Annual municipal real estate tax or IBI
(IBI = Impuesto sobre Bienes Inmuebles).
This is because the cadastral value (valor catastral) is the tax base for the municipal property tax. The base rate for IBI is a percentage of the cadastral value of the property in Spain (0.4-0.9%). (depending on municipality). For a 2 bedroom-2 bathroom apartment in Estepona, this currently averages € 750,00 annually.
Garbage tax (Basura).
Garbage bag collection service (Basura) and sewerage charges. For a 2 bedroom-2 bathroom apartment in Estepona this currently averages € 100,00 euros annually
Community fees (Cuota de communidad).
You need to pay monthly service charges (community fees) if you buy a house or apartment in an “urbanization”. These are usually paid monthly or quarterly. These fees cover such things as building maintenance, cleaning, security, management, gardens, pools and facilities. For a 2 bedroom-2 bathroom apartment in Estepona, this currently averages € 2,100.00 annually
(or € 175.00 month).
Energy and water costs
Electricity supply is regulated through “Endesa”, the local energy company. The balance is taken monthly or bi-monthly. Electricity bill of course depends very much on your consumption and whether there are solar panels installed. For a 2 bedroom-2 bathroom apartment in Estepona this is currently on average € 125,00 / month.
Water costs are similar, although water is cheap in Spain and in many urbanizations included in the service costs.
Rental income (also if not rented out)
IRPF (Impuesto sobre la Renta de Personas Fisicas).
Only for non-residents: The Spanish tax authorities tax foreign homeowners with a kind of “rental value lump sum”. You must declare 2% (*) of the cadastral value (valor catastral) for Spanish income tax purposes. 19% tax on this amount will be charged.
(*) 2% for homes > 10yrs old,
1.1% for more recent or newly built homes.
For a property of € 500,000 this is about € 1,000 / year.
If you rent out the property you will pay income tax in Spain on the rental income instead of the fixed rental value. When renting out, you must pay 19% tax on the rental income. Costs incurred for the rental property are deductible, but limited. Expenses are deductible in the proportion that you rent out the property, so when renting for 100 days, 100/365 of the expenses are deductible.
Building and contents insurance.
Building and contents insurance. Ask for a quotation from a Spanish insurance company, such as Mapfre or Hypotienda (NL). Insurance is usually much cheaper than in Belgium, the Netherlands, France, etc.
Wealth tax (Impuesto sobre el Patrimonio)
The wealth tax was reintroduced from 2011 for individuals with assets over € 700,000. It is a progressive tax based on the value of assets. The rate climbs from 0.24% to 3.03% (in Andalusia).
Abrogated : With the last exemption (2023), Andalusia will become the second region in Spain to abolish the wealth tax. It thus follows in the footsteps of Madrid, the only other part of the country where no wealth tax exists!!!
