What incidental taxes and fees apply to off-plan Costa del Sol properties?

When investing in off-plan properties on the Costa del Sol, several incidental taxes and fees contribute to the overall hidden costs. Firstly, there is Value Added Tax (IVA) on the purchase price of new-build properties, currently set at 10% in Spain. This is a significant cost often overlooked by buyers focusing solely on the advertised property price. Secondly, stamp duty (Impuesto de Actos Jurídicos Documentados or AJD) also applies to new-build purchases, typically ranging from 1.2% to 1.5% of the purchase price, depending on the autonomous region, which in this case is Andalusia. These taxes are paid on top of the property's value. Beyond taxes, you must account for legal fees. Engaging an independent lawyer is crucial for off-plan purchases to conduct due diligence, review contracts, and ensure compliance with Spanish law and safeguards, such as bank guarantees. Legal fees can range from 0.8% to 1.5% of the property value, plus 21% IVA on the legal service itself. Notary fees are another unavoidable expense when signing the public deed of sale. These are standardized and depend on the property's value, typically ranging from 0.2% to 0.5%. Following the notary, registration fees for entering your ownership into the Land Registry (Registro de la Propiedad) will also apply, usually between 0.1% and 0.25% of the property value. Finally, connection fees for utilities such as water and electricity, known as 'licencia de primera ocupación' (first occupation license) fees, are often borne by the buyer, as are charges for setting up community services in new developments, which can vary widely. It is prudent to budget an additional 12-15% of the property's purchase price to cover all these associated costs.