When you buy or inherit property in Spain, there are various ongoing costs you need to be aware of. Failure to cover these costs could cause legal difficulties, including the potential for your property to be embargoed or seized to cover any unpaid costs.
Many of the costs of owning property in Spain are similar as those for owning property in the UK, however, you should never make any assumptions as the exact costs involved will depend on the circumstances.
We always recommend consulting our specialist Spanish property lawyers to make sure you fully understand your financial and legal obligations when owning Spanish property. We can also help you with buying Spanish property and inheriting Spanish property.
Some of the key costs you may have to pay as a Spanish property owner include:
- Council tax (Impuesto Sobre Bienes Inmuebles)
- Community Charges (Cuota Comunidad de Propietarios)
- Property insurance
- Income tax
You can find out more about these specific costs and when they are likely to apply in the sections below.
For your convenience, we have also put together a list of useful Spanish legal terms and their English translations, to help make navigating legal issues in Spain a little easier.
For specific advice on the costs of Spanish property ownership, please get in touch with our friendly, expert Spanish property lawyers in the UK.
Spanish property ownership costs explained
Council Tax (Impuesto Sobre Bienes Inmuebles)
This is normally paid annually towards the end of the year but may also be paid in two halves throughout the year. The amount will depend on the location, size and age of the property.
Non-payment of IBI can lead to legal proceedings being taken against you and an embargo on the property.
Community Charges (Cuota Comunidad de Propietarios)
These are annual fees charged where the property is part of a private development. They pay for maintaining communal areas, such as the pathways, recreational space and green spaces.
The exact amount of these community fees will depend on the size of the property and the amount of water used and typically range from around €600-1,500 per year.
You should pay these, otherwise the property can be confiscated and auctioned in order to settle the debt.
As with owning property anywhere else, it makes sense to insure your property and contents. If you have mortgage, then your lender will normally require you to have fire insurance. If you live in a community the buildings are likely to be covered by a block insurance that is covered by your community fees but you will still have to take out your own contents insurance.
You will be responsible for the utility charges – electricity, gas, water sewerage, rubbish collection etc. from the time that you buy the property and should make arrangements for these to be put into your name.
Whether you are a resident of Spain or non-resident, you must declare any income you have earned in Spain. The difference between residents and non-Residents is that a non-resident only has to declare income earned in Spain whereas a resident has to declare worldwide income. This applies even if you receive this income by renting out your property to people from your home country and the money never touches Spain.
Even if you do not receive any rent from the property, it is assumed that you have received some sort of benefit and you are taxed on this (but only at 0.5% of the Valor Catastral).
You will also normally have to declare this income in the country where you are tax resident but can normally offset the tax paid in Spain through Double Taxation Treaties.
Spanish tax residence
The taxes that you pay when you buy a property in Spain will normally depend on whether you are tax resident there or not.
Tax residence is a determined by a number of factors;
- How long you spend in that country? Is it 183 days or more a year (not necessarily continuously). If so, you are likely to be tax resident there.
- Is your main home there? If it is then you are likely to be tax resident there.
- Is your immediate family (spouse and dependent children) based there? If so you are likely to be tax resident there.
- Is your main economic interest there? If so you are likely to be tax resident there.
- If you do become tax resident in a country then you will normally stop paying taxes in your home country and start to pay taxes in the new country.
- Do not be tempted to have selective amnesia when it comes to declaring taxes as the authorities in both Spain and the UK are clamping down on people who do not do not do things properly.
- Sometimes you should declare something for tax purposes in one country and also in another. Spain and the UK have a Double Taxation Treaty which means that you don’t normally pay tax twice and can offset the tax paid in the other country against the tax that you would otherwise pay in your home country.
For more information, please take a look at our guide to Spanish tax residence.
Why use Judicare for Spanish property law advice?
Spanish lawyers. Plain English advice.
Our team includes both Spanish lawyers and English lawyers who have studied Spanish law. Being fluent in Spanish and English, we can translate for you and ensure no important details are missed, explaining everything you need to know in plain English.
UK-regulated solicitors. Real peace of mind.
As a UK law firm, we are regulated by the Solicitors Regulation Authority (SRA). This means you can be confident of our standards and we carry professional indemnity insurance to cover claims up to £3million. Many lawyers in Spain are only covered up to €18,000.
Complete understanding of both Spanish and UK law
Thanks to our comprehensive expertise in both Spanish and UK law, we know all the problems that can arise where the two legal systems interact. This is particularly important when it comes to issues involving ownership, taxation and inheritance.
We are members of the Association of International Property Professionals (AIPP). This organisation exists to improve professional standards and offers assurance that we provide the highest standards of specialist expertise for dealing with foreign property.
Highly experienced expertise
With many years of experience dealing with all of the legal issues connected to Spanish property, we know the common problems you can run into (and the not so common ones) and what we can do to minimise any potential negative impact on you.
We do not act for the buyer and the seller at the same time and are not linked with any Development Companies, Builders or Estate Agents. You can therefore be assured that our advice is always truly independent, with only your best interests in mind.
Need help with owning property in Spain?
Our UK-based team of property lawyers are highly experienced in helping clients who have bought or inherited property in Spain, including dealing with ongoing costs and legal issues involved in Spanish property ownership.
With a thorough understanding of both UK and Spanish law, we can provide clear, reliable legal guidance in plain English, giving you the confidence to deal effectively with any property you own in Spain.