Spain Guide



Spanish Homes

Obviously the annual running costs of a Spanish home will vary according to the size, type and location of the property. But for an average villa in one of the popular investment areas you can expect to pay between £1,500 £2,000 a year in utility charges, insurance and taxes.

It's impossible to give the exact amounts you'll be charged for things like your water, electricity, council tax etc because of the regional variations but when you buy your property you should secure the services of a good "asesor" or "gestor" (fiscal adviser) who will be able to tell you exactly what needs to be paid and when. This is important because the bureaucratic systems in Spain operate in a very different way than in the UK and you'll probably have the added complication of not speaking the language fluently. If you don't use a professional adviser you could suddenly find your electricity or water cut off or a heavy fine slapped on you for non payment of a tax you didn't know anything about. The fact that the bill was sent to the wrong address doesn't necessarily excuse you in the eyes of the Spanish authorities!

It's best to open a Spanish bank account and arrange to pay as many of your bills as possible by standing order to avoid the danger of incurring a fine for non payment. But make sure that you go through the bank statements with a fine toothcomb because it's not uncommon for the utility companies and local authorities to take more than they're entitled to. If you're not sure what everything is on the statements, get your fiscal adviser to check that appropriate amounts have been deducted.

For most homeowners the cost of maintaining their Spanish property consists of the following:

  • Water
  • Electricity
  • Gas
  • Council tax (IBI)
  • Wealth tax (patrimonio)
  • Property income tax (IRPF)
  • Community charge (where applicable)
  • Financial adviser ("gestor" or "asesor")
  • House and contents insurance

Water is a precious commodity in many parts of Spain and due to problems of uneven distribution, drought and the pressures of mass tourism, many local authorities have increased their charges dramatically in recent years. All properties are metered and most authorities charge a quarterly rate for a minimum consumption (even though you may not use any water) then charge you a set amount for each extra cubic metre used. This amount varies from one area to the next.

Electricity is billed every two months, normally after the meter has been read. Gas is cheaper than electricity but it's rare to find a mains supply except in the major cities. Most people rely on bottled gas which is cheap but very inconvenient.lugging full gas bottles up the stairs of an apartment block with no lift is no joke!

Whether or not you let your Spanish home you'll still have to pay income tax based on an assumption that you're letting it. This property income tax is called Impuesto sobre la Renta de las Personas Fisicas (IRPF) and applies to all non residents. The local town hall will charge you according to the rateable value of the your property (known as the "catastral"). They'll assume you're making 2% of this value each year from letting your property and charge you 25% of that "income" (whether it's real or imagined!).

The IBI tax (Impuesto Bienes Sobre Inmuebles) is like the British council tax and usually includes rubbish collection although this is sometimes charged separately. It can vary from under £100 a year in isolated rural areas to more than £1,000 a year in the most exclusive areas.

Non residents are also liable to wealth tax (Impuesto sobre Patrimonio), commonly known as "patrimonio", on any assets in Spain (primarily property). For assets totalling less than 160,000 Euros the tax is 0.2%. The rate increases with the value of the assets.