When buying a property in Spain you should be ready for additional costs and taxes over and above the property price. As a rule, the additional expenses amount to 12-15% of the property price declared in the title deed (Escritura).
- VAT (Impuesto sobre el Valor Añadido – I.V.A.) is applied for brand-new residential properties being sold for the first time, for commercial properties and for plots of land. Currently the VAT tax amounts to 10% of the property price declared in the deed in case of residential properties, and 21% in case of commercial properties and plots of land. In case of resale residential property the tax is called Transfer tax (Impuesto sobre Transmisiones Patrimoniales – I.T.P.) and amounts to 10%;
- Stamp duty (mortgage deed tax A.J.D.) depends on the province and in Alicante estimates to 1,5% of the so-called “loan guaranteed capital” which comprises the mortgage itself + bank’s bad debts insurance and all possible costs in case the lender stops paying the loan.
- Notary expenses start from €540;
- The land registry fees are calculated in relation to the purchase price declared in the deed and local registry fees; the approximate rate is €349;
- The mortgage opening commission is paid to the bank and amounts to 1-2% of the property price declared in the deed. The exact amount depends on the mortgage amount and the bank itself;
- The valuation fee averages 0,1% of the property price (for mortgages only).
Buying property in Spain entails some additional expenses to its owners. First of all here should be mentioned the maintenance costs, such as cleaning, repairing, reforming, utility bills and so on, which are determined by the size and the type of your property. Apart from them, there exist certain taxes and fees which face all Spanish property owners.
Electricity in Spain is billed monthly or bimonthly, depending on the location. There exist several tariffs: a fixed annual tariff, a free market tariff and a tariff for particulars which is the most commonly used. The last one depends on the type of the electric meter installed in the property and amounts to €0,13/kWh + 21% of VAT. There also exist minimum rates which are applicable even to empty properties; these rates vary according to the amount of electricity your property may potentially use with all the lights turned on. The minimum charge for an apartment amounts to 11 euros per month; the charges for a villa are about 18 euros per month.
Main gas is usually available in big cities. The bills are sent every 2 months and include the 21% VAT; like in case of electricity, the minimum rates are applied even if the property is empty (about €9 per month). However, butane gas bottles are used much more frequently. They are delivered directly to your door, and using them results much more economic than using main gas in most northern European countries (€15 a bottle). One bottle being used just for cooking lasts an average family approximately from six to eight weeks.
Water consumption is calculated in cubic meters and is billed once in three months. The rates are about €0,04-0,08/m3 including VAT. There also exists a charge for minimum consumption, even if no water is used during the billing period (approximately €8 per month). Some regional governments issue a charge for water purification. Late bill payments incur a surcharge.
The owners of a property forming part of any development, building or residential complex with shared zones, are obliged by law to form part of the community of owners (Comunidad de Propietarios). The purpose of this community is to maintain the shared areas for which an annual budget is approved. The communal expenses depend on the services provided and normally include the salary and the social security of the concierge, garden and lift maintenance, repairs, rubbish collection, water and lighting for communal areas, building insurance, security and administration fees. The abovementioned costs are divided between all the owners and are paid normally once in three months. The fee for a standard two-bedroom apartment amounts to €250-300/trimester, while the community expenses for a villa in a prestigious residential area ascend to €500-600/trimester.
The household insurance and the lender’s life insurance are obligatory for all properties acquired through a mortgage; they are paid annually and their amount is individual depending mostly on the type of property and the lender’s age.
Property Ownership Tax (I.B.I.)
I.B.I. (Impuesto sobre Bienes Inmuebles) is a local tax payable yearly to the Town Hall that depends on the cadastral value of the land and the value of the building according to its type, location and usage. The percentage charged by local authorities is quite low (0,2-0,7%). For example, in Benidorm it amounts to 0,60% and in Altea – to 0,49% of the cadastral value of the property.
The abovementioned costs are approximate and may vary according to local laws modifications, tariffs and tax rates changes. The amount of utility bills will also depend on the period of the year during which you live in Spain (in summer the electric power and gas consumption reduces) and, of course, on your personal consumption habits.
Our company will help you choose the most appropriate tariffs and connect Spanish utilities without any extras. To consult the list of our free and paid services, please check the ‘After-sales service’ section.