitenciales: Penalties are imposed on the seller if they fail to sell the property on the agreed terms. If the buyer backs out, they forfeit the 10% deposit, and the contract becomes void.
   b. Private Purchase Contract - Contrato privado de Compraventa: Rarely used, as it obligates both parties to buy and sell, making it more complex to terminate.
   c. Purchase Option Contract - Contrato de Opción de Compra: The seller cannot back out, and there is no predetermined penalty. The buyer decides whether to execute the option to purchase, forfeiting the 10% deposit if they decline.

3. Mortgage (if applicable):

- If you plan to apply for a mortgage in Spain, start the process early, as it can take up to two months for approval.
- Banks typically require proof of consistent income.
- Mortgage terms usually include up to 50% of the purchase price, an annual interest rate of 2.5% to 4%, and a duration of 15-25 years.
- An early repayment cost of approximately 0.25% to 0.5% may apply when closing a mortgage.
- Some banks may require property and life insurance before granting a mortgage.

4. Completion of Property Purchase - Escritura de Compraventa:

- All parties involved, including buyers, sellers, legal representatives, and bank staff, must be present during the completion process.
- Upon signing the title deed at the notary's office, you become the owner of the property and assume full responsibility for it.
- Bank checks are used for payment at the same time, ensuring a secure transaction.
- The notarial sale deed is then registered at the Land Registry, which may take up to three months.
- After registration, you can access the original deeds and related invoices, allowing you to update your bank information and change the name on utility bills.

Questions and Answers

Q: What happens after you purchase a property?

A: Once you sign the title deed at the notary's office and pay the necessary taxes, you immediately gain possession and full responsibility for the property. After registering the notarial sale deed at the Land Registry, which may take up to three months, you can access the original deeds and related invoices. This enables you to update your bank information and change the name on utility bills.

Q: What is a reservation contract in Spain?

A: A reservation contract is an agreement between the seller and the buyer that allows the property to be reserved for a specified period. If the buyer decides not to proceed with the purchase, they forfeit the reservation fee, but if they proceed, the fee is deducted from the total cost.

Q: What happens if the seller pulls out of the deal after the reservation fee is paid?

A: In standard reservation contracts, if the seller decides not to sell the property, they are obligated to return double the amount initially paid for the reservation. Therefore, it's advisable to proceed with the private contract promptly after paying the reservation fee.

Q: When does the seller need to move out of the property?

A: In theory, the buyer can move in as soon as all contracts are signed at the notary's office and they receive the property's keys, unless the purchase contract specifies otherwise. If the seller requires additional time to vacate the property, both parties discuss and agree upon a timetable for the seller's post-sale stay.

Q: What are the mortgage fees in Spain?

A: Mortgage fees in Spain typically range from to 2.5% to 4% annually, depending on factors such as your residency status and the chosen bank. Variable mortgages may seem attractive due to lower initial costs, but they are subject to market fluctuations, potentially increasing over time. Fixed-rate mortgages provide stability but may have higher initial costs.

06: What to keep in mind after purchasing a property in Marbella

Following the acquisition of the property, make sure all taxes are paid and that your ownership has been registered. Your lawyer and solicitor can assist you with this stage.
People need to know that there are other expenditures involved after purchasing a house, and that the initial outlay for the purchase is not the only amount that must be paid. An educational piece on purchase taxes and other costs associated with buying a house in Marbella can be found on our website. We also recommend reading our basic tax advice section and other sections.

Registering your property

As mentioned in the previous step, you must ensure that the name and bank details on all previous utility and community bills are changed to your information. Sometimes a lawyer can help you do this if agreed.
Once all taxes are paid, the property must now be registered at the local property registry to guarantee your ownership rights over the property. Below is a list of what documentation is required, keeping in mind that your lawyer can do this step:
• N.I.E and authorised copy of your Passport
• ITP Tax Payment confirmation
A copy of the seller’s IBI Tax Payment

Owning A Property

Now that you are a property owner, here is some helpful information on expenses that you will have to cover being a homeowner in Spain:

Expenses related to property

Maintenance Fees

The size and kind of the property affects the cost of maintenance (cleaning, repairing, reforming, utility bills, waste collection, etc.). Compared to a tiny apartment, maintaining a huge villa with a garden and pool will cost a lot more money and effort.

Community Fees

Laws require owners of real estate included in developments, buildings, or complexes with common areas to belong to the Community of Owners (Comunidad de Propietarios) and pay dues for upkeep of the common areas and other expenses.
services that are put to a vote at the yearly general meeting by the community. The sums can range from few hundred to several thousand euros.

Property Ownership Tax (Impuesto Sobre Bienes Inmuebles – IBI) 

Whether or not the owner is a resident determines the ownership's local tax. Depending on the region, the tax rate ranges from 0.4% to 1.1% of the town hall-set valour catastral (administrative value typically less than market value) (annually € 200-1500).

Garbage Tax

To dispose of municipal solid trash, there is a garbage levy that all individuals must pay. The amount of rubbish that needs to be collected by the municipality or local authority determines the tax rate. The cost varies based on the location, however it might average €300 year.

EXPENSES RELATED TO YOU AS A HOMEOWNER

Annual Wealth Tax - Impuesto Sobre Patrimonio

Starting at 0.2% on assets up to €167,129, the state progressive wealth tax rates increase to 2.5% on assets beyond €10,695,996. Regional prices differ.
This tax has undergone multiple modifications in the past few years. During Spain's financial crisis, patrimonio was reinstated, but with a significantly larger tax-free amount of €700,000 per person—which also applies to non-residents—in place.
Although it was intended to be a "temporary" remedy, it is unclear when or if it will be removed altogether.
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 obliged by law to declare rent income and pay taxes. The regulations will determine the taxable base and the tax rate as they apply to each person’s circumstances (considering the double taxation treaty between Spain and the country of origin). Often non-residents simply pay a flat rate of 25% of the gross income they earn from their property in Spain.
Residents in Spain pay income tax based on their annual income. The rates vary in different regions, but recent years have brought the taxpayers positive news, and the government has planned a further reduction of tax rates.

For you to know: The Golden Visa

If you are not a resident of the European Union, it is likely harder for you to move freely around the Schengen area without a tourist or short stay-visa. As a result, many non-European citizens find it hard to settle in Spain. However, a method has come to light within the real estate realm that facilitates the process of becoming a non-European resident in Spain, and that is via the Golden Visa; also known as a resident by investment in the real estate sector.
Regarding the real estate side of this, the requirement is to make an investment of at least €500,000 in a real estate property located in Spanish territory. The following prerequisite also applies:
The applicant must be a non-resident of the European Union and have no criminal record
The value of the property can be more than €500,000 and be encumbered by mortgages. But the €500,000 investment must be free of any legal liabilities.
The applicant must demonstrate sufficient financial resources to reside in Spain.
This particular visa allows an individual and their offspring to work and live in Spain, and also grants residence in Spain for 2 years. The residency can be renewed after 2 years as long as the applicant still owns the property purchased. This visa also allows for free movement within the Schengen area without any other visa. What's more, physical residency is not required, so it is not necessary to pay taxes in Spain. This process can be applied through a representative agent.
So, if you are a non-European client and the property you have purchased is valued at over €500,000 in Marbella, you are entitled to apply for a Golden Visa.

07: Conclusion

Before embarking on the journey of purchasing a property in Marbella, it's essential to have a well-thought-out plan and a deep understanding of the intricacies of the Spanish property buying process. This process can seem overwhelming due to the wealth of information involved. Therefore, it's crucial to have a knowledgeable and trustworthy real estate agent by your side, providing guidance and support every step of the way. Your agent should be your personal matchmaker, introducing you to your dream home, and that's precisely what Amea Realtors stands for.
At Amea, our foundation is built on experience, knowledge, and trust. With a diverse clientele from around the world, we have extensive experience helping individuals find their perfect homes in Marbella. Our real estate agents are experts in their field, and we have full confidence in our capabilities. For three to six months, our realtors serve as your guides, advisors, and problem solvers, ensuring a smooth and successful property purchase.
As you sit in your newly acquired property, we are confident that you will look back on your purchasing journey and appreciate the trust you placed in us. Amea Realtors is here to make your dream of owning a property in Marbella a reality.