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Spanish Algarve Frequently Asked Questions

Costa de la Luz Real Estate FAQ's

Why choose the Spanish Algarve?

The Spanish have been keeping this area to themselves - it is a piece of authentic Andalucia. Natural surroundings punctuated by unspoiled towns attract people looking to stay away from the overdeveloped Mediterranean Costas.

Property prices are still significantly cheaper than the Portuguese Algarve and Spain in general, and over the past three years the region has experienced a growth rate of approximately 22%. Interest is continuing at a steady, sustainable rate.

It is accessible to the whole of Northern Europe (and indeed the world) through the international airports of Faro and Seville and this ensures solid communication links for the future.

Strict planning rules limit development. This control means that new property is sympathetically added to the area and also restricts the supply of property. As a result, there is less competition for holiday lets and resale properties from an investment perspective.

Why choose Spanish Algarve Properties?

Rather than cover many areas we have chosen to specialise in just one - the Algarve. Our experience of this coastline spans 30 years. We have built up a detailed knowledge of the region and nobody knows it better. With 2 local offices and a maintenance and rental company, Spanish Algarve properties offer a complete service for anyone who wants to deal with the specialists.

What is the rental market like?

We are currently achieving between 15-25 weeks rental a year for our clients on the Spanish Algarve through our local property services company This is proving more than enough to cover our client's costs for owning property in the area. The market is growing and is already strong locally (Seville), in Portugal and Northern Europe.

Is the Costa De La Luz Windy?

The northern Costa De La Luz or Spanish Algarve is sheltered by the peninsular of Faro and is not windy. The southern Costa De La Luz is exposed to the Atlantic coast and as such, is windy and popular with wind/kite surfers.

What fees can be expected during the buying process?

  • VAT (IVA): 7% on new build house.
  • Or, 16% on land.
  • Or, 7% property transfer tax on resales.
  • Property transfer tax ITP: 0.5 to 1%.
  • Stamp duty AJD: 1%.
  • Land registration fee: Variable and similar to notary costs.
  • Notary fee: Sliding scale €60 on house value of €150,000, €150 on €600,000.
  • Spanish lawyer fee: 1%.
  • TOTAL COST: 10%.

How do I view properties in the area?

The best way to visit the area is with us on a viewing trip. Our trips are second to none in this industry. We offer a bespoke viewing experience where you will have our total focus; no tour buses, we promise! Equally if you prefer to travel by yourself we can provide the support you need when searching for the right property.

During our trips you will be under NO PRESSURE to buy what so ever. We firmly believe that the area sells itself. As you already know, we are a family business with property interests in the area and a friendly, impartial, all encompassing service. Our colleagues in the area are not working on commission!

All we ask for is a confirmation of available funds, a general knowledge of the area and definite requirements.

Can I reserve a property?

YES. Many of our clients choose to put down a refundable deposit to fix the price of a property and take it off the market until they can visit the area to view it. These refundable deposits are not offered by every developer, but are usually £2000, giving you 30 days to view and decide whether or not to buy. This put you under NO OBLIGATION.

How much will my property cost to run?

Maintenance costs if within an urbanisation vary by development but are from £30-£60/month to include all maintenance of common parts. Running costs for property in Spain are much lower than in the UK. Approximate monthly costs to include all necessary utilities and taxes (electricity, water, gas, sewage, community charge and local taxes) are around £120: 2 bed apartment; £135: 3 bed townhouse and £245: 4 bed detached villa.

Can SAP advise on Mortgage Brokers familiar with Spanish Properties?

Many developers of new properties offer mortgages of up to 70% over 20 years for non-residents. These mortgages are usually good value as the developer is able to secure a favourable rate of interest.

Spanish banks will also offer anything up to 70% for European residents and there are Northern European banks and building societies that will provide mortgages. Some useful web addresses are as follows:

Can SAP advise on Spanish speaking lawyers?

YES. Contact us for a list of our recommended local and northern European Spanish speaking lawyers.

Is our money protected?

YES. All developers in Spain must provide bank guarantees by law. These are in place to insure your stage payments (if buying off plan) and any interest that you would have earned from the money.

Is it necessary to open a Spanish bank account?

YES. It is a requirement to open a Spanish Bank Account.

To open a bank account a NIE is required - a certificate of non-residence, which is obtainable from a police station upon presentation of two passport photographs. Spanish Algarve Properties can assist.

How do you establish the right to live permanently in Spain?

If you plan to reside in Spain for more than 90 days at any one time you need a residency card, obtainable from a police station.

Are the properties freehold or leasehold?

All properties in Spain are freehold.

Are properties connected to the utilities?

YES - after presentation of the 'Licence of Habitation'.

Is Building Structure Insurance necessary?

For an individual villa it is necessary to arrange insurance.

For a property within an urbanisation the insurance forms part of the management company's role and the cost is within the community maintenance charge.

Is Building Contents Insurance necessary?

As in UK.

What Licences are involved when buying a new property?

There are two principal licences:

  • Building Permit equivalent to UK planning permission.

  • Licence for Habitation which is issued upon construction completion and is needed prior to the payment of the final sums, signing of Escritura, and connection of services.

What are the names of the Spanish property purchase contracts?

Contracto Privado de Compraventa and Escritura de Compraventa.