There will be of course costs associated with owning a property in Spain. Some of these will be maintenance costs, such as cleaning, repairing, rubbish collection, and so on. These will be determined by the size and type of the property you buy. Obviously a large villa with a garden and pool will require much more effort and cost to maintain than a small apartment. For cleaning a figure of 10 Euros an hour is fairly typical throughout Spain.
Apart from the general maintenance costs referred to above, there are a number of costs in the form of taxes and fees that property owners in Spain face.
Taxation of Spanish property: Local Rates or Annual Property Tax (IBI):
This is the main local property tax affecting owners of properties in Spain payable yearly to the Town Hall. This taxes are payable irrespective of whether the owner is a resident or not, and are calculated from the cadastral or ratable value of the property assigned by the Spanish Tax Office (an administrative value that is usually lower than the market value, sometimes considerably so). The cadastral value takes into account the value of the land plus the value of the building, according to type, location, quality, usage, and size. Upon this value, the IBI or Property Tax is set by the local Town Hall, and the tax rate goes from 0.4% – 1.1% of the valor cadastral depending on the Spanish region. You will be paying this tax for every single property, such as an apartment, garage or store-room. Also, if your Spanish property has a garage entry you are obliged to pay a small fee called “Entrance of Vehicles” that is paid annually, but it is very low.
Rubbish Collection (RS):
The rubbish collection rate is applied by every local Town Hall to every dwelling and payable annually or semiannually.
Owners of property that is part of any development, building, or complex in which common zones are shared with other owners are by law obliged to be members of the community of owners, generally speaking, the Community of Co-Proprietors or Homeowners Association, known as the “Comunidad de Propietarios”.
The purpose of the Community is to own and maintain the common elements of the building or estate in question, and each homeowner is obliged to participate in the expenses of the upkeep of the community areas and services on a prorated basis with the other owners. The fees will vary according to the magnitude of the common areas, the costs of maintaining them, the services that the community votes for, and the size of your property, call it: salary and social security of the hall porter, common garden maintenance, lift maintenance, repairs to common elements, rubbish collection, water for watering community gardens, electricity for lighting communal areas, insurance, security, and administration fees.
Usually, a homeowner’s percentage of the costs is fixed by the size of the apartment, or plot, divided by the total area of all the apartments or plots. A budget for the annual community expenses is presented at the annual general meeting of the homeowners, and they or their authorized representatives must approve the budget by majority vote of those present at the meeting. The President of the community must, by law, own a property within the complex itself and is chosen by way of vote by the co-owners. The President has no remuneration for this role.
A standard insurance cost will vary according to the circumstances of the owner and the type of property and use of it. However it should be born in mind as a cost that all property owners will face.
One should note that in an apartment building, the Homeowners Association is required to insure the building for its reproduction cost. Therefore, the individual’s insurance policy for the apartment need not cover the entire value of the apartment, but only damages to the interior of the apartment, its contents, and third party liability. It is also advisable to inform to the insurance broker if the property is going to be rented.
The upkeep of a private garden is essential to the maintenance of your property and its cost will, of course, depend on its size. Apartments and townhouses have the communal garden areas tended by a contracted gardener and the cost is included in your community fees.
It is important to note housekeeping and cleaning service, especially in the case of lettings. The cost is about 10 € per hour.
Electricity and Water:
Electricity is billed bimonthly and the water service normally quarterly, depending on the town. Minimum rates are applicable whether you are making use of it or not, and the minimum varies according to the contracted power. Normally in the water bill, you might pay a separated fixed amount (usually every semester) for sewerage.
The telephone bill is charged monthly. Standard rates vary according to the equipment installed, and as with the electricity and water, a minimum fee is charged whether you use it or not. There are many local and national telephone companies that can offer substantial savings to those who wish to get a package of all included: Fixed-line and mobile telephone, ADSL and even TV service, which require a study of the best deals. You will be able to find also good deals for overseas calls, both to landline and to mobile numbers.