What are the ongoing costs that should be considered when buying in Spain

When owning a property in Spain before buying take into consideration all the regular yearly cost implications

IBI Spanish Council tax

IBI is a yearly Spanish tax payable to the regional governments and is equivalent to council tax in for example the UK. IBI is payable once a year in September and is assessed against the cadastral value of the property so the larger the property the higher the IBI. IBI is used by the Spanish authorities to supply lighting, road infrastructure and other services. It is payable by resident and non resident buyers in Spain. When buying a property in Spain it is important to understand the IBI level of the property being bought. Your Spanish Lawyer will find out these costs for you.

Wealth tax for non residents of Spain

Wealth tax was removed by the Spanish government a few years ago. At one point it was payable by all non residents of Spain based on a percentage of the value of any assets held. Recently for buyers of luxury high priced property Spanish wealth tax has been re-introduced. Wealth tax when re-introduced was not introduced to cover all buyers in Spain but is payable if you have an asset of € 750k or more.

Community charges

If you buy in Spain on an urbanization it is most likely you will have a community in place which is made up of all the owners of the various properties. The community will appoint a president and will manage the finances of the community. The monies will cover matters like, security, gardens and maintenance of the communal areas. Each community sets its own charges so it is important when looking at a property that you ensure your Spanish Lawyer checks and informs you of what the yearly ongoing community bills currently are and whether there is any large and expensive one off cost projects in planning which the new owner will become liable for.

Electricty in Spain

Electricity is the normal source of heating in Spain. Whilst some homes have gas this is few and far between.

Electricity is usually billed every other month but it in Spain billing durations can change on a regular basis. All new property sales since June 2013 must come with an energy certificate which clearly outlines the power usage and what measures could be put in place to lower consumption. Anyone selling a property in Spain is obliged to provide the buyer or their lawyer with an energy certificate.

Spanish Water rates

Some properties in Spain are supplied by the water companies and in some areas water is supplied by the Town Hall. Many properties in Spain are on meters so when buying your Lawyer in Spain should check the overall water usage and historic bills to give you some idea of what your yearly bills will be.

Road tax when driving in Spain

If you buy in Spain and buy and run a car yearly road tax is payable on a sliding scale dependant on the value of the car. Road tax is payable between April and May. If you own a car and do not get a tax bill come through you should investigate why this is the case as failure to pay will result in fines and possibly an embargo on your property or the car.

Spanish Mortgage payments

If you buy in Spain with a loan you will need to make monthly payments for the mortgage. Most loans in Spain are reviewed once a year against the 12 month Euribor, so each year the payments will fluctuate either up or down. Spanish Banks take action quickly if you are late or the payment is not complete so each year you must check what your new monthly payment will be.

You may save yourself considerable sums of money by using a specialized currency exchange company to move the regular funds required for all your ongoing costs in Spain.

Ongoing costs when owning a Spanish property