31 Jul Costs of owning a home in Spain
Once you’ve completed your deal and have the deed in hand, you’ll pay certain annual costs and taxes for your property as well as operating costs.
Municipal property tax (impuesto sobre bienes inmuebles, IBI)
IBI is the annual property tax that is normally paid once a year and no later than December 31 on form 210 to the municipality where the property is located. The amount is calculated based on the property’s tax value: type of property, area and the value of the building. Normally this tax is 0.5 percent of the assessed value, which in Spanish is called valor catastral.
Housing association (comunidad de propietarios)
In each housing complex, each home owner is required to pay a monthly fee for maintenance and upkeep of the common areas. Costs vary depending on the housing complex and cover maintenance of garden areas, swimming pool, any security guards, cleaning and maintenance of other common areas. Electricity and water are not included in this cost.
Garbage fee (basura)
Garbage collection is paid to the municipality and costs 50–100 euros per year, depending on the size and location of the property.
Home insurance (seguro de hogar)
The cost of a normal 2-3 bedroom apartment is between 300-400 euros per year, which then includes both the home itself and the movables. There are several English speaking insurance agents on the Costa del Sol who can offer you home insurance. If you finance the purchase through a Spanish bank, the bank will offer you insurance for your home.
Electricity
To have the electricity contract transferred in your name or to get a completely new contract, you go to the electricity company’s office in the place where you live. The following must be brought along:
- Title deed or lease agreement
- A previous bill (does not apply to newly built property)
- Passport or residence document
- Bank account number (for direct debit)
- Report from the electrician who has carried out the installation work (only applies to newly built property)
- The first title deed from the town hall that you get when the city planning office approves the building (only applies to newly built properties)
It is important that you estimate your electricity needs before ordering the electricity meter. Higher power requirements naturally result in higher costs both in terms of installation and consumption. It is important to check that there is an earth fault circuit breaker installed in the property. Currently, this is also a requirement for older homes.
Water
The water supply is normally managed by the municipality or by a private company that the municipality has engaged. When buying a home in Spain, you should always make sure that the water meter is registered in your own name. The following documents must be brought to the water company:
- Title deed or lease agreement
- A previous bill (does not apply to newly built property)
- Passport or residence document
- Bank account number (for direct debit)
- Report from a plumbing installer (if the house is newly built)
The water bills are sent out from the town hall or from the company that manages the water distribution. If you think there are previously unpaid bills (which you should always check with the municipality or water company before buying), you can also order a brand new water meter. Then you sign a new contract with the water company, and do not take responsibility for the previous owner’s bills. If there are additional costs when installing the water meter, the new owner must bear these costs. When installing a new water meter, previous bills must be paid and the latest bill must be presented. However, this does not apply to new development. It is also possible to arrange for the old, unpaid bills to be deducted directly from the purchase price so that the new owner can pay them. The prices of water vary greatly depending on where in Spain you live.
Garbage disposal and sewage charge
The municipality is responsible for garbage collection. The bill for garbage disposal comes once a year. In some municipalities, garbage disposal is included in the municipal property tax. The sewage bills come four times a year and for the most part the water company takes care of this. Sometimes sewage treatment is also included in the water fee.
