Annual Property Cost
There are certain costs associated with owning a property in Spain. Some of these will be maintenance costs, such as cleaning, repairing, reforming, utility bills, rubbish collection, and so on. These will be determined by the size and type of the property you buy. For cleaning a figure of 12 Euros an hour is fairly typical throughout Costa del Sol.
Owners of a property that is part of any development, building, or complex in which common zones are shared with other owners are obliged by law to be members of the.
These fees are set by the community owners who appoint an administrator or president of the community who takes responsibility over a defined set of services, including the maintenance and insurance of the complex.
Fees will vary depending on the size of gardens, facilities, number of lifts, if there is private security, etc.
A budget for annual community expenses is approved by majority vote of all owners (or representatives) who are present at the annual general meeting.
Fees normally range between 200 and 400 Euros per month.
These include electricity, water and gas and vary depending on your personal consumption.
- Electricity – Is normally paid each two months and can be anywhere from 150 to 350 Euros.
- Water – Paid once a month and ranges between 50 – 150 Euros.
The building will be insured by the community. Your property insurance will be for contents and damage by fire and water etc. It is mandatory that in a communal building owners are insured.
This is a local tax applied to the ownership of property in Spain, irrespective of whether the owner is a resident or not.
Calculated on the basis of the valor catastral (an administrative value that is usually lower than the market value, sometimes considerably so) set by the town hall the tax rate goes from 0.4% – 1.1% of the valor catastral depending on the Spanish region.
The payment is made once a year to the Town Hall based upon the capital value estimated by the regional community and the size. Small towns have lower IBI rates compared Marbella.
NON RESIDENT PERSONAL INCOME TAX (IRNR)
There is an annual income tax applied to non-residents who own a property in Spain that varies according to whether the property is rented out or not.
- RENTED OUT
If non-residents rent out their property and receive an income in exchange, they are obliged by law to declare this income and pay taxes on it. The taxable base and the tax rate will be determined by the laws as they apply to each person’s particular circumstances (taking into account the double taxation treaty – if any – between Spain and the country of origin of the non-resident). In many cases non-residents simply pay a flat rate of 25% of the gross income they earn from their property in Spain.
- NOT RENTED OUT
Non-resident property owners who do not rent out their property and who do not have any other source of income in Spain pay income tax based on the value of their property. The tax rate is fixed as 25% of 2% of the valor catastral of the property.
The tax on a property with a valor catastral of 700.000 Euros would be as follows:
Property value for tax purposes = 700.000 Euros
Taxable base (2%) = 14.000 Euros
Tax (25%) = 3.500 Euros
RESIDENT PERSONAL INCOME TAX (IRPF)
Residents in Spain will have to pay the income tax based on their income earned during the year. The tax rate depends on the level of income.