What you need and what is worth knowing when planning to buy a property on the Costa del Sol in 2023

Get to know the Costa del Sol (location, the most popular cities, advantages)

Costa del Sol is the name of part of the southern coast of Spain. It is located in Andalusia and is about 300 kilometers long. It stretches from Gibraltar to the Costa Tropical in the province of Granada. Most of the coast belongs to the province of Málaga, where the most important airport in the region and one of the largest airports in Spain is located. The second Costa del Sol airport is in Gibraltar. 

Málaga, called the capital of the Costa del Sol, is the largest city in the region. Other famous cities and tourist resorts on the coast are: Marbella, Estepona, Mijas, Benalmádena, Torremolinos, Fuengirola, Manilva, Casares and Nerja. A very popular city – although not on the coast, but higher, in the mountains – is Benahavis, known as "Rincon Gastronomico" (meaning "gastronomic corner") and the capital of the richest municipality in Spain.  

Good to know that...

Costa del Sol is all about nature. Beach, sea, mountains, forests, landscape parks, fantastic views and a climate that you can't find elsewhere in Europe.

Before you start looking for a property, learn about the 4 characteristic points of the Spanish real estate market

1. The prices in the offers are net prices. Appropriate taxes must be added to them. Generally, it is assumed that approx. 10% should be added to the price on the secondary market and approx. 15% on the primary market. 
2. You will pay for a property bought on the secondary market by a banker's check, not a bank transfer. On the primary market, the form of payment is determined by the developer, it is usually a bank transfer.
3. When buying a property on the primary market, you will have to go through the process of checking the origin of funds. Spain has a very restrictive agreement to prevent the marketing of so-called "dirty money", so the developer will ask you for tax returns and bank references. 
4. The Spanish developer will hand you over a property with a finished kitchen, bathrooms, floors and built-in wardrobes. If you buy a property off plan or at an early stage of construction, most developers will offer you the option of choosing finishing materials from a specific range of products. 

Buying a property on the Costa del Sol if we want to make money on rent – what you need to know in 2023

According to our observations it is best to look for property for short-term rental close to the sea and the so-called "civilization", i.e. shops and restaurants. Since holiday guests, especially if they come with children, are reluctant to travel by car and prefer to walk, we should assume that everything important to them is to be within walking distance of the property. Then the chances of a good rental property significantly increase.

If you are looking for a property on the Costa del Sol for further rental, pay attention to the following locations:

• Marbella – known for its beaches, elegant hotels, restaurants and beach clubs is a mecca for fans of fun, tasty food and instagram photos. read more about Marbella here
• Estepona – the rising star of the coast. Thanks to the extremely dynamic mayor, the city looks beautiful and becomes more and more tourist-friendly. Families with children and people looking for peace on vacation are happy to stay here. here you can read more about Estepona
• Benalmádena – beautiful beaches and plenty of attractions for children in the area encourage family holidays. For those thirsty for "real" Andalusia, a hint: go for a walk to Benalmádena Pueblo. The old town will delight you. read more about Benalamaden here
• Torremolinos – a hub of all inclusive hotels, nice beach, 5 minutes’ drive from the airport. A place willingly chosen by customers under the sign of the rainbow. Tolerant and friendly. 
• Mijas – nice beaches, good and reasonably priced restaurants,a bit of history and beautiful views from Mijas Pueblo. 

Short-term rental is a good idea for passive income or/and covering the running costs of the property. When planning to buy a property for rent on the Costa del Sol, be sure to remember about:

• LPO Licencia de primera ocupación / first occupation licence. When buying a property, pay attention to whether the selected apartment or house has the so-called LPO, i.e. permission to use. Without this document, you will not be able to apply for a tourist license, and without it, legal short-term rental is impossible.
• Tourist License. You apply for this permit after buying the property and registering it in the local land and mortgage registers. This can be done on your behalf by your lawyer or a person who has received the appropriate notarial authorization. 
• ROI. Do not believe the fairy tales spread by some real estate agencies promising a return on investment of 15 – 20% per year. In our experience, returns of 3-6% per year are rather realistic. 
• The costs of maintaining the property in the case of short-term rental are covered by the owner. 

What should be remembered when planning to buy a property on the Costa del Sol in 2023, if we want to live permanently

All locations mentioned above in the context of short-term rental are suitable for permanent living. However, when looking for a permanent apartment, we assume that you will not move without a car, and this significantly extends the scope of the search. You don't have to stick so much to the assumption that everything important to you should be within walking distance of your property. 

Our observations show that..

Often, when looking for a permanent apartment, customers first look around the sea, and then conclude that it would be more comfortable and calmer for them to live a little further from the beach and the tourist hustle and bustle, which can be a nuisance in the summer.

To the locations listed above, I would also add the municipality of Benahavis, where a lot of interesting properties have been built in recent years, ideal for permanent residence on the Costa del Sol.

A few tips

Moving to Spain (we write more about it here) is a wide topic, especially if you have children of school age. In this case, clients often base the decision to buy a property and/or its location on the location of the school where they enrolled their child.

Let us remember that it is different to come to the Costa del Sol for holidays and live here permanently. If you come from a big city and are connoisseurs of city life and its attractions, living on the coast, especially in winter, can be quite... boring. We have cultural events, theatres and cinemas here, but without knowing Spanish it will be difficult to use them. However, if you love nature, walks, fantastic views and / or play golf, you will not be bored here for a minute.

What are the average prices per m2 of the property on the Costa del Sol in 2023

These are the average prices per square meter in May 2023 in selected locations of the Costa del Sol according to the Idealista portal:

• Andalusia: EUR 2,008 / m2
• Málaga Province: EUR 2,918 / m2
• Benahavis: EUR 4,024/m2
• Benamadena: EUR 2,723 / m2
• Casares: EUR 2,270 / m2
• Estepona: EUR 3,058 / m2
• Marbella: €4,194/m2
• Mijas: EUR 2,580 / m2
• Torremolinos: €2,651/m2

Remember!

Costa del Sol is one of the most interesting regions of Spain in terms of investment. The prices here are relatively high, so if you are looking for unique bargains, you need to be patient and prepare that such a bargain... may not happen.

Taxes and fees related to buying a property on the Costa del Sol in 2023

• ITP / Transfer Tax, which in Andalusia is 7% from April 2021
• Notary costs 
• The cost of entry in the real estate register / land and mortgage register equivalent
• Lawyer's fee
• Possibly mortgage costs.

When buying a property on the primary market, the following should be added to the transaction price:

• VAT 10%
• AJD tax 1.2%
• Notary costs 
• The cost of entry in the real estate register / land and mortgage register equivalent
• Lawyer's fee
• Possibly mortgage costs.

What is the process of buying a property on the Costa del Sol in 2023 – the most important stages

1. Contact us (or another broker) and receive first offers.
2. Choose a property to view, plan your visit.
3. Arrive, view the properties, choose the right one (some clients manage to do this on the first visit, others need two or three visits to the coast to make a decision).
4. Make an offer. 
5. After accepting the offer, the documents are checked twice. First we do it, then the buyer's lawyer.
6. Meet with your lawyer and visit a notary to sign a power of attorney for the lawyer to apply for a NIE number and carry out the transaction. 
7. Sign the reservation contract and pay the amount agreed with the seller.
8. After a week or two, sign a private purchase contract and pay a deposit of 10%.

Important!

If the buyer doesn't need mortgage, the deal can be closed in a matter of days. As a standard, 30 days is assumed as a safe time for both parties to carry out the transaction.
If mortgage is needed, this period is extended to 3 months for security. If the client decides to buy the property from the developer, the duration of the transaction will depend on the stage of progress of the works. When buying a property from the plan, you can assume that you will be able to move in after about 2 years. 

3 things to pay special attention to when buying a property on the Costa del Sol in 2023

1. Check the experience of the office / broker you want to buy the property with.

A very important tip: before you choose a broker, check their experience and credibility. Look for real estate agents and offices that have been on the Costa del Sol market for years. Usually, you will also find recommendations from past customers on their websites and you can request a review of such a recommendation. 

2. Calculate your budget carefully.

Calculate what budget you have and whether you are able to carry out the transaction with your own funds. If not, consider how much funding you want to apply for. Here it is worth checking your creditworthiness in a Spanish bank before you sign the booking contract to avoid disappointment. 

3. Remember the time. 

It is important for you to remember that the whole world invests in the Costa del Sol, which means that things sometimes happen quickly here. It happened to us that a client selected 10 properties to view and made an appointment with us here in two weeks. When organizing property visits, we always make sure that the property is still available before the client arrives. And it happened that half of the 10 offers were left, because the rest were simply sold within two weeks.