Annual taxes and utility payments when owning property in Spain.

Owning property in Spain is not only an opportunity to enjoy a comfortable life or make a profitable investment but also an obligation to comply with financial and tax requirements. In this article, we will review the annual taxes and utility payments that every property owner should consider.

Main annual property taxes

1. Property Tax (IBI)

IBI (Impuesto sobre Bienes Inmuebles) is the main tax that all property owners in Spain must pay. It is collected by the municipality and calculated based on the cadastral value of the property.

• Tax rate: from 0.4% to 1.1% of the cadastral value.
• Variations: The tax amount depends on the region, property category, and location (urban or rural area).

Example calculation: For a property with a cadastral value of 100,000 euros, the IBI tax will range from 400 to 1,100 euros per year.

2. Rental Income Tax (if the property is rented out)

If you rent out your property, the income is subject to taxation:

• For EU/EEA residents: the tax rate is 19% on profit.
• For non-residents outside the EU: the tax is 24% on income, with no expense deductions allowed.

Example: If the annual rental income is 10,000 euros:

• For an EU resident, the tax will be 1,900 euros (19%).
• For a non-resident outside the EU, the tax will be 2,400 euros (24%).

3. Wealth Tax

This tax is only payable if the value of owned property exceeds a certain threshold, which varies by region.

• In most regions, the tax applies to assets worth over 700,000 euros (excluding mortgage debt).
• Rates range from 0.2% to 2.5%.

Tip: Check the threshold and rate in your region if you own high-value property.

4. Capital Gains Tax (Plusvalía Municipal)

This tax is paid when selling a property and is calculated based on the increase in the cadastral value during the period of ownership.

Utility payments

1. Community Fees (Homeowners' Association)

If you own an apartment in a building or property in a residential complex, you must pay fees to the homeowners' association (comunidad de propietarios).

Includes:

• Cleaning and lighting of common areas.
• Maintenance of elevators, pools, and gardens.
• Security services (if applicable).

Average cost: from 50 to 300 euros per month (depending on infrastructure level).

2. Electricity

The cost of electricity in Spain is relatively high, especially during cold months if electric heating is used.

Average cost: around 50–150 euros per month, depending on property size and consumption.

3. Water

Water bills are paid monthly or quarterly.

Average cost: around 20–50 euros per month.

4. Gas

If your property is connected to the gas network, heating and hot water may be more cost-effective than electricity.

Average cost: around 30–60 euros per month.

5. Internet and Phone

For a comfortable life in Spain, many property owners subscribe to internet and mobile services.

Average cost: around 30–50 euros per month.

6. Maintenance of a Villa or Private House

If you own a private villa, additional expenses may include:

• Garden maintenance.
• Pool maintenance.
• Building repairs and upkeep.

Average cost: around 100–500 euros per month, depending on property size and services.

Example of annual expenses calculation

For an apartment in Valencia with a cadastral value of 100,000 euros and basic utilities:

Useful Tips

• Check the cadastral value before purchasing: Taxes are calculated based on cadastral value, which may be significantly lower than the market price.
• Learn about homeowners' association rules: Some complexes may have rental restrictions.
• Budget for unexpected costs: Repairs, maintenance, and equipment replacements may require additional expenses.
• Keep all receipts: Paid taxes and utility bills may be needed for tax declarations.

Conclusion

Owning property in Spain comes with regular taxes and utility expenses that should be considered when planning a budget. Being aware of all costs helps avoid surprises and allows you to enjoy your property without unnecessary worries.