How to buy properties in Costa del Sol for foreign investors: a practical guide

Discover the allure of the Costa del Sol, nestled in the captivating region of Andalusia, Spain, where plenty of opportunities are waiting for foreign investor. Our comprehensive guide unveils the enticing advantages of investing in this sun-kissed paradise, showcasing the flourishing tourism industry and the lucrative potential of its real estate market.

Delve into the intricate details of legal requisites and investment procedures specific to the Costa del Sol, ensuring a smooth and secure investment journey. We illuminate the most promising investment prospects in the region, offering valuable financial insights and guidance tailored to maximize returns.

But it’s not just about numbers and regulations. Immerse yourself in the vibrant lifestyle that defines the Costa del Sol – from its tantalizing gastronomy to its rich cultural tapestry and plethora of outdoor adventures.

Why  investing in Costa del Sol

The Costa del Sol, presents many advantages for foreigninvestors eyeing the burgeoning real estate and tourism sectors. Here are somekey highlights:

1.     Thriving Tourism Sector: The tourism industry on the Costa del Sol is in a constant state of expansion, offering lucrative investment prospects. Drawing millions of visitors annually, both domestic and international, the region's allure lies in its exceptional climate, pristine beaches, and diverse array of leisure activities. This sustained influx of tourists ensures a robust return on investment, particularly in vacation rental properties. Has been recently reported by the local paper “Diario Sur” that a record of over 74,000 properties are now been official holiday rental in the province of Málaga, from 42,277 in 2019, an increase of 76.8%. Link to news

2.     Well-Established Tourism Infrastructure: Bolstering its appeal, the Costa del Sol boasts a well-developed tourism infrastructure encompassing a wide spectrum of amenities. From an extensive selection of hotels and restaurants to world-class golf courses, theme parks, and aquatic adventures, the region caters to every travellers’ whim. Such amenities not only enhance the visitor experience but also elevate the region's attractiveness to investors in the tourism sector.

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As reported in our insight “Costa del Sol: from holiday charm to economic excellence”, all Malaga province underlying economy is recording higher than average growth, surpassing other Spanish touristic destinations like Barcelona and Palma de Mallorca for its momentum.

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Investing in the Costa del Sol means aligning with a dynamic market fuelled by ever-growing tourist demand and supported by a robust infrastructure. It's a prime opportunity to capitalize on the region's charm and secure promising returns in both the short and long term.

PRACTICAL GUIDE:

Navigating the legal landscape of investing in the Costa del Sol requires a thorough understanding of the rules and regulations governing foreign investors. Despite the region's allure as a prime destination for foreign investment, adherence to legal requirements and procedures is paramount.

Foremost among these requirements is the acquisition of a Foreigner Identification Number (NIE) from the Foreigners Office, a prerequisite for any real estate transaction in Spain. This identification number serves as a crucial identifier throughout the investment process.

The NIE can be applied for directly in Spain or at the Consular Office of the place of residence of the interested party. The application can be made in person or through a duly accredited representative. The physical presence of the applicant or his/her representative is always mandatory.

Furthermore, foreign investors must familiarize themselves with the intricate regulations and limitations pertinent to property acquisition in the Costa del Sol. Restrictions may pertain to the purchase of rustic land, environmental conservation measures, and land use guidelines, among others.

Seeking legal counsel is indispensable to ensure compliance and security throughout the investment journey. A specialized real estate lawyer can provide invaluable guidance on legal and tax considerations, ensuring meticulous adherence to regulatory frameworks before any contractual agreements are finalized.

HOW TO OBTAIN RESIDENCY IN THE COSTA DEL SOL

If the objective of real estate investment on the Costa del Sol is to obtain residency, there are additional procedures to be followed. To obtain residency in Spain, foreign investors can choose to apply for a "Golden Visa", which mandates a minimum real estate investment of 500,000 euros. Alongside this investment, applicants must demonstrate financial stability and procure private medical insurance. Upon obtaining residency status, foreign investors gain parity with Spanish residents, enjoying equivalent rights and entitlements, including access to education, healthcare, and public services. However it is important to highlight that the Golden Visa scheme obtained by real estate investment has been put under review by the Government in April 2024.

There are other  11  ways to get Spanish residency in Spain as a non-EU citizen:

·       Student visa

·       Business visa

·       Non-lucrative residency visa

·       Work permit as an employee of a Spanish company

·       Family member of an EU citizen visa

·       Family regrouping visa

·       The arraigo procedure

·       Asylum and the red card

·       EU blue card

·       Research residency

·       Visa for digital nomad and remote workers

At Holox Invest we can help you talking to the best local legal advice who can help you find out what is best and more appropriate for you.

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FINANCIAL ADVICE FOR FOREIGN INVESTORS

Securing sound financial guidance is paramount for foreign investors navigating the dynamic real estate landscape of the Costa del Sol.

Within this coveted region of Spain, an array of banking institutions and specialized advisors stand ready to assist discerning investors. These establishments offer tailored financial solutions catering to the unique needs of foreign clientele, including international banking services, foreign exchange facilities, and mortgage financing options. Leveraging their deep-rooted expertise and intimate knowledge of the local market, these banks furnish invaluable insights and recommendations on optimal investment avenues.

Moreover, dedicated investment advisors specializing property investments further augment the investor's toolkit. Staffed with seasoned professionals possessing intricate knowledge of the real estate sector, these advisors furnish bespoke financial counsel tailored to the unique objectives and preferences of each investor. Armed with such expert guidance, foreign investors can confidently navigate the intricacies of the Costa delSol's real estate market, ensuring informed and strategic investment decisions.

When evaluating banks and investment advisors on the Costa del Sol, prudent consideration of their reputation and track record is imperative. Conducting thorough research and undertaking comparative analysis among various options is recommended prior to reaching a decision. Furthermore, soliciting references and insights from fellow foreign investors who have previously engaged the services of these entities can offer valuable perspectives. By exercising due diligence in this manner, investors can make well-informed choices aligned with their financial objectives and preferences.

Our Investments specialists can rely on financial advisors from the top reliable local banks who can assist you structuring the best funding for your investments at local or better market rates.

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TAXATION IN SPAIN

In addition to the allure of its real estate market, foreign investors stand to gain from advantageous tax incentives when considering property investments in the Costa del Sol.

Spain extends several tax benefits tailored to foreign investors, notably through the mentioned "Golden Visa" program. Under this initiative, non-residents can secure residency in Spain upon making a minimum real estate investment of €500.000, presenting an appealing prospect for those desiring residency or a secondary abode in the Costa del Sol.

Furthermore, Spain's favorable tax regime for "non-habitual residents" offers another avenue of advantage. This special tax system affords tax exemptions on income earned outside of Spain for a duration of up to 10 years, presenting significant tax-saving opportunities.

While these tax benefits can be compelling for foreign investors eyeing properties on the Costa del Sol, seeking professional counsel is advisable to comprehensively grasp the tax implications and ensure adherence to regulatory requirements.

In Spain, there are notable tax advantages associated with purchasing properties within a corporate structure.

One significant benefit is the potential reduction of transfer tax liability. When acquiring real estate through a corporate entity rather than as an individual, buyers may avoid or minimize transfer taxes, thereby optimizing their overall investment costs.

Additionally, corporate ownership can offer favourable tax treatment on rental income. Income generated from rental properties held within a corporate structure may be subject to corporate tax rates, which can be lower than personal income tax rates. This can result in increased profitability and enhanced cash flow for investors.

Furthermore, corporate ownership allows for greater flexibility in managing tax liabilities and structuring investments especially for aforeign investor and his family. Through careful planning and strategic use of corporate entities, investors can leverage various tax deductions, allowances, and incentives to maximize their after-tax returns.

However, it's crucial to note that navigating tax regulations and compliance requirements associated with corporate property ownership can be complex. At Holox Invest we always recommend to get guidance from tax professionals and legal advisors with expertise in Spanish tax law, which is essential to ensure optimal tax efficiency and compliance with regulatory obligations in a always changable environment.

At Holox Invest, we extend a comprehensive guide tailored for foreign investors with an interest in the Costa del Sol. Explore the advantages of investing in this region, boasting a solid tourism industry and a dynamic real estate market ripe for profitable ventures.

Our guide encompasses detailed insights into the legal prerequisites and investment procedures, ensuring investors are well-informed before making any commitments. Additionally, we provide comprehensive coverage of promising investment sectors and high-yield real estate opportunities.

Furthermore, we cover for any expert financial advisory services you might need through our network of professional and regulated local entities, alongside information regarding available resources and amenities. Delve into the vibrant lifestyle and diverse array of activities awaiting you on the Costa del Sol.

For further details, contact us and book an appointment with one of our specialists to uncover the boundless opportunities that our region has to offer.

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