Spain, and specifically the Costa Blanca, remains one of the most sought-after destinations for international buyers. However, amid the excitement of finding the perfect property, many buyers overlook critical legal, tax, and urban planning issues. What appears to be your dream home can quickly turn into a source of unexpected expenses.
At Albir Abogados, backed by decades of experience in real estate and tax law in the Valencian Community, we help clients from all over the world secure their investments. Here are the 10 most common mistakes you must avoid this summer:
1. Falling in love with the property before checking its legal status
The biggest mistake is focusing solely on the views or the design. Before signing any reservation agreement or paying a deposit, conducting a comprehensive legal audit (due diligence) is absolutely essential—virtually mandatory. It is vital to verify ownership at the Property Registry (Registro de la Propiedad), check for outstanding charges or liens, and request an official Registry Certificate (Nota Simple) to ensure you do not inherit someone else’s debts. If you pay first and investigate later, your leverage in negotiations disappears.
2. Skipping independent legal advice
Relying blindly on the estate agent or the developer is an unnecessary risk. Even when acting in good faith, their commercial interests differ from yours. An independent property lawyer works exclusively for the buyer, detecting urban planning and tax risks before they turn into irreversible problems.
3. Underestimating the actual costs of the purchase
In the Valencian Community, following the recent tax reform, taxes and expenses associated with a purchase range between 11% and 13% of the sale price (and can be higher for luxury properties). This includes the Property Transfer Tax (ITP), whose general rate now stands at 9% for resale properties but rises to 11% for acquisitions exceeding €1,000,000. For new builds, a 10% VAT applies, plus a reduced Stamp Duty (AJD) of 1.4%, on top of notary, registry, and legal management fees. Furthermore, if the seller is a non-resident, the buyer is legally required to withhold 3% of the purchase price and pay it to the Spanish Tax Agency.
4. Ignoring holiday rental restrictions (Tourist Licences)
Are you planning to generate rental income from your property? Checking the Community of Owners’ statutes (which can restrict or ban rentals now or in the future) is no longer enough. In the Valencian Community, you must strictly comply with the maximum allowed rental days, obtain a favorable Town Hall urban compatibility report, and register the property with the Regional Tourism Department. Operating a tourist accommodation (VUT) without this is illegal and carries severe fines.
5. Failing to audit the legality of previous renovations
Many villas have undergone extensions—such as swimming pools, glazed terraces, or converted basements—that are missing from the Title Deeds and the Cadastre. It is vital to analyze whether these works had a licence, if the time limit for building infractions under Valencian planning law (LOTUP) has expired, and if they can be legally registered as an “old-established building” (Obra Nueva por Antigüedad). In the latter case, it is crucial to understand what being classified as Asimilado a Fuera de Ordenación (AFO) means and the future limitations it will impose on you.
6. Miscalculating ongoing annual ownership costs and taxes
Owning property in Spain triggers recurring tax obligations. Non-residents must file an annual Non-Resident Income Tax (IRNR) return—a tax many discover too late—in addition to the local Property Tax (IBI), refuse collection fees, and community of owners’ fees.
7. Delaying your NIE application and bank account opening
The summer market moves fast. To buy a property in Spain, an NIE number (Foreigner Identification Number) is legally mandatory. Delaying this process, or failing to anticipate the strict Anti-Money Laundering (AML) compliance checks required to transfer your funds, can cause you to lose the property or breach the deadlines set out in your deposit contract.
8. Confusing tourist stay limits with Tax Residency
For non-EU buyers (such as UK citizens), the tourist visa limit is 90 days per semester. However, if you spend more than 183 days a year in Spain, the Spanish Tax Agency (Hacienda) may deem you a tax resident, meaning you would be liable to pay tax in Spain on your worldwide income. Planning this beforehand is essential.
9. Succumbing to summer market pressure
The summer season creates a false sense of urgency due to the high influx of tourists and buyers. Making rushed decisions under sales pressure, while skipping the expert review of agreements like the Arras (deposit) or private purchase contracts, is the leading cause of subsequent court litigation.
10. Overlooking inheritance and estate planning
Buying a property is a long-term investment. From day one, you should anticipate the tax impact of a future donation or inheritance. Drafting a Spanish will limited exclusively to your Spanish assets, fully coordinated with your national law under the European Succession Regulation, will save your heirs thousands of euros and extensive bureaucratic headaches.
How Can Albir Abogados Help You?
At Albir Abogados, we manage the entire conveyancing and purchase process in Altea and across the Costa Blanca. Through our specialized division (www.therealestatesolicitors.com), we handle comprehensive due diligence, contract drafting and review, NIE processing, tax liquidation, and final registration at the Property Registry. We ensure your investment is legally and financially secure from day one.