Fixed costs after buying a property in Spain

18.02.2018

In general, the maintenance of a second residence in Spain does not constitute a major additional expense. In addition to general utility costs, such as water and electricity supplies, the annual costs of taxes and other costs depend on the size and type of home.

IBI (anual gain tax)

This is a municipal tax on the property, regardless of who owns it. It is calculated on the basis of the cadastral value (an administrative value, usually lower than the market price, sometimes considerably less) to which percentages determined by the corresponding Council are applied. The amount varies from 150 to 500 euros per year.

IRPF (Income Tax)

If a new home is your "regular" or "permanent" residence, it is exempt from income tax. However, if it is a second home, it will be taxed as a so-called property tax on your annual income tax return.

The income tax base will be 1.1% of the cadastral value if it has been recently revised, or 2% if it has not been revised. If no cadastral value has yet been assigned to the property, 1.1% of 50% of the purchase price applies. The result of this calculation is applied to the general tax rate applicable to each taxpayer.

For example, if a property has a cadastral value of 100,000 euros, the tax is calculated as follows: Income tax (IRPF): Tax base=1.1% of the cadastral value (100,000 euros) = 1,100 euros. The amount of tax will be the result of applying each taxpayer's tax rate to this figure. For example, if your tax rate is 19% (general tax rate for EU citizens as non-residents in Spain), the income tax will be 209 euros per year.

In addition to home ownership taxes (IBI and non-resident tax), keep in mind the following costs:

Homeowners Association

If a property is part of a complex, a residential area or a building containing communal areas, each owner must be a member of the homeowners association by law. An annual budget of the common maintenance costs will be approved at the general meeting of the homeowners association. Each owner pays a maintenance fee, also known as community fees, usually between 45 and 120 euros per month. The amount depends on the number of owners and the type of communal facilities in the complex, such as a swimming pool, elevator or spa.

Insurance

The cost of home insurance depends on the characteristics of the building and the facilities. It is usually between €180 and €380 per year, for an average type of home.

Swimming pool / Garden maintenance

There are companies that specialize in this type of service and they will visit your property once a week to take care of cleaning your garden and chemical treatment of your pool.

So, what annual costs do I have each year?

Above in the photo you can see an example for a typical apartment with a purchase price of €200,000

If you have any questions, please don't hesitate to send us an email info@medvillaspanje.com