What is the real cost of owning your Spanish property as a non-resident?

Congratulation for your purchase, now let’s check the annual costs of owning your property.

You’ll have those divided into five different groups: Taxes, Insurance, Utilities (Electricity, Water, Gaz, Television, Internet, Telephone), the charges of your own property and eventually Community Charges.

Let’s have a look at a concrete example: a two bedroom apartment in Barcelona of 100 m2 with a market price in 2022 of 440.000€ and a “valor Catastral” of 100,000€. We assume a rental value of 18.000€.

1. Taxes

   If you want to have a detailed view from our experts on this subject, have a look at our article: What taxes do you have to pay on your Spanish property?

   Here is a quick summary:

   a. Local Tax: IBI, “Impuesto sobre Bienes Inmuebles“:

   What is it? A local tax on any Spanish property.

   Who has to pay for it? Any owner of a Spanish property, local or foreigner.

   How do you know? You’ll get a letter after June of any year but some local authorities don’t send it. You owe this tax

   Who is the beneficiary? The tax is payable to your local Town Hall. Those are for infrastructure, waste collection,…

   If you pay too late, you will have to pay a penalty.

   Where can I pay it? Your local Town Hall, a few of them are available online.

   Our tip: A few of them allow domiciliation of payment: very easy, they will take the amount from your account every year. A very good solution if you are living abroad. Make sure your account balance is sufficient: some banks would refuse to pay or would charge you a high interest if the account would fall into negative territory.

   How is the Tax Calculated? The IBI is based on the “Valor Catastral“. The “Valor Cadastral” can be legally adjusted if needed by any Town Hall.

   Our tip: by working with a lawyer, he will make sure that the previous owner paid for it, if it is not the case, you’ll have to pay for him!

   What if your property is empty? You owe the tax!

   Our tip: After buying a property, register your property with the Town Hall within two months. Take all the official documents with you. Most of the time, your lawyer will do this for you.

   If you forgot it, your local town hall could recoup the amounts due for the last 5 years + penalties… So, now you know!

   The IBI for the apartment in Barcelona is under 0.6% of the “Valor Catastral“: i.e. 360€

    

   

    

   b. State Tax: You are renting it. You are not renting it… Modelo 210 – Form 210

   A. You are renting out your apartment => Quarterly filling, before the 15th of the month following the end of the quarter.

   The State tax for the apartment in Barcelona is 19% of the “Rental Value“: i.e. 3648€ on an annual basis and 912€ on a quarterly basis.

   Our Tip: you have items that could reduce this amount, check with (y)our lawyer.

   B. Your apartment is not rented => Yearly filling

   The State tax for the apartment in Barcelona is under 0.2% of the “Valor Catastral“: i.e. 200€

   Where can you find the Spanish form 210 directly in English?

   Where can you find the official information for filing your Spanish Form 210 in English?

   Have a look at the help guide written in English by the Spanish Authorities.

   Our Tip: Pay attention, if you bought the property with someone else (spouse, kids,…), everybody needs to do one filling for the taxes!

   Our Tip: Take advantage of our network and get your filling done by someone on the ground.

    

   

2. Insurance

   The insurance should be around 0.05% of the price of your property.

   The insurance for the apartment in Barcelona is under 250€.

   Our Tip: Many insurance brokers in Spain speak foreign languages. Ask a quote from our home insurance partner in Spain.

    

   

    

3. Utilities

   If your apartment in Barcelona is empty, you’ll have a few charges just to have accounts open and running:

   +/- 15€ / month for water

   +/- 20€ / month for electricity

   +/- 6€ / month for gas

   For a total of 41€ / month if your apartment in Barcelona is not rented.

   If your apartment in Barcelona is rented, charges may increase up to 150€ / month. With inflation rising since 2021, you should expect those costs to increase even more in the future.

   Our Tip: If your Gas meter needs to be reopened, you’ll have to get a technician to certify that your installation standards is fine. Count about 150€ for this.

    

4. Community Charges

   This charge depends on the property you bought:

   • Is there a lift in the building?
   • Is the property new? Does it need more or less of maintenance?
   • Are many properties empty?
   • Do you have a swimming pool?
   • How often is the property cleaned?

   For your apartment in Barcelona count between 50€ and 100€ per month.

   Our Tip: Ask for the last Assembly documents before buying. Your lawyer will do this in general. You will get a much better picture on those costs and on the costs carried on the property in the past or to be done in the future.

    

5. Charges of your own property

   • Do you have a private garden?
   • Do you have your own private pool?
   • The paintwork needs doing?
   • Do you have a mortgage? Check our paper we wrote on that to find out what is your monthly mortgage payment: What is the cost of your Spanish Mortgage? Your ultimate Mortgage calculator

    

   

   To sum up: 0.8% per year:

   • 0.15% Local tax,
   • 0.05% National tax(not rented ),
   • 0.05% Insurance,
   • 0.1% Utilities (empty),
   • 0.3% Community charges,
   • 0.1% Property charges

    

   

    

   Do you want to be sure of the cost of buying a Spanish property? Read the news we wrote on this. Last but not least another interesting paper is: cost of living in Spain vs any country in the world.

    

    

    

   

   All those information are from reliable sources. We advise you to check those with your fiscal and legal advisor in Spain in order to get all those costs up to date and adjusted to your specific situation. Find your Spanish property lawyer here.

    

   Do you want to start searching immediately?

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   If you don’t know where to buy, this general article on the Spanish Real Estate market could be very useful: Everything you ever wanted to know about the top 20 Spanish real estate markets

    

   

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   This infographic could help you before buying your new property in Spain.

   

   Don’t try to do it alone, you think you will save money, but you will WASTE money

The post What is the real cost of owning your Spanish property in 2023? appeared first on How to buy in Spain.

Why should you subscribe a home insurance for your second home in Spain?

When you move to a new home in Spain, it’s almost essential to insure it. It is an important type of insurance which protects you against all the unexpected events that may happen in, and outside, of your new home.

In Spain, it’s not an obligation for the tenant to subscribe to home insurance. However, it is strongly recommended because no one is safe from something unexpected, like; burglarly, fire, water damage, natural disaster…

For the owner, having insurance is an obligation if the property is mortgaged.

Your home insurance will cover the damage of your personal property: furniture, electronics, jewellery, clothing and other sentimental items. As well as damage to your real estate: walls (for example: water damages on the parquet…) roof, ceiling, doors, and windows…

What are the different parts of your insurance?

In case of an accident, it insures:

• your property:
  1. the walls (“Continente” in Spanish)
  2. the furnitures, and your personal effects (“Contenido” in Spanish)
• your civil liability.

The civil liability guarantee is fundamental because it protects you and your family from any material or immaterial damage caused to a third party. Civil liability covers the acts of your daily life inside and outside your home, for example: if a flowerpot falls off the balcony and hurts someone, if you hurt someone on the street with your bike, and if your child breaks a neighbour’s window while playing… As well the damage caused to a third-party by your home (like fire/water damage, and explosion…etc). The amount insured by this guarantee depends on each contract (usually between 150.000 and 300.000 €), if you don’t have home insurance you must pay the costs of compensation, that’s the reason why it’s strongly recommended to be insured!

How is the price of your home insurance in Spain calculated?

The cost of home insurance varies according to different aspects: the amounts insured, the area of the house, the localisation, if it’s a primary residence or a secondary, if it’s rented…

First, you will have to give a value to your furniture.

You’ll have to choose the amount (capital) of insurance that you want for your property, we advise you to insure a minimum of 10.000 €, so you don’t have any bad surprises in case of a serious disaster. Naturally, the premium will increase according to the capital chosen.

Second, your insurance will establish a value for the cost of building your property in the same state as it is now, if for instance, there was a fire. For that, they will take into account, the area of your property, how many square meters and of course they will calculate a cost per square meter. In Spain, it’s important to know that your home will always be covered at reconstruction value, and not the purchase value.

Secondary residences will represent a slightly higher cost of insurance because of the higher risk of theft, compared to the principal residence, and it’s will be the same if the residence is located in a flood zone or outside the urban centre.

Of course other criteria will be taken into account:

• Year of construction of your property?
• Location of the property?
• Do you have a security system? Is it connected with a security company? Is it approved?
• Do you have a reinforced door?
• The floor your property is located (by the way, do you know that insurance of a last floor is usually the most expensive?)
• Are your window easily accessible from outside? Do they have safety glass?
• Do you have a safe?
• Do you live in your property or is it rented? Second residence?
• Do you have security shutters?
• Do you have a security lock?

Some useful options that could increase the price but are “nice-to-have”:

• Technical assistance: Lost your keys? Water leak? some insurance give you the opportunity to get assistance quickly. Not bad.
• Legal assistance: From time to time it’s difficult to find a neighbor… this could be very useful, furthermore if it’s not your native country and you don’t know the language very well.

A real insurance example: Apartment in Barcelona

Let’s take the insurance of an existing apartment in Barcelona of 130 m²:

• with a “Continente” value, or property value of €120,000
• a “contenido” value, or furniture value of €6,000
• a civil liability cover of €300,000o
• with technical assistance and legal assistance

you will pay around €250 per year.

Our tip: if it is an insurance for a second home and it is not a new build property (in that case you could take the risk if you want to), pay attention to have an insurance covering your property even if it is empty more than 180 days per year. Some insurer won’t cover the risk if the property remains empty. Let assume, your property is old in an old apartment building and you just come in July every year, anything could happen: a leak within your property, a leak from your neighbor or even a leak from a neighbor in the property next to you. Those never happen… but no, in fact they do happen… and for may be €30 per year, you are happy to be cover in the case it happens.

What should you do in the case of a claim?

In the case of a claim, you’ll have 7 days to make your declaration after the accident. If you’ve subscribed directly with the insurance company (online or through an agent), you’ll have to contact and directly manage the whole process with them (declaration of the incident, sending the bill, lodging of the complaint in case of theft, request of an expert to analyse the damages and accept the request of a repairer, claims in case of non-conformity…) If you subscribe a home insurance through a broker, you simply have to contact them. They’ll take care of the declaration of the accident for you and make all the necessary managements as well as the follow-up of the file to guarantee you an effective solution.

How to choose the best home insurance as a foreigner?

In our mind, what is the most important point for a foreigner is to have someone speaking your language and of course Spanish. That’s why we work with a insurance broker working with many different languages. We are customer for many years and had some “insurance events” with the property… it was so nice to be in such good efficient hands that we ask them to partner with us. That’s how we work at HowtobuyinSpain.com.

Choosing the right insurance isn’t a simple task. There are many companies, different contracts and a lot of attractive offers…but do they really meet your needs? Because it’s a contract for a future service, you’ll never know if you’ve made the right decision until you make a claim… also, you have to know that, often, less expensive doesn’t equate to a better option!

Why work with an insurance broker for insuring your holiday home in Spain?

It’s advisable to use the services of an insurance broker. The broker is an intermediary between you and the insurance company.

1. They are experts in insurance.
2. The broker is independent, he works for you.
3. The insurance broker will propose several solutions from different companies
4. The insurance broker will help you choose the best insurance covering your need
5. The insurance broker will negotiate the price for you
6. If you have a claim, your broker will manage everything. That’s priceless.
7. If you have a claim, they’ll take care of the complete process and will follow-up with you and defend your rights in case of misunderstanding with the insurance company.
8. Most of the time, your broker will have many different contracts with you, you are a long term customer, he will do everything he can to help you out.
9. Last but not least, our partner employees work in many languages

Get the best home insurance in Spain thanks to our partner! One of the most competitive broker in Spain

Complete the following form if you wish to receive a home insurance quote from our collaborating broker.

Take less than one minute to fill the form. You will receive an answer within two hours during office hours!

They will help you to find out the best insurance, at the most cost efficient price to cover your property

We partner with them because, we are a customer and we tested the prices and the services. Quality service is priceless.

Looking for a property hunter, a lawyer, an architect,… a local expert in Spain? Ask us directly!

Check the full team of HTBIS here

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