What are the annual costs for a property in Spain?
How much do I spend on owning a Spanish property.
The cost of owning Spanish property, consists of three parts: general costs, financing and, of course, taxes. We explain all three of these separately. These costs are important for the return on your Spanish property.
General costs (residential property)
General costs include:
Utilities
The cost of water, electricity and possibly gas varies greatly depending on consumption, but keep in mind an average of €100 to €200 per month.
It is important to realise that the exact costs can vary by region, municipality and especially the season! The amounts are only indications.
Common costs
If your property is in a flat block or residential complex, Then there is often a required contribution to the common costs. These average between €400 and €900 a year, but can be higher for luxury facilities.
Insurance
Although not compulsory, it is wise to take out contents or building insurance. Consider €200 to €500 a year for fire and contents insurance.
Bank charges
Spanish banks often charge non-residents a small fee for holding a bank account. This costs around €15 per quarter.
Financing costs (e.g. mortgage)
Have you financed your home with a mortgage? Then of course you have to deal with monthly repayments. This depends on your mortgage amount and mortgage terms.
Taxes
Taxes include:
IBI (Impuesto sobre Bienes Inmuebles)
This is the property tax to be paid annually. The amount varies by municipality, but is usually between €300 and €1000 per year.
Waste tax
The annual waste tax is about €120 to €200, depending on the municipality and type of property.
Wealth tax
Spain has a wealth tax. For non-residents, this tax applies only to assets in Spain. There is a general exemption of €700,000. An éxtra exemption of €300,000 applies to owner-occupied property. The rates thereafter range from 0.2% to 3.5%, depending on the value of assets. Some regions have different rules, such as Madrid and Andalusia.
Non-resident tax
If you do not live permanently in Spain, you pay non-resident tax annually. This tax is based on the cadastral value of your property and is usually 1.1% of the cadastral value for EU citizens. For a property with a cadastral value of €200,000, this amounts to about €418 per year.
Income tax on rentals
When you rent out your Spanish property, you pay income tax on the rental income. For non-residents, there is a flat rate of 24% on the gross rental income.
Are you still making a profit?
As you can see, there are quite a few costs involved in having a Spanish home.
Want to know about whether you can still make a good return? Then do our rental yield check: