Top 5 Mistakes Foreigners Make When Purchasing in Spain

The Costa del Sol is one of Spain’s most desirable locations for luxury real estate, attracting foreign buyers interested in beachfront apartments, golf villas, and gated communities in Estepona, Marbella, Benahavís, and the New Golden Mile.

However, purchasing property in Andalusia involves legal, tax, and financial considerations that many international buyers overlook. Without expert guidance, these mistakes can lead to delays, unexpected costs, and legal complications.

With 24 years of experience, Livingstone Estates is the leading real estate agency on the New Golden Mile, specialising in high-end property transactions. Our team ensures that foreign buyers navigate the Spanish property market securely and efficiently.

To help you make an informed investment, here are the top five mistakes to avoid when buying property in Costa del Sol—and how to prevent them.

The Mistake
Many foreign buyers assume they can handle the legal process alone or rely on the seller’s agent for legal advice. Others mistakenly believe that Spanish real estate transactions do not require independent legal representation.

• Regional Variations: Andalusia has specific property laws and taxes that differ from other parts of Spain.

• Unregistered Properties: Some homes built before 2010 may lack proper building licences, leading to legal disputes.

• Rural Homes: Properties such as fincas, cortijos, and villas require special permits for renovations, particularly in Benahavís and Marbella.

• Hidden Liabilities: Buyers may unknowingly inherit unpaid property taxes, mortgages, or legal disputes if proper due diligence is not conducted.

• Hire an independent, bilingual real estate lawyer who specializes in Andalusian property law.
• Verify the property’s legal status in the Spanish Land Registry (Registro de la Propiedad) before making a purchase.
• Ensure the property complies with Andalusian urban planning laws under the Ley 7/2021,de 1 de diciembre, de impulso para la sostenibilidad del territorio de Andalucía (LISTA).
• Work with Livingstone Estates, which partners with trusted real estate lawyers to guarantee a legally secure transaction.

The Mistake
Many buyers only focus on the listed property price and fail to account for additional taxes and fees, which can increase the final cost by 10-15%.

Why This is a Risk in Costa del Sol

• Resale Properties: Subject to 7 percent Transfer Tax (ITP).

• New-Build Properties: Subject to 10 percent VAT (IVA) plus 1.2 percent Stamp Duty (AJD).

• Notary, Registry, and Legal Fees: Typically 1 to 2 percent of the purchase price.

• Potential Mortgage Fees, Bank Charges, and Valuation Costs.

How to Avoid It

• Work with Livingstone Estates for a detailed financial breakdown before making an offer.

• Budget an additional 10 to 15 percent of the purchase price for closing costs.

• Refer to the Andalusian Tax Authority (Agencia Tributaria de Andalucía) for up-to-date tax rates.

The Mistake
Many foreign buyers rush into a purchase without conducting a technical inspection or verifying the property’s legal status.

Why This is a Risk in Costa del Sol

• Older properties may have structural issues, outdated electrical systems, or damp problems.

• Unregistered renovations may lead to future legal disputes.

• Some properties are built on protected land, restricting modifications or future resale potential.

How to Avoid It

• Arrange an independent property inspection before signing the contract.

• Verify that all renovations are legally registered with the Catastro Register.

• Ensure full legal and structural vetting by purchasing through Livingstone Estates, which only lists legally compliant properties.

The Mistake
Many foreign buyers assume they can rent out their property freely without understanding the rental license requirements and tax obligations.

Why This is a Risk in Costa del Sol

• Short-term rentals require a Tourist Rental License (Vivienda con Fines Turísticos - VFT) from the Junta de Andalucía Tourism Authority.
• Some gated communities prohibit holiday rentals under community regulations.
• Rental Income Tax:
  EU/EEA Residents: 19% tax on net rental income (after deductions).
• Non-EU Residents: 24% tax on total rental income (no deductions allowed).

How to Avoid It

• Check if the property qualifies for a short-term rental license before purchasing.
• Register the property with the Andalusian Tourism Registry.

• Work with Livingstone Estates, which offers full rental management services and legal compliance.

The Mistake
Foreign buyers often underestimate currency fluctuations and mortgage processing times, leading to unexpected costs and delays.

Why This is a Risk in Costa del Sol

• Currency exchange rates fluctuate daily, affecting the final purchase cost.

• Spanish mortgage approvals can take up to two months, especially for non-residents.

How to Avoid It

• Use a currency exchange service to lock in the best exchange rate and avoid last-minute losses.
• Obtain mortgage pre-approval before making an offer to streamline the buying process.
• Work with Livingstone Estates, which provides financial guidance for international transactions and mortgage applications.

Buying property in Costa del Sol is a rewarding investment, but avoiding these common mistakes ensures a smooth and secure purchasing experience.

With 24 years of expertise, Livingstone Estates specialises in luxury properties in Estepona, Marbella, Benahavís, and the New Golden Mile, providing personalised guidance to foreign buyers.

For expert real estate assistance, contact Livingstone Estates::
📍 Office Address: Urb. Guadalmansa Edif. Salinas Local 7, Estepona
📧 Email: info@livingstone-estates.com
🌍 Website: www.livingstone-estates.com

This guide ensures you make informed decisions and invest wisely in Spain’s luxury real estate market. Start your property search with confidence today.

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