How Much Does a Spanish Home Really Cost?
Spain is our favourite place to buy abroad. But in 2024, what are the costs involved for buying a home in Spain including purchase taxes and ongoing costs?
Purchase Costs
On top of the purchase prices, you need to pay stamp duty and legal fees, as you might do in the UK. When Britons are buying abroad, the estate agent often performs a much more of a hand-holding role than in the UK, costs can also reflect this.
Many estate agents recommend a ballpark of around 10-14 per cent of the purchase price but it can be lower, depending on the Spanish region, and also whether you take finance. The ballpark above includes Transfer tax (ITP), equivalent to stamp duty, calculated on the property purchase price and between 6.5 and 10 per cent, depending on the region: in Valencia and Catalonia it is 10%, in Andalucia it’s 7%, Canaries 6.5 % and Murcia 8%.
It also includes the notario’s fee of around 0.5 per cent of the purchase price and tends to start from €600. Land Registry fees in Spain tend to be between €400 and €700 – or 0.4 per cent of the purchase price.
Legal fees are usually a percentage of the purchase price – generally 1 per cent plus VAT– but with a minimum fee. Typically this might be €1,000 to €2,000. VAT on new-build properties in Spain is 10 per cent and stamp duty on new-build is 1.5 per cent of the purchase price.
Ongoing Ownership: Taxes and Fees
The good news is that in Spain the equivalent of council tax payable every year by home owners is a fraction of what is paid in the UK.
Home owners pay IBI tax every year payable to their local town hall (which is sometimes known as SUMA), and this depends on the area and the property’s rateable value. In some areas the cost of refuse collection (basura) will be included with the IBI, in others it is a small separate charge. In total, this tax outside cities can be as low as €100 or €200 per year.
Homeowners on resorts or managed urbanisations also pay community fees towards the maintenance of the communal areas - swimming pools, garden landscaping, lifts. Owners of properties with more extensive facilities – such as golf courses or spas – will pay higher community fees. On a small mid-level development with one swimming pool community fees of €50-60 per month are not untypical. Newer developments may be higher.
Cost of Living
Inflation has affected most places in Europe but Spain is still more affordable, especially outside its main cities. According to the website Numbeo, the cost of living in Spain is 23 per cent lower than the UK, with a single person being able to live on £600 per month, without rent or a mortgage.
Eating out at local restaurants remains inexpensive. A menu del dia (menu of the day) – with half a bottle of wine and a coffee might be around €12 in villages outside of tourist hot spots. Utility bills also tend to be lower – energy and petrol costs have gone up everywhere but water bills in Spain remain very low perhaps £35 per year. The average UK water bill in 2023/24 was £448, according to Ofwat, the regulator. A combined landline/broadband/mobile phone package might be around £40-45.
Income Tax
As the owner of a holiday property in Spain you will be liable to pay non-resident’s income tax, even if you do not rent it out. You will be required to submit an annual return and expect to pay a very low annual tax based of the rateable value (valor catastral) of the property. The tax is 1.1 per cent of the rateable value, taxed at the rate of 19 per cent. If you rent out your property you will need to pay income tax on the rent you earn of 24 % now we are not in the EU.
Read more:
