With its picturesque coastline, year-round sunshine and vibrant culture, Costa Blanca South is a dream destination for many interested in buying a holiday home. Investing in a holiday home in Costa Blanca can provide you with endless opportunities for rest and relaxation and can be a viable source of rental income should you decide to make it available to holidaymakers. However, purchasing a holiday home is a significant financial decision that requires careful consideration. To help you avoid potential pitfalls, we’ve compiled a list of common mistakes to avoid when buying a house in Costa Blanca.
Pitfalls of Buying a House in Spain
From La Zenia to Villamartin to Cabo Roig, there are so many desirable locations to choose from if you’re considering setting up a second home in Costa Blanca. To make the process easier, here are some of the most common house-buying mistakes that can occur when buying a holiday home in Costa Blanca
Failing to Do Legal Due Diligence.
You may think that buying a home is a universal process, however, when it comes to buying a holiday home in Costa Blanca, there are a few legal considerations that differ from the UK. In Spain, before a UK citizen can buy a property, a Foreign Identification Number needs to be obtained.
Also known in Spain as an NIE number (Número de Identidad de Extranjeros), the Spanish ID card for foreigners is a form of identification that allows foreign nationals to partake in certain transactions and activities like opening a bank account, buying a property or starting a business. You can apply for an NIE in Spain or in the UK at a Spanish embassy, and many people apply during the process of buying a holiday home in Spain.
Failing to Research Property Taxes in Spain
There are also some tax considerations that will apply to you when investing in a holiday home, especially if you plan to rent out the property. Purchase and local taxes will vary depending on where you plan to buy the holiday home and whether you buy a new build property or a pre-owned property. Spanish Wealth Tax considers the amount of Spanish assets you own as a non-resident.
If you decide to rent out your holiday home in Costa Blanca, you will be subject to Spanish income tax. If you choose not to rent out your holiday home and you don’t use it as your main residence, you will also be subject to paying tax on the “notional rental income”. This is a tax payable on the income your property could generate if it were available for rent. Enlisting the help of reputable Spanish estate agents will help you to find out which taxes are applicable to the purchase of your holiday home.
Overlooking the Accessibility and Convenience of the Location
When you fall in love with a holiday destination, it’s easy to overlook what might be important to you as a regular visitor to the area. Whether you plan to buy a holiday home for yourself or with the intention of renting, it’s crucial to consider accessibility and convenience factors. Determine the distance from the nearest airport, amenities like supermarkets, restaurants, and medical facilities, and the proximity to popular tourist attractions. Think about how easily you can access the property throughout the year, especially if you plan to visit frequently or rent it out. An inconvenient location can make it challenging to enjoy your holiday home and affect its potential for rental income. If you plan on renting your holiday home, the seasonal variations and amount of competition in the area should also be taken into consideration.
Underestimating Additional Costs
Underestimating the full cost of your investment and the additional associated fees are examples of other common house-buying mistakes to avoid. In addition to taxes, you’ll be subject to a number of other costs outside of purchasing a holiday home in Costa Blanca. Some of these costs include notary fees for the official registration of the property, as well as legal fees for hiring a lawyer to handle the transaction and ensure all necessary documentation is in order. Property registration fees, mortgage fees (if applicable), and appraisal fees might also be part of the overall costs. Furthermore, ongoing expenses such as property taxes, community fees (for shared amenities), home insurance, maintenance, and utility bills should be factored into the financial planning. It is advisable to carefully consider these costs to make an informed decision and accurately estimate the total expenditure of owning a holiday home in Spain.
Failing to Buy a Property With Resale Prospects
Buying a holiday apartment in Costa Blanca with good resale prospects can be a wise investment for many reasons. Costa Blanca has many desirable locations where the value of the property will appreciate over time. Choosing the ideal location will ensure that you can potentially earn a profit when you decide to sell. Owning a holiday home with good potential for resale provides you with an exit strategy should circumstances change suddenly. Life can be unpredictable and being able to sell a holiday home quickly can give you peace of mind and provides a viable option to recover your investment if necessary.
Not Seeking Expert Property Advice
With so many factors to consider when purchasing a holiday home in Costa Blanca, it is essential to seek expert advice to ensure a smooth and successful transaction. From local property market knowledge and legal expertise to language assistance and negotiation skills, Spanish real estate professionals bring valuable experience and guidance that can save you time, money and potential headaches. Spanish real estate experts in Costa Blanca will also understand the nuances of the local real estate market including price trends and property values which is priceless information when making informed decisions and avoiding poor investment choices.
When it comes to purchasing a holiday home in Costa Blanca, Welcome Estates can help you with every aspect of the process so you can avoid making mistakes that can cost you valuable time and money. As a multi-lingual estate agency, our team can help you to navigate the language barriers, cultural differences and legal requirements related to purchasing a holiday home in Spain. So whether you are interested in holiday homes in Alicante, Torrevieja or purchasing a property in Orihuela Costa, our knowledgeable team can assist you every step of the way. If you want to learn more about how to buy a holiday home with Welcome Estates contact us today for more information.