Investing in property in Marbella offers a blend of Mediterranean charm and potential returns. The town has transformed from a quaint fishing village into a cosmopolitan hub, attracting affluent buyers from around the globe.
With its sunny climate, luxury amenities, and strategic location, Marbella presents a compelling opportunity for property investment. However, to ensure a smooth transaction and protect your investment, it’s essential to be well-informed about the associated taxes and costs.
Purchase Taxes: New Builds vs. Resale Properties
New Builds:
- VAT (IVA): 10% of the purchase price.
- Stamp Duty (AJD): 1.5% in Andalusia.
Resale Properties:
- Transfer Tax (ITP): 7% of the purchase price.
Additional Purchase Costs
Beyond taxes, consider the following:
- Legal Fees: Approximately 1% of the purchase price, plus VAT.
- Notary Fees: Typically 0.5% to 1% of the purchase price.
- Bank Fees: Around €2,000 for cheque or bank transfer costs.
- Mortgage Costs: If applicable, valuation fees range from €300 to €500.
Annual Property Taxes
Owning property in Marbella entails ongoing obligations:
- IBI (Local Property Tax): 0.78% of the property’s rateable value.
- Non-Resident Income Tax (IRNR): Applicable if the property isn’t rented.
- Rental Income Tax: 19% for EU/EEA residents; 24% for non-EU residents.
Proposed Tax Reforms
The Spanish government has proposed a 100% increase in property taxes for non-EU residents. This would raise the current 7% transfer tax to 14%. However, this proposal is still under discussion and has not been enacted.
Practical Tips for Buyers
- Due Diligence: Always verify the property’s tax classification (new build vs. resale) to ensure correct tax application.
- Legal Representation: Engage a local lawyer to navigate the legal complexities and ensure all documentation is in order.
- Budgeting: When planning your budget, account for all taxes and fees to avoid unexpected expenses.
Understanding these taxes and costs is vital for a successful property investment in Marbella. By staying informed and seeking professional advice, you can make well-informed decisions and enjoy the benefits of owning property in this lovely region.