Buying a luxury property on the Costa Brava is not only about finding a beautiful house facing the Mediterranean: it is important to know how to distinguish real value, uniqueness, privacy and heritage projection. For the international buyer, distance, lack of knowledge of the territory and incomplete reading of the market can cause costly mistakes before, during and after the purchase.
At The On Estate we identify the 10 most common mistakes when buying a luxury property on the Costa Brava and the keys to buy with criteria, security and strategic vision.
1. NOT TAKING INTO ACCOUNT THE TOTAL COSTS OF THE OPERATION:
Many look only at the price of the house, but in the Autonomous Community of Catalonia you must take into account :
Up to 1.000.000 € → 10%
Between 1.000.000 € and 2.000.000 € → 11%
Between 2.000.000 € and 3.000.000 € → 12%
More than 3.000.000 € → 13% (second hand property)
Notary, registry, agency
Possible legal fees
In total, the real cost is usually +11% to +13% of the price.
2. NOT HAVING A LOCAL PERSON AND/OR PROFESSIONAL OF FULL CONFIDENCE TO HELP YOU WITH THE OPERATION:
FACTORS TO CONSIDER:
If the property has CHARGES.
If there are unpaid debts or DEBTS.
CATASTRAL and REGISTRAL information.
URBANISTIC situation, AFFECTIONS and PROTECTIONS.
In the case of PATRIMONIO, if it is eligible for an OFFICIAL SUBSIDY and in what %.
Legal situation of the property: HOUSES WITH UNREGISTERED EXTENSIONS / DISPUTES WITH NEIGHBORS / DEBTS TO THE TOWN HALL IBI / ILLEGAL TOURIST USE…
Existence of HIDDEN VICES AND HIDDEN AFFECTIONS…
3. IGNORANCE OF TAX OBLIGATIONS IN SPAIN
Even if you rent, you must pay IRNR (imputed income)
If you rent → you are taxed on income in Spain
You must declare in your country of origin (double taxation).
4. TO HAVE CHOSEN PROPERTY, WITHOUT HAVING APPLIED FOR THE NIE.
Without NIE:
You cannot execute the transaction.
You cannot pay taxes correctly.
Forgetting to process the NIE, DOCUMENTO DE IDENTIDAD DE EXTRANJERO, means delaying the transaction or even losing it.
5. UNDERESTIMATING FUNDING.
SPANISH BANKS WORK WITH OTHER % WHEN DEALING WITH FOREIGNERS, A RESIDENT IS NOT THE SAME AS A RESIDENT ABROAD .
YOU MUST FORESEEP:
30-40% input and more demanding conditions.
6. FORGET THE TOWN PLANNING OF THE TOWN WHERE YOU BUY: POUM (PLAN DE ORDENAMIENTO URBANÍSTICO MUNICIPAL).
Especially in rural or coastal areas:
/ Restrictions on alterations / Heights / Non-building elements / Setbacks / Expansion % / Style charter / Limitations on tourist rental ….
These aspects can seriously affect the future use of the property and your life project.
7. UNDERESTIMATE LOCATION (beyond aesthetics).
The most common mistake is to fall in love with a property, without taking it into account:
- The access or accesses in high season.
- Noise and opening hours of restaurants and bars.
- Services not available during the off-season…
8. FAILURE TO PROVIDE FOR MONITORING AND MAINTENANCE WHILE THE HOUSE IS CLOSED IN WINTER.
PROBLEMS TO BE TAKEN INTO ACCOUNT:
SECURITY / KEY CUSTODY / CONTROL AND MAINTENANCE / GARDENING / SWIMMING POOL HIBERNATION / LEAKS / ELECTRICAL VOLTAGE PEAKS / TOURIST RENTAL MANAGEMENT / SURVEILLANCE AND SECURITY, ALARMS / PAYMENT OF MUNICIPAL TAXES AND TAXATION…
During these periods when the owners are away, it pays to have a trusted contact or an experienced property manager and administrator to take care of the property while it remains in vacation rental or closed.
9. NOT PLANNING THE INHERITANCE.
The property will be subject to inheritance tax in Catalonia, if not planned, it can be high.
CONCLUSIONS:
Buying in Catalonia is an excellent investment and lifestyle, but it must be done with structure, advice and long term vision and with the help of a local agent, in TheOn Estate, we have been serving the owner, the seller and the families who visit us temporarily during their vacations for 50 years.
We accompany you to build your life project.
