The Costa del Sol is Europe’s most popular second home destination, not to mention a celebrity playground. After the financial crisis of 2008, the Spanish property market slumped. But times are changing. Prices are up. Confidence is high. We take a closer look at why now is a great time to invest on the Costa del Sol.
Why buy in Spain?
The Spanish tourist market remains strong. Spain is the third most popular tourist destination in the world, behind France and the USA. In 2016 around 75 million tourists visited the country, a rise of 10% on 2015. Just over 22% of Spain’s tourists come from the UK, so if you are looking to invest in a Spanish holiday home, the rental potential is massive.
Why buy on the Costa del Sol?
The Costa del Sol has something for everyone, from the glitz and glamour of Marbella to family friendly Benalmadena. The stunning coastline offers a huge selection of beautiful sandy beaches, world class leisure facilities, award-winning marinas, not to mention a variety of outstanding golf courses.
The region is served by Malaga International Airport, giving easy access to tourists from all over the globe. There is also to option to fly into Gibraltar, or Granada, depending on your final destination. The region has a year round mild climate, making it perfect as a winter sun destination, as well as the traditional summer holiday period.
What is the current state of the Costa del Sol property market?
The dip in Spanish property prices has steadily slowed in recent years and on the Costa del Sol prices in some areas are on the rise. This means that while the market is confident, there are still bargains to be snapped up, making 2017 a great time to buy.
In fact, confidence is so high that property developers are locked in a permanent bidding war for land to buy and develop. This is especially true around the Marbella region. Marbella construction is struggling to keep up with demand for new homes, particularly in the luxury market. So, if you’re looking to invest in a holiday and/or rental home in the area, now is the time to strike.
Where to buy on the Costa del Sol?
If you don’t have a set idea of where you want to buy, here’s a quick summary of the area’s major resorts.
- Torre del Mar & Nerja
East of Malaga, large family friendly resorts retaining a Spanish feel
West of Malaga, traditional package tour resort, lively nightlife, good facilities
Family friendly resort, award winning marina, pretty old white village
Wide sandy beach, marina, good nightlife, busy promenade
Inland, pretty white-washed village, retains a Spanish feel
- Mijas Costa
Coastal stretch from Calahonda to La Cala, popular family spot, good for golfers
Glamorous, sandy beaches, plentiful golf courses, upmarket, fashionable
- Puerto Banus
Exclusive, palatial villas, glittering marina, high end restaurants and bars
Sweeping beach, lovely promenade, family friendly, traditional old town, fishing harbour
World class leisure resort, desirable, expensive but understated, championship golf courses, polo club, world class marina
Tips for buying a holiday home on the Costa del Sol
The whole process of buying a property in Spain is strictly regulated, so you are highly recommended to take professional advice. If you don’t speak Spanish, owing to the large number of foreign home buyers, there are plenty of English speaking estate agents and lawyers to help you.
As a rough rule of thumb, the cost of buying and selling property in Spain is around 15% of its total value. When buying a new build property, you will need to pay both VAT and Stamp Duty. Buying from a private individual incurs a Transfer tax. Keep both hard and digital copies of all invoices related to your purchase.
All non-resident property owners have to pay two property taxes – the Impuesto Sobre Bienes Inmuebles (IBI), which is a council tax. If you don’t rent out your property the second tax is called imputed income tax. If you do rent out the property you must declare any income and pay tax on the amount earned.
A popular tourist destination, competitive prices for quality properties, year round sunshine, the Costa del Sol is a great destination to invest in a holiday home. Viva Espana!