Real Estate Investor Guide
Costa del Sol, Andalusia, Spain — The Complete 2026 Investment Guide
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REAL ESTATE INVESTOR'S GUIDE
Costa del Sol, Andalusia, Spain
Complete Investment Guide 2026: strategies, returns, taxes, legislation
Updated: March 2026
Why the Costa del Sol is the investment case of 2026
The Costa del Sol has passed the point of no return. From a seasonal holiday destination, it has transformed into a global hub for permanent residence, remote working and long-term capital preservation — with a stable international buyer base and a structural supply shortage that shows no signs of disappearing in the coming years.
Unlike many European markets, the Costa del Sol offers a rare combination: high rental yields + long-term capital appreciation + a world-class quality of life. This makes the region attractive to four fundamentally different types of investment capital — and it is precisely this diversification that ensures the market’s stability.
| Investment objective | Suitable segment | Expected return |
|---|---|---|
| Maximum rental income (short-term) | Seaside apartments: Estepona, Mijas, Fuengirola; Nueva Andalucía | Gross: 8–12% / Net: 4–6% (after expenses and taxes) |
| Stable passive income (long-term rental) | Residential apartments in Málaga, Fuengirola, Benalmádena | Gross: 5–7% / Net: 3–5% |
| Capital appreciation | Villas and new-builds: Marbella, Benahavís, Estepona (New Golden Mile) | Projected growth: 5–9% per annum in prime locations |
| Capital preservation (inflation hedge) | Ultra-premium: La Zagaleta, Sierra Blanca, Cascada de Camoján | Low liquidity, but protection against depreciation — historically a safe-haven asset |
| Flipping (buy → renovate → sell) | Properties up to €500,000 with potential for improvement (2026 restrictions) | Target return: 15–30% over 18–24 months with the right choice of property |
The market in figures: 2026 analysis
Investment decisions require data, not emotions — below are the key market indicators that define the investment climate on the Costa del Sol in 2026.
| Indicator | Value (2026) | Investment conclusion |
|---|---|---|
| Average price in Marbella | €5,258/sq m (all-time high) | Seller’s market; shortage of high-quality supply intensifying |
| Price growth in Málaga (quarter-on-quarter) | +13.4% year-on-year (Q4 2025) | One of the fastest-growing markets in the EU — fundamental, not speculative |
| Growth in Estepona (year-on-year) | +15–17.4% | Best ‘entry price/growth potential’ ratio on the coast |
| Decline in property stock | –20% year-on-year | Supply shortage = structural support for prices |
| Share of new-builds in sales | less than 8% (Marbella) | Strict land restrictions rule out overproduction |
| Proportion of foreign buyers | >63% (Malaga province); up to 87% in prime Marbella | International demand is not dependent on the Spanish economy |
| Proportion of cash transactions | 40–45% (Malaga province) | The market is not dependent on ECB rates or mortgage availability |
| Gross yield on short-term rentals | 7–14% depending on location and management | Highest figures among European holiday markets |
| Long-term rental yield | 5–7% gross, 3–5% net | Stable passive income base all year round |
Investment map: micro-locations and their potential
The Costa del Sol is not a single market, but a collection of micro-markets with their own dynamics. Choosing the right location for a specific strategy is half the battle when it comes to investment success.
The Golden Triangle: Marbella, Benahavís, Estepona
Marbella — the capital of European luxury
Marbella remains the global benchmark for premium resort property. The Golden Mile, Puerto Banús, Sierra Blanca and Nueva Andalucía are not just addresses; they are financially stable ecosystems with their own infrastructure and buyer base.
- The Golden Mile: villas from €3–15 million; the iconic Puente Romano and Marbella Club hotels guarantee a constant flow of high-end visitors
- Sierra Blanca: mountain villas with panoramic views, €2–8 million; historically high liquidity on resale
- Nueva Andalucía (‘Golf Valley’): apartments €350,000–1,500,000; net rental yield 5–7%; ideal for a combination of owner-occupation and letting
- Nueva Andalucía + Puerto Banús: apartments with views of the yachts, €400,000–2,000,000; high tourist traffic, premium rental market
| Sub-area | Price range | Best strategy | Growth potential 2026–2028 |
|---|---|---|---|
| Golden Mile | €5,000–15,000/sq m | Capital preservation + luxury rental | ★★★★☆ Stable 5–7% per annum |
| Sierra Blanca | €4,500–10,000 per square metre | Capital preservation + resale | ★★★★☆ Stable 6–8% per annum |
| Nueva Andalucía | €3,500–7,000/sq m | Rental + owner-occupied | ★★★★★ Active 7–10%/year |
| Puerto Banús / Beach | €5,000–12,000/sq m | Short-term rental | ★★★★☆ Stable 6–8%/year |
Benahavís — ultimate privacy and zero compromises
Benahavís is synonymous with absolute privacy and ultra-luxury. The municipality has one of the lowest IBI rates on the coast, is funded by the region’s wealthiest taxpayers and offers infrastructure of impeccable quality.
- La Zagaleta: Europe’s most exclusive residential community; villas €10–30+ million; helipads, private golf clubs; liquidity — only among UHNWIs
- El Madroñal, Los Flamingos: mountain villas €2–8 million; panoramic sea views; IBI lower than in Marbella
- Investment rationale: Benahavís does not generate high rental yields — it preserves capital in assets that are best protected against volatility
Estepona — best ‘entry price/growth potential’ ratio
Estepona is undergoing the most dynamic transformation on the coast: aggressive infrastructure upgrades, new coastal developments, modern residential complexes. It is an investment hotspot for those seeking capital appreciation with a more affordable entry threshold.
- New Golden Mile: apartments €300,000–900,000; new-build Class A properties; growth +15–17% year-on-year
- Atalaya, Cancelada, El Paraíso: modern villas €600,000–2,500,000; a growing rental market among German and Scandinavian buyers
- Strategy: off-plan purchase + letting = maximising growth potential
Traditional coast: Mijas, Fuengirola, Benalmadena
This is the area with the highest transaction activity and the best rental yield figures among European buyers in the mid-market segment. Direct rail link to Málaga Airport, well-established Scandinavian and Polish communities, diverse infrastructure.
| Location | Entry price (apartment) | Rental yield | Investor profile |
|---|---|---|---|
| Mijas-Costa / La Cala | €180,000–600,000 | Short-term: 7–9% gross | Rental investors on a limited budget; Scandinavians |
| Fuengirola | €150,000–500,000 | Long-term: 5–6% gross | Long-term rental investors; Scandinavian expats |
| Benalmadena | €160,000–550,000 | Short-term: 6–8% gross | Polish and German buyers; proximity to the airport |
| Malaga City | €200,000–700,000 | Long-term: 5–7% gross | Investors in long-term rentals; young professionals |
Four investment strategies: choose yours
Strategy 1: Short-term tourist rentals (VFT)
Short-term rentals are the most profitable strategy on the Costa del Sol, but also the most heavily regulated. When managed correctly, seaside properties in Estepona, Mijas and Nueva Andalucía yield a gross return of 8–12%.
| Parameter | Details for investors |
|---|---|
| Target locations | Nueva Andalucía (Puerto Banús), Estepona (coastal area), Mijas-Costa, Torremolinos, Nerja |
| Entry price range | €200,000–800,000 for apartments; €600,000–2,000,000 for villas |
| Gross yield | 8–12% in prime areas; 5–8% in standard locations |
| Net yield | 4–6% after: taxes, utility bills, management fees (15–20% of revenue), repairs |
| Seasonality | Peak: June–September (30–40% of annual revenue). Extended season: April–October. Off-season periods are covered by long-term tenants |
| Mandatory requirement | Valid VFT licence (or purchase of a property with a transferable licence) |
| Management | Professional management company: 15–20% of revenue; includes Airbnb/Booking management, cleaning, and guest services |
Strategy 2: Long-term rental (Buy-to-Let)
A more relaxed, predictable strategy with less regulatory burden. Particularly relevant in municipalities with a moratorium on VFT and in urban locations with high demand among expats and remote workers.
- Target locations: Malaga City, Fuengirola, Benalmadena, Torremolinos
- Gross yield: 5–7%; net: 3–5% after tax and expenses
- Demand: stable year-round — expats, remote workers, retirees, students at Malaga’s universities
- Taxes: EU/EEA residents — 19% on net income (with the right to deduct expenses); non-EU residents — 24% on gross income
- Advantages: minimal wear and tear, lower operating costs, predictable cash flows
Strategy 3: Off-plan purchase
Buying off-plan is an option for investors willing to wait 12–36 months until completion in exchange for a significant discount on the market price and potential for growth during the construction period. In the Costa del Sol market, where new-builds account for less than 8% of sales, a high-quality off-plan property is a scarce asset.
| Aspect | Details |
|---|---|
| Growth potential | Buying at the start of sales = 5–15% discount on the final market price; growth during the construction period: 10–20% in prime areas |
| Payment schedule | Typically: 20–30% upon signing the contract, 10–20% during construction (in stages), balance upon handover |
| Mandatory protection | Bank guarantee (Aval Bancario) for all payments — insist on this before signing; without it, the investment is unprotected |
| Taxation on purchase | VAT 10% + AJD 1.2% = ~11.2% (instead of ITP 7%) — please factor this into your model |
| Risk of delay | Realistic buffer: 6–12 months from the stated completion date. Include penalties for delays in the contract |
| Tax advantage | New-build properties are NOT subject to the proposed 100% tax for non-EU buyers — a strategic alternative for citizens of Ukraine, Kazakhstan and the UK |
Strategy 4: Flipping — buying, renovating, selling
Flipping is an aggressive strategy with high potential, but following changes to Andalusian legislation in 2026, its economics have changed radically. The legislation on the preferential 2% ITP rate for professional investors has been retained, but with two strict new conditions.
| Parameter until 01/01/2026 | Parameter after 1 January 2026 | Practical effect |
|---|---|---|
| ITP 2% — no value limit | ITP 2% — only up to €500,000 | Flipping in Marbella (villas €800K+) is subject to 7% ITP = financial loss |
| Resale period — 5 years | Resale period — 2 years | Strict deadline for renovation and sale; suitable for quick projects |
| Best properties: across the entire price range | Best properties: flats up to €400,000 in Estepona, Mijas, Torremolinos | Shift in flipping towards more budget-friendly sub-markets |
Tax structure for investors in Andalusia
Andalusia is one of the most tax-attractive jurisdictions for property investment in Spain and Europe. Understanding the tax structure before purchasing allows you to structure the transaction optimally and avoid unexpected costs.
Transaction taxes on purchase: ‘The Andalusian Advantage’
| Tax | Secondary market | New-build (off-plan) | Note |
|---|---|---|---|
| ITP (transfer tax) | 7% — Andalusia’s flat rate | Not applicable | Significantly lower than Catalonia (10%), Valencia (10–11%) and the Balearic Islands (10%) |
| IVA (VAT) | Not applicable | 10% | Standard rate for residential property |
| AJD (stamp duty) | 1.2% for mortgages / 0% for cash purchases | 1.2% | For new-build properties — always; for the secondary market — only with a mortgage |
| Notary + land registry | ~0.5–1% | ~0.5–1% | Standard fees |
| Legal support | ~1% | ~1% | Independent solicitor — mandatory |
| TOTAL in addition to the price | ~10–11% | ~12.2–13% | Always factor 13% into your investment model |
Income from rental property tax (IRNR)
| Non-resident status | Rate | Tax base | Frequency |
|---|---|---|---|
| EU/EEA resident (Poland, Germany, Norway, etc.) | 19% | Net income — with the right to deduct expenses (mortgage interest, repairs, management, depreciation) | Quarterly — Form 210 |
| Non-EU non-resident (Ukraine, Kazakhstan, UK, USA) | 24% | Gross rental income — no deduction of expenses | Quarterly — Form 210 |
| Tax resident of Spain (183+ days/year) | Progressive IRPF 19–47% | Net income; all deductions available | Annual IRPF return |
Capital Gains Tax (CGT)
When a property is sold at a profit, there is an obligation to pay capital gains tax. The basis for calculation is the sale price minus all documented expenses related to the purchase and capital improvements.
| Investor category | CGT rate (2026) | Note |
|---|---|---|
| Spanish tax resident | Progressive IRPF: 19% (up to €6K) → 21% (€6–50K) → 23% (€50–200K) → 28% (>€300K) | Exemption upon reinvestment in a new primary residence |
| Non-resident of the EU/EEA (Poland, etc.) | 19% flat rate on net profit | Entitlement to deduct purchase and improvement costs |
| Non-EU resident (Ukraine, Kazakhstan, UK) | 24% flat rate on net profit | Also 24%; a double taxation agreement may reduce the final tax burden |
Key legislative changes in 2026
100% tax for non-EU buyers: the current situation
The proposal to introduce an additional 100% tax for buyers from non-EU countries became the most discussed topic in the market in 2025–2026. It is essential to clearly distinguish rumours from facts.
| Question | Answer (March 2026) |
|---|---|
| Has the law been passed? | NO. It has not been passed and has not been put forward for debate. It remains a bill. |
| What does it apply to? | Only the resale market. New-build and off-plan properties are EXEMPT — they are subject to VAT, not ITP. |
| Who is exempt? | EU/EEA citizens are completely excluded from the scope of the legislation. Non-EU residents with a residence permit in Spain are presumably excluded as well. |
| Constitutional risks? | YES — most lawyers point to a conflict between Article 31.1 (prohibition of confiscatory taxation), Article 33 (right to private property) and Article 63 of the TFEU (free movement of capital). |
| Realistic outlook? | Most experts consider adoption in its current form unlikely. A watered-down version (10–20%) is possible as a compromise option . |
VFT licensing: new rules for 2025–2026
Regulation of holiday rentals has undergone fundamental changes. For investors considering short-term rentals, understanding these changes is critical.
| Change | Date | Practical implications for investors |
|---|---|---|
| Mandatory community consent (3/5 votes) | April 2025 | For NEW licences in multi-occupancy buildings, 60% of owners’ votes are required. Properties with an existing licence are not affected. |
| National Register NRUA | July 2025 | All tourist properties must have an NRUA number; Airbnb/Booking will remove listings without registration. |
| Moratorium on VFT in Málaga City | August 2025 | No new licences are being issued in the municipality of Málaga. Purchase a property with a valid licence or choose other municipalities. |
| The VFT licence is transferred with the property | Permanent rule | Buying a property with a valid VFT licence = getting the licence as a bonus; no new community consent is required. |
Energy Performance Certificate (EPC): an investment factor for the future
EU climate directives are transforming energy efficiency from a marketing selling point into a legal requirement and a financial risk.
- By 2030: all existing residential properties must have an EPC rating of at least ‘E’ to be legally sold or let
- By 2033: the threshold will be tightened to energy efficiency class ‘D’
- Properties rated F/G (the majority of the secondary market in Andalusia) are already facing price pressure — the market is factoring in future modernisation costs
- NZEB properties (Class A/B: heat pumps, solar panels, heat recovery) are selling at a 10–20% premium to German and Scandinavian buyers
Mortgages and financing for non-residents
Access to mortgage lending in Spain for non-residents differs significantly from the conditions for local buyers. Understanding these parameters helps to structure the transaction correctly.
| Mortgage parameters | EU residents (non-residents of Spain) | Non-EU non-residents |
|---|---|---|
| Maximum LTV (Loan-to-Value) | Up to 70% of the property value | Up to 60–65% of the property value |
| Required own capital | 30% + ~13% costs = 43% of the property value | 35–40% + ~13% costs = 48– 53% of the property value |
| Maximum debt burden | 30–35% of the applicant’s income | 30–35% of the applicant’s income |
| Maximum age at the end of the mortgage | Up to 75 years | Up to 70–75 years (depending on the bank) |
| Income documents | Tax returns for the last 2–3 years, bank statements, employment contract or dividend statements | Apostilled tax returns + certified translation; stricter AML requirements |
| Key banks for non-residents | Sabadell, BBVA, Unicaja (specialising in foreign buyers) | The same banks + international branches; longer underwriting |
Investment return calculation models
Before deciding to buy, build a financial model. Below are realistic examples for the two most common investment scenarios.
Example 1: Apartments in Estepona — short-term rentals
| Indicator | Value |
|---|---|
| Property value | €350,000 (2 bedrooms, 80 sq m, 300 m from the sea) |
| Purchase costs (+13%) | €45,500 (7% ITP + notary + solicitor + registration) |
| Total investment | €395,500 |
| Gross rental income (per year) | €35,000 (105 nights × €200 average rate; season April–October) |
| Expenses: management company (18%) | – €6,300 |
| Expenses: utilities, IBI, insurance, minor repairs | – €4,200 |
| IRNR tax (non-EU resident, 19% of net €24,500) | – €4,655 |
| IRNR tax (non-EU non-resident, 24% of gross €35,000) | – €8,400 * |
| Net income (non-EU resident) | ≈ €19,845 / year |
| Net income (non-EU non-resident) | ≈ €16,100 / year * |
| ROI (non-EU resident) | ≈ 5.0% net of the investment amount |
| ROI (non-EU non-resident) | ≈ 4.1% net * |
| Additional capital appreciation (forecast) | +8–12% over 2 years in Estepona |
* Non-EU non-residents pay 24% of gross income without the right to deduct expenses
Example 2: Villa in Nueva Andalucía — mixed use (residential + rental)
| Indicator | Value |
|---|---|
| Property price | €1,200,000 (4 bedrooms, 300 sq m, golf course area) |
| Purchase costs (+11%) | €132,000 |
| Total investment | €1,332,000 |
| Rental: 10 weeks per year × €7,500/week | €75,000 gross revenue |
| Management (18%) | – €13,500 |
| Maintenance, IBI, insurance, community fees | – €18,000 |
| IRNR tax (non-EU resident, 19% of €43,500 net) | – €8,265 |
| Net rental income | ≈ €35,235 / year |
| ROI from rental | ≈ 2.6% net (+ personal use + capital appreciation) |
| Projected value growth (5 years) | +25–40% (Marbella/Nueva Andalucía, historical data) |
| Total return on investment (10 years) | Rental income €350K + capital appreciation €300–480K = €650–830K |
Financial compliance: preparing the investor’s dossier
2026 is a year of unprecedented tightening of AML/CFT requirements in Spain and across Europe. The introduction of the AMLA (Anti-Money Laundering Authority) and updated European directives means that every foreign buyer undergoes a thorough vetting process. Lack of preparation for this process is the main reason for deals falling through among non-residents.
What must be included in the ‘Source of Funds’ dossier
- Tax returns for the last 3 years — apostilled + certified translation into Spanish
- Bank statements for the last 12–18 months for all accounts
- Contracts for the sale of assets, businesses or property (if the funds were obtained in this way)
- Statements of salary, dividends, pensions or passive income
- Corporate documents (articles of association, ownership structure, UBO declaration) — when purchasing through a company
- Proof of loans or inheritance (if applicable) — notarised
Specifics for buyers from Ukraine
- NBU restrictions for individuals: ~100,000 UAH/month for international transfers — direct transactions are not possible for most
- Corporate mechanisms: The NBU permits transfers of up to €1 million per year for servicing external loans or overseas subsidiaries — this requires a complex legal structure
- Spain–Ukraine DTA: the current double taxation agreement allows Spanish CGT/IRNR to be credited against the Ukrainian tax return
- Recommendation: before starting the search for a property — seek advice from both a Spanish and a Ukrainian tax lawyer simultaneously
Specific considerations for buyers from Kazakhstan
- Corporate structures: many Kazakhstani investors structure ownership through a Spanish SL or holding company — different tax rates and specific UBO rules
- Kazakhstan’s new tax legislation for 2026: stricter assessment of investment incentives – analysis of cross-border taxation is crucial
- Spain–Kazakhstan BIT: check the applicability of the agreement to your ownership structure
- AML category: Kazakhstan is on the extended monitoring list – prepare the most comprehensive dossier possible
Visa routes following the abolition of the ‘Golden Visa’
In April 2025, Spain abolished the ‘Golden Visa’ programme (residence permit for investments in property of €500,000 or more). This severed the direct link between purchasing property and obtaining residency. However, alternative routes remain, and in some cases they are more convenient than the original scheme.
| Visa | Who is it for | Key requirements (2026) |
|---|---|---|
| Digital Nomad Visa (DNV) | IT specialists, freelancers, entrepreneurs, remote workers | Income ≥200% of the SMI ≈ €2,640–2,850/month (applicant); letter from an employer authorising work in Spain; insurance with no excess |
| Non-Lucrative Visa (NLV) | Rentiers, investors with passive income, wealthy pensioners | Passive income ≥400% IPREM ≈ €28,800/year (applicant) + €7,200 per family member; or liquid savings covering several years |
| Highly Qualified Professional Visa | Highly qualified professionals, senior managers with a Spanish employer | Job offer in Spain; salary above the set threshold |
| Investment visa (non-property) | Investors in Spanish companies or government bonds | Investment in a Spanish business or securities; property is no longer taken into account |
Legal Due Diligence: Investment Checklist
Investors in the Costa del Sol market should carry out a three-tier audit of each property. This is not bureaucracy — it is protection for your capital.
Level 1: Legal audit
- Nota Simple from the Land Registry: title, encumbrances, mortgages, seizures, easements
- Licencia de Primera Ocupación (LPO): first occupancy licence — mandatory for residential use
- Community certificate (Certificado de Comunidad): no outstanding debts to the owners’ association — debts are transferred to the new owner
- VFT status (if the purpose is rental): verification of registration with the RTA and community approval status
- Escritura: verification that the property’s actual condition matches the deed
Level 2: Urban planning audit
- Compliance with the General Urban Development Plan (PGOM/POU): are there any plans for demolition or compulsory purchase
- Legality of all buildings and extensions: unregistered extensions = discount or mortgage rejection
- DAFO/AFO for rural properties (fincas): certificate of tolerance for buildings on rural land
- Infrastructure status: connection to municipal utilities or autonomous systems
Level 3: Technical audit
- Energy Performance Certificate (EPC): grades A–G; for grades F/G — budget for refurbishment
- Building services: condition of the roof, façade, air conditioning, plumbing and electrical systems
- Swimming pool and garden: technical condition, availability of permits
- For off-plan properties: bank guarantee (Aval Bancario) for all advance payments, developer’s reputation
Investor’s step-by-step checklist
3–6 months before purchase
- Define your investment strategy (rental / growth / flipping / capital preservation) and time horizon
- Select a target micro-location that fits your strategy
- Build a financial model: purchase price + 13% costs + income tax + CGT on sale
- Obtain an NIE (via a solicitor’s power of attorney or at the consulate; processing time 2–6 weeks)
- Compile and apostille the ‘Source of Funds’ documentation
- Open a Spanish bank account (or prepare to open one)
- Hire an independent Spanish solicitor BEFORE starting the property search
- Consult a tax adviser regarding IRNR, CGT and ownership structure
When selecting a property
- For short-term rentals: check for a valid VFT licence and its status with the RTA
- Carry out a three-tier legal + urban planning + technical due diligence
- Obtain a current Nota Simple (no older than 3 months)
- Check the EPC — energy efficiency rating; estimate the cost of upgrading if the rating is low
- For off-plan properties: check the developer’s bank guarantees and reputation
- Verify that the Escritura matches the actual condition of the property
At the transaction stage
- Sign the Contrato de Reserva with a deposit and a clause regarding a refund in the event of legal defects
- Following successful due diligence — sign the Contrato de Arras (10% deposit)
- Transfer the remaining amount via a currency broker (saving 3–4% on the exchange rate)
- Sign the notarial deed (Escritura Pública)
- Ensure registration with the Registro de la Propiedad and payment of all taxes within 30 days
After purchase
- Register as a payer of IBI and IRNR
- For VFT: notify the RTA of the change in licence ownership; register the NRUA number
- Re-register utility contracts
- Sign a contract with the management company (if renting)
- If intending to reside: apply for a DNV or NLV for up to 183 days a year
Conclusion: a strategy that works
The Costa del Sol market in 2026 is a market for the informed, prepared investor. A structural supply shortage, sustained international demand, high rental yields and some of the best tax conditions in Spain create a compelling investment case — for different strategies and different budgets.
Key principles for a successful investment: choose a location to suit your strategy, not a strategy to suit a location; build a comprehensive financial model BEFORE purchasing; carry out a three-tier due diligence process without exception; work with a team of independent specialists — a lawyer, tax adviser and currency broker.
| Would you like a personalised analysis of investment opportunities tailored to your budget and objectives? The Edenovo.com team will select properties, build a financial model and arrange full legal support in Russian. Contact us at edenovo.com. |
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This guide has been prepared based on current market data and Andalusian legislation as of March 2026.
This material is for informational purposes only and does not constitute legal, tax or investment advice.
© 2026 Edenovo.com — Property on the Costa del Sol
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