Relocating to a New-Build in Mijas for German Expats: A Practical Guide

Discovering Your New Home in Mijas: A Guide for German Expats

Mijas, nestled in the heart of the Costa del Sol, offers an enchanting blend of traditional Andalusian charm and modern amenities, making it an increasingly popular destination for foreign buyers, particularly German expats. The allure of Mijas extends from its picturesque white-washed villages to its vibrant coastal areas, complemented by a welcoming climate and a burgeoning new-build property market. For those seeking a contemporary lifestyle combined with Spanish authenticity, a new-build property in Mijas presents an ideal opportunity. This guide is designed to navigate German citizens through the practicalities of purchasing a new-build home and relocating to this beautiful part of Andalusia.

Navigating the Spanish Property Purchase Process

Acquiring a new-build (obra nueva) property in Spain involves a structured legal process. Engaging an independent, specialised lawyer from the outset is highly recommended to protect your interests and ensure compliance with Spanish law. The general steps for purchasing a new-build property are:

1. Obtaining a Número de Identificación de Extranjero (NIE): Your NIE is a personal, unique, and sequential identification number essential for all legal and financial transactions in Spain, including buying property, opening a bank account, and signing utility contracts. German citizens can apply for an NIE in Spain at an Oficina de Extranjería or police station, or via a Spanish consulate in Germany. The application requires Form EX-15 and payment of the associated fee (Modelo 790, Código 012).
2. Opening a Spanish Bank Account: A local bank account is necessary for managing payments related to the property purchase and ongoing expenses.
3. Reservation Contract (Contrato de Reserva): This initial agreement secures the property for a short period, typically 15-30 days, while due diligence is conducted. A reservation fee, usually a small percentage of the purchase price, is paid.
4. Private Purchase Contract (Contrato Privado de Compraventa): Signed after the reservation period, this contract commits both the buyer and developer to the sale. It outlines the property details, price, payment schedule (including stage payments for off-plan properties), and completion date. It is common to pay 10-30% of the purchase price at this stage, minus the reservation fee. For new-builds, all payments made before completion must be guaranteed by the developer, either through a bank guarantee or insurance policy, to protect the buyer’s investment in case the development is not completed.
5. Public Deed of Sale (Escritura Pública de Compraventa): This is the formal transfer of ownership, signed before a Notary Public. The remaining balance of the purchase price, along with associated taxes and fees, is paid at this stage.
6. Property Registration: Your lawyer will arrange for the Public Deed to be registered at the Land Registry (Registro de la Propiedad) in your name.

For off-plan properties, it is crucial to verify that the developer holds all necessary licences, including the building permit (Licencia de Obras) and the first occupation licence (Licencia de Primera Ocupación) upon completion.

Understanding Property Taxes and Fees for New-Builds

When purchasing a new-build property in Mijas, foreign buyers must account for several taxes and associated costs:

• Value Added Tax (IVA): For new-build properties, IVA is applied at a rate of 10% of the purchase price in Andalusia. This also applies to garages (up to two per dwelling) and annexes sold with the property. For officially protected housing (VPO), a reduced rate of 4% may apply.
• Stamp Duty (Impuesto sobre Actos Jurídicos Documentados – AJD): In Andalusia, the AJD rate for new-build properties is 1.2% of the purchase price. This tax is levied on public deeds and documents that are registered in the Land Registry.
• Notary Fees: These are regulated fees for the Notary Public’s services in preparing and witnessing the Public Deed of Sale.
• Land Registry Fees: Fees for registering the property in your name at the Land Registry.
• Legal Fees: Typically 1% to 1.5% of the purchase price, plus IVA, for your lawyer’s services.

Ongoing Property Ownership Taxes

Once you own a property in Mijas, you will be subject to annual taxes:

• Council Tax (Impuesto sobre Bienes Inmuebles – IBI): This is a local municipal tax based on the cadastral value of the property. In Mijas, the urban IBI rate is 0.483% of the cadastral value. Payment periods are generally set by the local council, with the voluntary payment period often extending until 20th November. Owners can register for IBI with the Mijas Town Hall’s Catastro-IBI Department.
• Non-Resident Income Tax (Impuesto sobre la Renta de No Residentes – IRNR): As a non-resident owner, you are liable for IRNR on any income generated from your Spanish property (e.g., rental income). Even if the property is not rented out, the Spanish tax authorities impute a notional income, which is also subject to IRNR. German expats typically declare this via Modelo 210. For rental income, the declaration is now annual, submitted between 1st and 20th January for the previous year’s income.
• Wealth Tax (Impuesto sobre el Patrimonio): This is a state tax, though often managed by autonomous communities. It applies to net wealth exceeding certain thresholds. Andalusia has historically applied this tax, but exemptions and thresholds can vary.
• Rubbish Collection and Other Local Taxes: Municipal fees for services such as waste collection.

It is important to note that the 3% retention mentioned in Spanish tax law applies when a non-resident sells a property. In such a scenario, the buyer is legally obliged to withhold 3% of the purchase price and pay it to the Spanish tax authorities as an advance payment on the seller’s capital gains tax. While this is primarily a seller’s obligation, buyers of property from non-residents must be aware of their role in this withholding process. Similarly, Plusvalía Municipal (Impuesto sobre el Incremento de Valor de los Terrenos de Naturaleza Urbana – IIVTNU) is a municipal tax on the increase in value of urban land upon transfer. While it is typically paid by the seller, if the seller is a non-resident individual, the buyer may become liable for this tax.

Financing Your New-Build in Mijas

Many German expats opt for a mortgage to finance their property purchase in Spain. Spanish banks generally offer mortgages to non-residents, though the terms may differ from those for residents. Typically, non-resident buyers can obtain a loan-to-value (LTV) ratio of 60-70% of the property’s valuation or purchase price, whichever is lower. This means you should plan to have a down payment of at least 30-40%, plus an additional 10-15% to cover all associated purchasing taxes and fees. Banks will assess your financial stability and income in Germany when considering your mortgage application.

Relocating to Mijas: Key Considerations for German Citizens

As German citizens are part of the European Union, the relocation process to Spain is significantly streamlined compared to non-EU citizens. However, certain administrative steps are mandatory:

• Residency Registration: If you plan to stay in Spain for more than 90 days, you are required to register your residency. This involves applying for the Certificado de Registro de Ciudadano de la Unión Europea (Certificate of Registration as an EU Citizen). This certificate is obtained at an Oficina de Extranjería or designated police station in your area of residence. You will need to complete Form EX-18, present your valid passport or national identity card, and provide proof of financial means and healthcare coverage (e.g., European Health Insurance Card, private health insurance, or proof of employment/self-employment in Spain). A fee (Modelo 790, Código 012) is also payable.
• Healthcare: As an EU citizen, your European Health Insurance Card (EHIC) provides access to necessary state-provided healthcare during temporary stays. For permanent residency, you should register with the Spanish public health system (if you are working or self-employed in Spain and contributing to social security) or secure private health insurance that meets the Spanish requirements for non-working residents.
• Driving Licence: Your German driving licence is valid in Spain. However, if you become a resident, it is advisable to register it with the Spanish traffic authority (DGT) and eventually exchange it for a Spanish licence.
• Education: Mijas offers a range of schooling options, including Spanish public schools, private Spanish schools, and international schools following British or other curricula.

Embracing Life on the Costa del Sol

Mijas offers an exceptional quality of life, whether you prefer the tranquil mountain setting of Mijas Pueblo or the bustling coastal vibe of La Cala de Mijas and Fuengirola (within the Mijas municipality). The region boasts world-class golf courses, beautiful beaches, and a rich cultural calendar. The developments we recommend are strategically located to provide easy access to all these amenities, offering modern living spaces designed to maximise the natural beauty and Mediterranean lifestyle of the Costa del Sol. Integrating into the local community can be facilitated by learning some Spanish, participating in local events, and exploring the many expat groups in the area.

Relocating to Mijas and purchasing a new-build property as a German expat is an exciting venture. By understanding the legal, tax, and administrative requirements outlined in this guide, you can ensure a smooth and successful transition to your new life in the sun. We are dedicated to helping you find the perfect new-build home that meets your lifestyle aspirations in this stunning corner of Andalusia.