Because of its sweet and sunny weather, Costa Brava attracts visitors all year round. Something that has not escaped the attention of investors, seduced especially by its affordable prices per square meter. If you are also considering the purchase of a property in Costa Brava, to have a place to stay or to invest in seasonal rental, here is the essential information that you need before signing the contract.
Casa Botanic by Emerald Stay
Why is it interesting to buy a property in Costa Brava?
Unlike most beach destinations, Costa Brava is alive during the whole year. Even in the middle of winter, visitors are welcomed by lively restaurants and bars, and can enjoy the natural beauty of the region. Cultural excursions, visits to architectural heritage sites, scuba-diving, hikings in national parks, a walk on the beach: all of this is still possible even in the low season.
Add to that easy access by road and by plane and that’s all you need to attract tourists, especially from Europe, even for weekends and short stays.
By choosing the right location, investing in a Costa Brava accommodation can therefore prove to be very profitable thanks to low rental options currently available for tourists.
How much does it cost to purchase a villa or apartment in this region?
This is one of the biggest advantages of Costa Brava: there is something for all pockets. In the remote little towns it is not rare to find prices around €1000/sqm, but naturally they rise as the location gets closer to the beach.
In the most touristic places, a property with sea views can be easily bought for around €3000 to €4000/sqm, be it an apartment or a house. For the properties that are truly rare and exceptional, it is impossible to name a price per square meter, but the owner must be willing to pay a high amount.
Photo by Jorge Salvador - Unsplash
Where to invest in Costa Brava?
The demand is high on the coastal towns, especially from a foreign clientele, and that’s why 30% to 50% of the real estate purchases are done by them.
It comes with no surprise that inland properties are more affordable, but one can still find similar prices in the coast, more specifically in Selva, Lloret de Mar and Blanes. On the other hand, the prices in Cadaques, Begur and Platja d’Aro can easily go above €2500/sqm, the average for Costa Brava.
To understand where to invest according to your budget, it’s important to know the usual prices of each destination in Costa Brava:
Empuriabrava: 2700 €/m2 approximately
Roses: 2500 €/m2 approximately
Escala: 2400 €/m2 approximately
Platja d’Aro: 3300 €/m2 approximately
l’Estartit: 2400 €/m2 approximately
Tossa de Mar: 2500 €/m2 approximately
Blanes: 2000 €/m2 approximately
Lloret de Mar: 2000 €/m2 approximately
Palamos: from 2700 €/m2 to 3200 €/m2
Begur et Palafrugell: from 3500 €/m2 to 4500 €/m2
Cadaques: from 4500 €/m2 to 6000 €/m2
Is it better to purchase an apartment or a house in Costa Brava?
We would love to answer “whatever you like the most!”, but if you are buying the property with seasonal rent in mind, it is evident that your personal taste is not the only thing you should take into account.
Having an attractive property will ensure a high occupancy rate with matching revenues.
If you are targeting a wealthy clientele, your property should meet their usual expectations by offering:
privileged location : views over the Mediterranean, close proximity to the sea, the absolute tranquility of the countryside or, on the contrary, the bustle of a popular beach are things that most tourists look for when staying in a Costa Brava accommodation. It’s difficult to go wrong with a property that has these characteristics.
high standard services: a new apartment, spacious and well equipped; a luxury villa with outstanding views; or a charming ancient building, completely renovated with a pool… they can easily seduce a wealthy and demanding clientele. but when investing in a luxurious property, it is important to remember that putting it to rent without the hotel-like service of a private concierge becomes difficult. The type of visitors that you want to attract is used to staying in places that meet certain high standards that you will have to attain.
easy access: if this point is not that relevant during long summer stays, it makes all the difference in the middle and low season, because a house that is far from the main roads and from the airports of Girona and Barcelona means more time on the road - which is not very attractive for short stays.
good connection: with the rise of remote work, having excellent mobile and internet signals are criterias that guests look closely at before deciding to rent a villa or an apartment. Forget the properties in dead zones, as charming as they might be…
New building or ancient building?
The choice you make at this point will have an impact on your budget. The taxes associated with purchasing a property are different in Spain according to the state of the building (new or old), and these fees might even vary from one region to another.
If you decide to buy a new property in Costa Brava…
You will need to pay the VAT (IVA in Spain, TVA in France), that is equal to 10% the price of the property.
On top of the VAT, you must pay as well the ADJ or IADJ (Impuestos de Actos Jurídicos Documentados). This is known in English as Stamp Duty, and can go as high as 1,5% of the price of the property, and one might need to pay it twice, in the case of mortgage.
If you opt for purchasing an already built apartment or villa…
In this case you won’t need to pay the VAT, but a fee on the transfer of the property (ITP- Impuesto sobre Transmisiones Patrimoniales), and the price varies per region. In Catalonia, the ITP is around 10% the price of the property if it costs less than €1 million, and 11% if it exceeds this price.
The ADJ fee also applies for ancient buildings, but only if you take a mortgage. In this case, it will be calculated based on the amount of the mortgage.
In any case…
To the fees mentioned above, one must add a variety of other fees to be paid, regardless of the type of the property:
notary fees
registration of the property
fiscal stamp
management fees
fees related to the mortgage (assessment of property, application fees, registration and management fees)
real estate agency fees (they are paid by the seller most of the time, but might sometimes be left for the buyer)
and very often, the fees of the lawyer to secure the sale.
Depending on the project, the fees related to the purchasing of a property can range from 13% to 20% of the selling price. Note that in the case of an investment in a new property for seasonal rental, it is possible to recover the VAT, so 10% of the price you paid! At Emerald Stay we have developed an unparalleled expertise in the field of VAT recovery for Costa Brava accommodations. If you are interested in this type of process, contact us!
What you need to know before buying a property in Costa Brava…
Before buying a villa or an apartment in Spain, you must ensure that the property is in the conditions you expect, and that the previous owner has paid everything they should before handing it over to you. In France, the buyers entrust this process to their notaries, and they take care of verifying everything and providing them with a diagnostic, as well as with all the necessary documents needed to secure the sale. In Spain, the notary doesn’t play the same role: they don’t take care of legal and regulatory aspects related to the sale, or urbanistic laws that vary from one city to another in Costa Brava.
Because of this, it is recommended to the buyers to hire a lawyer to help them check and record documents. This is even more necessary for foreign buyers who don’t understand quite well how the market of real estate investment works in Spain.
If you are a foreign buyer in Spain, you will need certain mandatory documents, in particular the identification number for foreigners (NIE - Numero de Identidad de Extranjero), that starts with an X or Y for Europeans.
Once you are the owner of the property, you must pay the tax on properties (IBI - Impuesto sobre Bienes Inmuebles), the equivalent of the impôt foncier in France or Council Tax in the UK. All owners, Spanish citizens or not, must pay this tax that usually costs between €1000 and €2000 per year.
… and to rent it out...
To be able to use your property as a Costa Brava accommodation, you must get a tourist license (HUT), which essentially gives you permission to rent your house. Mandatory in Spain, this tourist license complies with local norms and aims to create a standard for the seasonal rental and to ensure that certain services are provided for each type of property. The request for this license should be done at the townhall of the city where the apartment or villa is located.
If you stay in Spain less than 183 days per year, you are not considered a resident.
Therefore, you are subject to a fee called IRNR (Impuesto sobre la Renta de No Residentes), a fee that must be paid by all non-residents who own property in Spain. This tax applies whether your rent your house or not.
When it comes to rental taxes, they are charged as follows:
19 % of the net revenue (gross revenue minus expenses) to the owners who don’t reside in Spain but are citizens of a country in the EU or the EEA
24% of the gross revenue (before deducting expenses in this case) to the owners who are not European.
Income tax declaration must be done each quarter for the calculation of this tax.
For the time of the year when your property was not rented, a fictitious revenue will be calculated on a prorata basis, corresponding to the period of zero occupancy. This fictitious revenue is:
19% on top of the amount that corresponds to 1,1% of the cadastral value of the property if you are an European citizen
24% on top of the amount that corresponds to 1,1% of the cadastral value of the property if you are not an European citizen
Spanish lawyers specialized in property purchase often accompany foreign buyers on their journey to invest in seasonal rental properties. It is strongly recommended to save part of your acquisition budget to pay the fees of a professional who can guide you through this process, and help you put your property to rent.
Casa Botanic por Emerald Stay
Remember this…
Even with all the fees related to seasonal rental revenue, investing in a Costa Brava accommodation is still an interesting process with very high profitability. For the past years, Spain has been the second most visited country in the world. For that, the real estate market remains affordable, even in the most busy areas. Obviously, with such good numbers, investors can’t help but be seduced!
Owners in the Costa Brava: offer top-notch services to your guests
Do you already own a villa or apartment in Costa Brava, or is planning to invest soon in a luxury property? We can help you make your property more attractive in the eyes of your clients thanks to our complete seasonal rental management solution and private concierge services. The clientele you want to attract is the one with have the pleasure of serving on a daily basis in our rental properties in the French Alps, Mallorca and Costa Brava. By entrusting us with the management of your property, you will be able to provide the luxury hotel services that your guests expect.
Our rental management and private concierge services offer in Costa Brava
