The ultimate guide on how to buy a home in Orihuela Costa

Spain’s property market is currently booming, with property prices expected to decrease below inflation rates in the coming year. Because of this, many people are taking the exciting leap of buying a new home, whether for a complete change or for a second home in the sun. If you’re looking to move somewhere along Spain’s gorgeous Costa Blanca, with a superb Mediterranean climate, well-developed infrastructure and stunning coastline dotted with coves, Orihuela Costa could definitely be the place for you. 

So you may have spent hours scrolling through real estate sites to find your perfect property but you’re not really sure where to go from there. Don’t worry, the Euro Weekly News has written a guide on how to buy a home in Orihuela Costa, including which types of properties are available and details on the actual process of buying a home in Spain, as well as a list of recommended all-important estate agents to help you secure your perfect property. 

The types of homes in Orihuela Costa 

Orihuela Costa is a very attractive option for many potential buyers – both economically and aesthetically. Although actually around 20 kilometres away from the main resort of Orihuela, it borders the region of Murcia, home to the bustling city of the same name, and beautiful Mar Menor, the biggest saltwater lagoon, despite what its name may suggest. Orihuela Costa’s ideal location means you’re never far from amenities, facilities and leisure attractions without missing out on those all-important rest days by the beach. 

As one of the most highly developed – and therefore popular – areas in southern Costa Blanca, Orihuela Costa is mainly comprised of new-build properties such as houses, bungalows and apartments safely housed in modern residential complexes. For those looking towards the upper end of the housing market, there are also luxury villas, penthouses and duplexes aplenty. 

Due to the wide range of properties on offer, prices can vary depending on whether you’re looking for a small, unassuming holiday home, or a luxurious complex that is grand and sophisticated enough to invoke jealousy in all of your guests. On average you can expect to pay around €30,000 for an apartment or around €100,000 for a villa. 

How to buy a home in Orihuela Costa

Legal Advice

One of the first things you should do when considering buying a property in Spain is to seek legal advice from an independent lawyer who specialises in Spanish land law (urbanismo). An independent lawyer will work on your behalf exclusively rather than with the interests of a property agent or developer. 

The Spanish property conveyancing system is different to the UK system so you should ensure that those involved in the transaction are qualified and experienced in Spain. To avoid scams, exercise extreme caution if an estate agent or lawyer advises ways to save money or time by cutting corners. It’s essential throughout the whole process that every necessary legal document is read through and filled out appropriately. Keep on reading to see our recommendations for the best estate agents to buy your property in Orihuela Costa.

A lawyer will help you with things like the land registry extract (nota simple) which is available from the Colegio de Registradores and which you must read before making any purchases or signing any documents. 

Spanish notaries 

You’ll need a Spanish notary public to prepare the sale contract and issue the public deeds in order for you to secure your new home in Orihuela Costa. The decision as to which notary you’d like to use is down to you as the purchaser of the property. They are a public servant whose duty is to provide free and impartial legal advice on all parts of the contract pre-signature. Once a date has been set for signing, you have 3 days beforehand to visit the notary and ask any questions you may have. 

Here you can find a list of English-speaking notaries. 

British Estate Agents, Promoters and Lawyers 

If you’ve not gotten to the end of this article yet and you’re considering working with a British estate agent, lawyer or promoter, you need to make sure that they are qualified, reliable and have experience working in Spain. Lawyers especially also need to be registered with the official Law Society in the UK and specialise in international transactions.

However, if you go with a Spain-based lawyer, you can check that they are registered and practising with the local bar association (Colegio de Abogados) by requesting their registration number. It is also imperative that your lawyer has professional indemnity insurance and that you do not make any payments or sign any documents until you have sought independent legal advice. 

Translators 

Suppose your Spanish isn’t up to the legal jargon level. In that case, it’s important that you have all of the relevant documents and contracts translated by an independent translator to ensure that you understand everything at every step of the process. 

Mortgages 

Often people looking to buy properties do so with the intention of applying for a mortgage rather than buying the property outright. It is strongly recommended that you analyse and compare different product services offered by lending companies to ensure that you’re getting the best deal. The lender should be able to explain if you have any doubts about the terms and conditions. For more information on how to get a mortgage in Spain, click here. 

As with buying a home in the UK, there are a range of mortgages on offer which vary according to repayment periods, interest rates and initial starting fees. Whether you choose a fixed-rate mortgage or a variable-rate mortgage, it’s important that you fully understand the mortgage agreement you sign. 

If you are applying for a mortgage you will have to pay for an appraisal of the property. This is often organised by the bank. After this property valuation has been carried out, the bank will know what percentage of financing it can provide.

Banks in Spain usually lend an amount equivalent to 80 per cent of the purchase price or appraisal value, although some are managing to finance 90-100 per cent of the purchase price, usually settling on the lowest. In 2022, the valuation will cost between €250 and €600 depending on the company carrying out the process, the type of property and its valuation. Some, but not all, banks will cover these costs. Once the valuation is complete, it is valid for six months from the date of issue. For more information on mortgages, click here. 

NIE – foreigners identification number 

As a foreign buyer, you’ll need an NIE (Numero de Identidad de Extranjero) number to carry out any fiscal transactions in Spain such as opening a bank account or buying a property. You can obtain an NIE number by registering as a resident at the Oficina de Extranjeros (immigration office) in Spain or a designated police station. If you’re looking to buy a property but haven’t yet made the move to Spain you can apply for an NIE number at the Spanish embassy or consulate in the UK.

Alternatively, if you grant your lawyer Power of Attorney (PoA), they will be able to obtain the NIE number(s) on your behalf. An advantage to granting your lawyer PoA is that they would also be able to open a bank account for you. Whilst this is useful for setting up direct debits in order to pay any community charges, utilities, broadband, council tax etc, it is vital for cheques/banker’s drafts when it comes to property completion. 

Taxes and additional costs 

Taxation in Spain is a complex issue and taxes associated with buying, selling and renting property in Spain differ from region to region. 

In Orihuela Costa, for example, buyers have to pay 10 per cent tax on the value of trading only when the property is a new build and has been purchased directly from the promoter. Whereas for a resale property, tax (usually between six and ten per cent of the deed price) must be paid on the transferral of assets. 

It is always advisable to seek the advice of an accountant or professional tax advisor. Information can also be found on the Spanish tax authority’s website (Agencia Tributaria) and on the Living in Spain guide. 

Other additional costs you will want to take into account include a reservation deposit. This is what you pay to have a property taken off the market and is usually between five and 10 per cent of the property’s price. It’s recommended that in order to make sure you have enough money to cover taxes, notary fees, legal fees, land registry and bank charges etc, you put aside at least 15 per cent of the purchase price. 

What documents do you need to buy a home in Orihuela Costa?

You will need many documents when buying a property in Orihuela Costa. The best and safest way to make sure that you have everything in order is to sell through an experienced real estate agent who can help and give guidance throughout the whole process. Costa Blanca Homes in Spain is the best in the area to help you to organise the correct and relevant paperwork and to help you on your journey. 

The main documents you need may include:

• Your NIE and passport.
• Deeds of the property.
• Preparation of utility contracts, community charge and “Suma” invoices.
• Liaison throughout the transaction with representatives of the Buyer and Notary.
• The organisation of the Notary appointment and all paperwork related to the sale.
• Translation at the Notary.
• Calculation of 3 per cent retention.
• Calculation and advice regarding Capital Gains Tax.
• Fiscal representation throughout the whole process.
• Calculation of Goodwill and a letter of “Good Standing” with your community fees from the administration of your community.

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