Why this article exists
Most content about buying property abroad reads like a travel brochure. Sunny terraces, passive income projections, "your dream villa awaits." What is consistently missing from these glossy narratives is an honest discussion of what goes wrong, what costs people forget to budget for, and which assumptions turn out to be dangerously naive when reality arrives.
This article is the opposite of a sales pitch. It documents ten pitfalls that Dutch residents encounter when buying property in Spain or Dubai, based on publicly available information, regulatory frameworks, and patterns that repeat in international property transactions year after year. These are not theoretical risks. They are patterns observed in real transactions, forums, legal disputes, and the experiences shared by Dutch buyers in expat communities across both markets.
If you walk away from this article feeling more cautious than when you started, it has done its job. Caution is not the enemy of action. Caution is what separates a well-executed purchase from a costly mistake.
Pitfall 1: Underestimating total buying costs
The listed price of a property is not what you pay. In both Spain and Dubai, buying costs add a significant percentage on top, and many buyers only discover the full picture after they have already signed a reservation contract.
Spain: 10-14% on top of the purchase price (as of Q1 2026)
A EUR 300,000 resale apartment on the Costa del Sol carries approximately EUR 30,000-42,000 in unavoidable acquisition costs:
- Transfer tax (ITP): 7% in Andalusia, 10% in Valencia and Catalonia, 6% in Madrid (as of Q1 2026). This single tax is the largest line item. For new-build properties, 10% IVA plus 0.5-1.5% stamp duty (AJD) applies instead.
- Notary fees: EUR 600-1,200 depending on the property price and deed complexity.
- Land Registry fees: EUR 400-700 for registration of the new deed.
- Legal fees: 1-1.5% of purchase price, minimum EUR 1,500. An independent lawyer is not optional; skipping legal representation is Pitfall 2.
- Mortgage arrangement fees (if financing): 0.5-1.5% of loan amount plus EUR 300-600 for a property appraisal (tasacion).
Concrete example: Jan and Petra from Rotterdam budget EUR 300,000 for a 2-bedroom apartment in Fuengirola. After adding 7% ITP (EUR 21,000), notary (EUR 800), registry (EUR 500), lawyer (EUR 3,500), and mortgage arrangement (EUR 2,100), the total is EUR 327,900. If they assumed 70% LTV, their mortgage covers EUR 210,000, leaving EUR 117,900 from own funds, not the EUR 90,000 they originally planned.
Dubai: 7-8% on top (as of Q1 2026)
A EUR 400,000 (approximately AED 1,600,000) apartment in Dubai Marina carries approximately EUR 28,000-32,000 in buying costs:
- DLD registration fee: 4% of purchase price, non-negotiable.
- Agency commission: 2% of purchase price, typically buyer's responsibility.
- Admin and registration fees: AED 2,000-4,000 depending on property type.
- Mortgage registration fee: 0.25% of loan amount if financing.
The mistake is universal: budgeting only for the purchase price and treating acquisition costs as a minor afterthought. These costs cannot be financed. They must come from savings. Underestimating them by even 3-4% on a EUR 300,000 purchase means EUR 9,000-12,000 you did not plan for.
The Zaminor cost calculator models total acquisition costs for both Spain and Dubai, including every line item, so there are no surprises after commitment.
Pitfall 2: Skipping independent legal representation
This is the single most dangerous shortcut a buyer can take, and it is alarmingly common. In both Spain and Dubai, it is standard practice for sellers, developers, or agents to offer "their" lawyer or legal department to handle the transaction. This creates a direct conflict of interest.
The seller's lawyer works for the seller. The developer's legal team works for the developer. Their objective is to close the deal, not to protect you from the deal's risks. Imagine asking the opposing team's coach to also coach your side. It does not work.
A cautionary pattern that repeats in Costa del Sol expat forums: a Dutch couple buys through a developer's recommended lawyer, who assures them everything is in order. Two years later, they discover the enclosed terrace (20m2 of their "100m2 apartment") was never permitted, cannot be registered in the Land Registry, and technically must be demolished. The developer's lawyer knew. Their independent lawyer would have caught this on the Nota Simple review, which takes 15 minutes.
An independent lawyer will:
- Request and review the Nota Simple (Land Registry extract) to verify ownership, boundaries, and encumbrances
- Check for illegal constructions by comparing the cadastral record against the physical property
- Review all contracts before you sign, flagging clauses that disadvantage you
- Verify the valor de referencia (minimum taxable base) to prevent tax surprises
- Confirm the community is debt-free (certificado de deuda cero)
- Handle NIE application, fiscal representation, and post-completion tax setup
Cost: 1-1.5% of purchase price in Spain (EUR 3,000-4,500 on a EUR 300,000 property). In Dubai: AED 5,000-15,000 for a standard transaction review. This is not a place to economize.
Pitfall 3: Not understanding Spain's multiple property valuations
Spain assigns multiple "values" to every property, and they are not interchangeable. Confusing them leads to unexpected tax bills and potential penalties.
- Valor catastral: The cadastral value, set by the Catastro. Typically 30-50% of market value. Used to calculate IBI (annual property tax) and imputed income for non-residents.
- Valor de referencia: Introduced in 2022 by the Spanish tax authorities. Calculated from notarized transaction data. This is the minimum taxable base for transfer tax (ITP) and inheritance tax. It is often higher than the valor catastral but may differ from your actual purchase price.
- Market value (valor de mercado): What you actually pay.
The pitfall operates in two directions. First: some buyers are told that the valor catastral represents the "official value" and assume their tax will be based on this low figure. Wrong. Transfer tax is assessed on the higher of the actual sale price or the valor de referencia. Second: for Dutch Box 3 declarations, the Belastingdienst requires the fair market value (waarde in het economisch verkeer), not the catastral value. Declaring the catastral value to Dutch tax authorities is incorrect and can trigger a correction with penalties and interest.
Before purchasing, verify the valor de referencia through the Sede Electronica del Catastro (free, online). If your agreed purchase price is below the valor de referencia, you may still be taxed on the higher reference value for transfer tax purposes.
Pitfall 4: Ignoring ongoing ownership costs
Purchase costs dominate pre-buying conversations, but ongoing annual costs determine whether the property is financially sustainable over years. Many buyers fail to model the full annual cost of ownership before committing.
Spain: typical annual costs for a non-resident owner
- IBI: EUR 300-1,500/year depending on municipality and cadastral value.
- Community fees: EUR 600-3,600/year (EUR 50-300/month). Luxury complexes with extensive facilities can exceed EUR 6,000/year.
- Non-resident income tax (IRNR): Even if the property sits empty, non-residents are taxed on imputed income of 1.1-2% of the cadastral value at 19% for EU residents (as of Q1 2026). This annual obligation catches many buyers off guard.
- Home insurance: EUR 200-600/year.
- Utilities: EUR 80-150/month even with minimal usage, because Spanish electricity contracts include a fixed power charge regardless of consumption.
- Basura (waste tax): EUR 50-200/year.
- Maintenance: Budget 1-2% of property value annually. A EUR 250,000 property: EUR 2,500-5,000/year.
Total annual running costs (excluding mortgage): EUR 4,000-10,000 for a mid-range Spanish property. That is EUR 333-833/month before you enjoy a single night in the property.
Dubai: typical annual costs
- Service charges: AED 10-30 per square foot per year (as of Q1 2026). A 1,000 sq ft apartment: AED 10,000-30,000/year (EUR 2,500-7,500).
- DEWA housing fee: 5% of annual rental value per the RERA rental index (as of Q1 2026), charged through utility bills.
- Insurance: Building insurance typically included in service charges. Contents insurance: AED 1,000-3,000/year.
- Maintenance reserve: Some communities charge additional sinking fund contributions.
- Chiller fees: In some developments, district cooling (chiller) charges are separate from service charges and can add AED 5,000-15,000/year.
A common error: adding up only the mortgage payment and treating everything else as "minor." For a mid-range property in either market, annual running costs excluding the mortgage can easily equal 2-4% of the property's value.
Pitfall 5: Currency risk with Dubai purchases
The UAE dirham (AED) is pegged to the US dollar at approximately AED 3.6725 per USD. This peg has held since 1997, backed by substantial UAE central bank reserves, and is considered stable. But that stability is against the dollar, not against the euro.
As a Dutch buyer, your income, savings, and financial life are denominated in euros. Your actual currency exposure is EUR/USD. When the dollar strengthens against the euro, your Dubai property becomes more expensive to own in euro terms. When it weakens, less expensive.
The historical volatility is significant:
- January 2021: EUR 1 = approximately USD 1.22
- September 2022: EUR 1 = approximately USD 0.96 (below parity)
- Early 2026: EUR 1 = approximately USD 1.08 (as of Q1 2026)
That is a 27% swing in the euro cost of dollar-denominated assets over just 20 months (2021-2022), entirely independent of whether the AED property price changed. A Dutch buyer who purchased at EUR/USD 1.22 and faced payments at EUR/USD 0.96 saw their property's effective euro cost increase by roughly 27% due to currency movement alone.
This risk is continuous, not one-time. Every service charge payment, every mortgage installment, every maintenance invoice in AED fluctuates in euro terms. There is no natural hedge unless you also earn income in USD or AED. Spain, as a eurozone country, carries zero currency risk for Dutch buyers.
Pitfall 6: Assuming rental income will cover all costs
The assumption that "the rent will pay for everything" is one of the most persistent and expensive beliefs in international property buying. The math almost never works as cleanly as the developer brochure implies.
What the projection typically looks like
A developer or agent presents a gross rental yield of 6-8% and implies this covers mortgage, service charges, and leaves profit. Here is what is typically excluded from that rosy projection:
- Vacancy: Even popular tourist areas have seasonal demand patterns. A Costa del Sol apartment achieves strong occupancy May-September but may sit empty November-March. Realistic annual occupancy for a well-managed short-term rental: 55-70%, not 90-100%.
- Management fees: If you live in the Netherlands, you need local property management. Short-term rental management: 15-25% of gross rental income. Long-term rental management: 8-12%.
- Cleaning and turnover: Each guest changeover costs EUR 40-100 in a standard apartment. During high season with weekly turnovers, this accumulates rapidly.
- Maintenance and repairs: Rental properties suffer faster wear than owner-occupied properties. Budget 1-2% of property value annually.
- Taxes: In Spain, non-resident landlords pay 19% on net rental income (as of Q1 2026, EU residents). Dubai has no rental income tax, but the 5% DEWA housing fee and service charges still apply.
- Platform commissions: Airbnb charges hosts 3% per booking. Booking.com charges 15-18%. These commissions come off the top before any other deduction.
- Tourist license: In many Spanish regions, operating without a licencia turistica is illegal and subject to fines of EUR 3,000-30,000+. Several communities have frozen new license issuance. Verify license availability before purchasing with rental intent.
Realistic net yield after all costs, taxes, vacancy, and management: 2-4% for a well-managed property in Spain, 4-6% in Dubai. For many properties, rental income covers part of the ownership costs but not all. Treating projected gross yield as guaranteed net income is a pitfall that has caused significant financial strain.
Pitfall 7: Not checking the property's legal status
A property can look perfect during a viewing trip and be a legal disaster on paper. Both Spain and Dubai have specific risks that demand investigation before any financial commitment.
Spain: what can go wrong on paper
The Nota Simple reveals all: This Land Registry extract costs approximately EUR 10 and can be obtained online through the Colegio de Registradores (registradores.org). It shows ownership, boundaries, surface area, and every encumbrance: mortgages, embargos, liens, usufruct rights, and other charges. Never commit to any property without reviewing a current Nota Simple.
A pattern that repeats across the Spanish coast: a Dutch buyer finds a charming renovated finca with a stunning pool and guest house. The main house is properly registered at 120m2. But the guest house (50m2) and pool do not appear on the Nota Simple because they were built without a licencia de obra. Legally, they do not exist. They cannot be insured, they affect the property's resale value, and in worst cases, a municipality can issue a demolition order, even decades after construction.
Other legal risks in Spain:
- Urban planning classification: Verify the property's classification in the local PGOU (Plan General de Ordenacion Urbanistica). Land classified as rustico (rural) or no urbanizable has severe building restrictions. Properties built on protected land have been subject to demolition orders.
- Community debts: Outstanding community fee debts attach to the property, not the person. If the seller owes EUR 5,000 in unpaid community fees, those become your debt upon purchase unless cleared before completion.
- Valor de referencia discrepancy: If the purchase price is significantly below the valor de referencia, the tax authority may assess additional transfer tax based on the higher figure.
Dubai: what can go wrong on paper
- Developer track record: For off-plan purchases, research the developer's completion history. Has the developer delivered previous projects on time? Are there complaints registered with RERA? A delayed or cancelled project can tie up your deposit for years.
- Title deed verification: Confirm the title deed (mulkiya) through the Dubai Land Department. Ensure the seller is the registered owner and no mortgages or disputes are recorded.
- Escrow account verification: For off-plan, all payments must go into a RERA-registered escrow account. Payments made outside escrow are unprotected. Verify escrow registration at dubailand.gov.ae before transferring any funds.
- Sub-community rules: Master developers set overarching rules, but sub-communities may impose additional restrictions on short-term rentals, modifications, or pet ownership that affect your plans.
Pitfall 8: Overestimating mortgage eligibility
Headlines say "70% LTV available for non-residents in Spain" and "75% LTV in Dubai." The fine print paints a different picture.
The Spain reality check
Spanish banks offer non-residents 60-70% LTV (as of Q1 2026). But the 10-14% buying costs are not financeable. They must come from savings.
For a EUR 350,000 property with 70% LTV:
- Mortgage: EUR 245,000
- Own funds for deposit: EUR 105,000
- Own funds for buying costs (~12%): EUR 42,000
- Total own funds: EUR 147,000 (42% of purchase price)
Additional constraints: the bank's debt-to-income limit of 35-40% includes your existing Dutch mortgage, car loans, and any other obligations. A Dutch family paying EUR 1,200/month on their Dutch mortgage with combined net income of EUR 5,000 has only EUR 800-1,000/month of borrowing capacity left for the Spanish mortgage, regardless of the property's value. Self-employed applicants face additional scrutiny and may receive 50-60% LTV rather than 70%.
The Dubai reality check
UAE banks offer non-residents 50-75% LTV depending on property value and buyer profile (as of Q1 2026). Properties above AED 5M typically have lower maximum LTV. The debt burden ratio cap of 50% of net income applies to all debts globally. Age restrictions limit the maximum term so the mortgage ends before the borrower reaches 65-70. And the currency factor: if your income is in EUR but the mortgage is in AED, the bank may apply a stress-test buffer that effectively reduces your borrowing capacity by 10-15%.
Pitfall 9: Forgetting about Dutch tax obligations
Buying property abroad does not remove you from the Dutch tax system. It adds to your reporting obligations.
Box 3 impact
Foreign property is declared in Box 3 of the Dutch income tax return (aangifte inkomstenbelasting). The net value (market value minus outstanding mortgage) is included in your worldwide asset calculation. For 2026 (as of Q1 2026):
- Deemed return on "other assets" (including foreign real estate): 6.00%
- Box 3 tax rate: 36%
- Effective tax: 36% x 6.00% = 2.16% of net property value above the tax-free threshold of EUR 59,357 per person (EUR 118,714 for fiscal partners).
Example: a Dutch single person owns a Spanish apartment with a market value of EUR 300,000 and no mortgage. Net value above threshold: EUR 300,000 - EUR 59,357 = EUR 240,643. Annual Box 3 tax: EUR 240,643 x 2.16% = approximately EUR 5,198. Every year. Regardless of whether the property generates any income.
Double taxation relief differs by market
For Spanish property, the Netherlands-Spain double taxation treaty provides relief through the proportional exemption method (voorkoming dubbele belasting). You still declare the property in Box 3, but the Dutch tax attributable to the Spanish portion is reduced. This relief is not automatic. You must claim it on your tax return.
For Dubai property, no equivalent treaty relief exists for wealth/asset tax. The UAE levies no property tax, income tax, or wealth tax. This means the full Dutch Box 3 tax applies without any foreign tax credit or exemption. The effective annual cost of Dubai property ownership for a Dutch tax resident is therefore higher by this Box 3 amount compared to Spanish property of equivalent value.
Spanish IRNR is a separate obligation
Non-resident income tax (IRNR) in Spain is separate from Dutch Box 3. You pay both: Spanish IRNR on imputed or actual rental income, and Dutch Box 3 on the property's value. These are different tax bases. The double taxation treaty addresses the overlap, but filing obligations exist in both jurisdictions. Failure to file IRNR in Spain can result in penalties and complications when selling, as the buyer is required to withhold 3% of the sale price as a retention against unpaid non-resident taxes.
Pitfall 10: Buying emotionally instead of doing due diligence
This is the meta-pitfall that enables all the others. Property viewings abroad happen during short trips where the sun is shining, the sangria is flowing, the agent is charming, and everything feels like a holiday. This emotional state is the worst possible condition for making a six-figure financial decision.
Recognizable patterns of emotional buying:
- "We need to decide today, another buyer is interested." The oldest sales pressure tactic. A legitimate property will survive 48 hours of due diligence. If it truly sells to someone else, there will be another property. There is always another property.
- Signing a reservation contract during the viewing trip. Reservation deposits (EUR 3,000-10,000 in Spain, AED 10,000-50,000 in Dubai) are typically non-refundable if you withdraw without a contractual escape clause. Signing before your independent lawyer has reviewed the contract and checked the property's legal status is a substantial risk.
- Falling in love with the property and rationalizing red flags. "The illegal terrace probably won't be an issue." "The community fee seems high but we'll manage." "The crack in the wall is just cosmetic." Emotional attachment reduces rational risk assessment.
- Comparing to Dutch prices and feeling it is cheap. A EUR 250,000 apartment on the Costa Blanca seems like a bargain compared to a similar apartment in Amsterdam at EUR 500,000. But the total cost of ownership, including travel, maintenance, management, taxes, vacancy, and carrying costs, changes the economic equation substantially. Price anchoring to Dutch property values is a cognitive bias, not a financial analysis.
How to protect yourself: a factual checklist
The pitfalls above are avoidable with preparation and discipline. The following steps describe protective measures that experienced international property buyers typically employ.
Before viewing
- Engage an independent lawyer before you view properties, not after you have fallen in love with one. Choose a lawyer who is licensed in the relevant country and experienced with Dutch clients.
- Complete a financial pre-assessment including all buying costs, ongoing costs, and tax obligations. The Zaminor calculator provides this framework for both Spain and Dubai.
- Research areas independently through expat forums, local news, and negative reviews, not just agent-curated information.
During the transaction
- Request a Nota Simple (Spain) from the Colegio de Registradores. Cost: approximately EUR 10. It reveals everything material about the property's legal status.
- Verify RERA registration (Dubai) for off-plan projects and confirm all payments route through a registered escrow account.
- Never sign contracts in a language you do not fully understand without your lawyer's review and explanation.
- Verify the valor de referencia (Spain) through the Sede Electronica del Catastro.
- Commission a structural survey for resale properties (EUR 300-800 in Spain). A professional inspection can reveal defects invisible during a standard viewing.
After purchase
- Set up tax filings in both jurisdictions. In Spain: annual IRNR filing through a fiscal representative or the AEAT online portal. In the Netherlands: declare the property in Box 3 and claim double taxation relief where applicable.
- Maintain a reserve of at least 3-5% of property value for unexpected repairs, legal issues, or cost increases.
- Review insurance coverage for location-specific risks: flood zones in Spain, sand/wind damage in Dubai, and adequate liability coverage.
For detailed market-specific guidance, see the Spain market guide, the Dubai market guide, or compare both markets side by side on the platform.
See also: Dutch Land Registry (Kadaster), European Central Bank.
Frequently asked questions
What is the single most important thing a Dutch buyer can do to protect themselves?
Engage an independent lawyer before viewing properties. A qualified lawyer who works exclusively for you, with experience in both the local property market and Dutch tax implications, prevents or mitigates nearly every pitfall listed in this article. The cost (1-1.5% of purchase price) is insignificant relative to the financial exposure of an unprotected transaction.
Are there specific Dutch tax advisors who specialize in foreign property?
Yes. Several Dutch tax advisory firms specialize in international property taxation, particularly the Netherlands-Spain corridor. They handle Box 3 declarations, double taxation treaty applications, and coordination with Spanish fiscal representatives. Your Spanish lawyer can typically recommend one, or search through the Register Belastingadviseurs (RB) for specialists in "internationaal belastingrecht."
Can I avoid Box 3 tax by putting the property in a company name?
Potentially, but the tax treatment of property held through a company (BV or foreign equivalent) is different and not necessarily more favorable. Corporate structures introduce corporate income tax, dividend withholding, substance requirements, and administrative overhead. The net benefit depends entirely on property value, rental income, personal tax situation, and long-term plans. This is a decision that requires specialized tax advice for your specific circumstances, not a generic strategy applied from internet articles.
How often do Dutch buyers actually encounter these pitfalls?
Frequently enough that every Dutch-speaking legal practice along the Spanish coast deals with them regularly. The most common are Pitfall 1 (underestimated costs), Pitfall 4 (ignored ongoing costs), Pitfall 6 (optimistic rental projections), and Pitfall 10 (emotional buying). Pitfalls 2 and 7 (no independent lawyer, unchecked legal status) produce the most expensive consequences when they occur.
Is it riskier to buy in Dubai or Spain?
Each market carries different risk profiles rather than "more" or "less" risk overall. Spain's risks are primarily bureaucratic: complex tax layers, regional regulatory variation, and the prevalence of unpermitted construction along the coast. Dubai's risks are primarily financial: currency exposure, developer delivery risk for off-plan, and higher market volatility with boom-bust cycles. Both risks are manageable with professional guidance. The unmanageable risk in either market is buying without due diligence.
Disclaimer: This article is for informational purposes only and does not constitute financial, legal, or tax advice. Tax rates, regulations, and fees mentioned are accurate as of Q1 2026. Always consult a qualified professional before making property purchase decisions.