Property Developer Costa Blanca

New Development in Costa Blanca: Meaning and Implications in the Real Estate Market

Costa Privée Capital supports you in the acquisition and investment of new developments in Costa Blanca. Discover a wide selection of listings for new real estate developments, whether houses or apartments, available for sale throughout Spain. Our legal and tax advisors are at your disposal through the dedicated sections: “Advice,” “Investment,” “Financing,” and “Low-Energy Housing.” You can also explore the new build market in several cities on the Costa Blanca: Jávea, Dénia, Moraira, Benissa, etc.

The real estate market is a complex field, full of terms and concepts that can be confusing for homebuyers. One such term that often raises questions is “new development.” In this Costa Privée article, we’ll delve into this concept to better understand its meaning and implications in the property market.

The Many Particularities of a "New Development"

First, it’s important to understand that “new development” covers a variety of situations in the construction and housing sector. This term is not limited to building a property from scratch.

Some types of new developments in Costa Blanca include:

1. New Construction

This is the most obvious and clear case. It refers to buildings constructed from the ground up that have never been inhabited. These properties stand out for their modernity and high construction quality.

2. Renovation

Properties that have undergone significant structural modifications can also be classified as “new developments.” These changes may include installing an elevator or creating an underground garage, as long as they are substantial enough to require a new legal registration.

3. Complete Refurbishment

When a home has undergone a major transformation, such as adding a new floor or completely reconfiguring interior spaces, it may also be considered a new development for legal and public purposes, even if the original property was older.

4. Previously Unregistered or Illegal Properties

Land or buildings that were once illegal or unregistered and have now obtained legal status can also be considered new developments. In this case, the legal status is what matters, not the original condition of the property.

Tax Implications

The tax implications of a property classified as a “new development” vary depending on the type of construction. Generally, these properties are subject to Value Added Tax (VAT), typically at a rate of 10%, although this can vary by region or if it is a subsidized housing unit.

In addition to VAT, there are other associated costs, such as:

• Notary fees: around €1,500

• Land registry fees: about €700

• Legal or administrative advisor fees (optional): between €1,800 and €2,500

In cases of major renovations or significant works, other taxes and fees may apply, including construction permits and related costs.

New Development Certificate and Final Deed

The new development certificate is an official document issued by an architect or certified technician confirming that the construction complies with urban planning regulations. It is essential for registering the property and obtaining the final deed.

The final deed of new development, also known as the certificate of completion, is issued at the end of the construction and certifies that the work has been completed in accordance with the approved plans. It is required to obtain the occupancy permit and the certificate of habitability.

The Deed Process for New Developments: A Closer Look

Buying a home, especially a new build, involves various legal and administrative aspects. Whether it’s newly built or heavily refurbished, a property must follow specific procedures to be fully legal and compliant.

Properties Under Construction

For properties still being built, a clear and structured process is essential. Developers must meet several requirements, including:

• Building and municipal permits: provide legal authorization to build, including floor plans and location details.

• Professional compliance certificate: issued by a technician confirming that the work adheres to plans and regulations.

Completed Properties

For finished developments, additional documents are required, such as:

• Land ownership deed

• Completion certificate

• Ten-year insurance: covers structural defects for 10 years

• Occupancy license

• Certificate of habitability

• Energy efficiency certificate

• Building logbook: includes plans, specifications, and relevant info

• Technical Building Inspection (ITE): ensures structural safety and legal compliance

The Role of the Notary

The notary plays a key role in formalizing the process. They draft public deeds, verify documentation, and ensure everything complies with current regulations. Their involvement guarantees legal security and transparency in property transactions.

Deed Costs for New Developments in Costa Blanca

The costs associated with purchasing a new development property vary depending on several factors. Here is a breakdown of the main expenses:

1. Stamp Duty (AJD)

Applied when formalizing a mortgage, it generally ranges from 0.5% to 1.5% of the loan amount, depending on the autonomous community.

2. Notary Fees

These vary based on the complexity of the transaction, typically ranging between €600 and €2,000.

3. Land Registry

To register the property, fees generally range from €600 to €1,000.

Registering the property is essential, as it ensures the legal protection and public recognition of the real estate asset.

4. VAT on New Builds in Costa Blanca

The standard VAT rate is 10%, but it may vary depending on the type and location of the property.

Other Costs to Consider

• Additional notary expenses, such as extra copies of the deed

• Advisor or lawyer fees: typically between €1,500 and €2,500

• Other local taxes or fees, depending on the town or property features

In summary, when buying a new build home in Costa Blanca, it is essential to consider a range of costs beyond the sale price. Understanding all these expenses will help you budget effectively and avoid unpleasant surprises during the acquisition process.