Anual Cost of maintaining a house in Spain

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This topic contains 12 replies, has 5 voices, and was last updated by Profile photo of Anonymous Anonymous 10 years, 2 months ago.

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  • #52302
    Profile photo of Anonymous
    Anonymous
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    Hi everybody,
    Could anybody give me a rough breakdown of the anual cost of maintaining a House in southern Andalucia, whilst still living in the UK.
    Re Council Rates, Standing Charges for Water and Electicity and any
    Taxes, also possibly a low cost Security Company to keep an eye on the Property.
    We understand we need to appoint a Fiscal representative and deposit a certain amount of money in a Spanish Bank to cover these costs.
    We have not purchased a property yet, but when we do, we do not want to Let it, and would like to use it as a Holiday Home for family and friends till we are in a position to live in Spain full time.
    Thanks, Chris.

  • #66253
    Profile photo of Anonymous
    Anonymous
    Participant

    @Chris Williams wrote:

    Could anybody give me a rough breakdown of the anual cost of maintaining a House in southern Andalucia, whilst still living in the UK.
    Re Council Rates, Standing Charges for Water and Electicity and any
    Taxes, also possibly a low cost Security Company to keep an eye on the Property.
    We understand we need to appoint a Fiscal representative and deposit a certain amount of money in a Spanish Bank to cover these costs.

    Chris – the costs are obviously going to depend on where you buy, size of property etc. My most recent IBI bill (rates) was €107 for the year.
    Electricity standing charge total depends on your contracted potencia but is €1.53 per kW per month. Standing charge for water €27 per annum.
    You no longer “need” to appoint a fiscal representative as a non-resident (as it says in some out of date books) though you may want to. Your bills can all be paid by DD and a non-resident tax return is quite straightforward with info available on the AEAT website in English if need be.
    Re non-resident taxes etc I’m sure someone else will be able to help.

  • #66254
    Profile photo of Anonymous
    Anonymous
    Participant

    Of course it depends where and what kind of property it is. heating can be gas or electrcity. Bills comes every two months with full higher rate VAT
    ( i.e items listed as luxury) since when necessacities such as electricty in 21st century has become a luxury ??? perhaps I will never understand.

    ( Please read my postings EFFECIENCY OR WHAT )

    You only have to have a fiscal representative by law if you have more than one propety. It however make sence to have one, dont feel that he/she will run things ship shape you will have to nudge/remind him deal with him on routine things.i.e/ he will just be a post office receiving bad news all the time.

    There is no such thing as reasonable security company. If you can have an atttide of dealing with all the ineffciencies around and ready to pay for it even though its not your fault ( i.e. throw money at it) it would be OK.

    However if you cannot hack or go with the flow you will be very unhappy as I seen with many people.

  • #66307
    Profile photo of Anonymous
    Anonymous
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    Thanks for your replies Hillybilly and Shakeel,
    I have heard that you have to pay tax on a property for potential rental income, even though you are not letting the property, can anybody explain to me how this is worked out.
    I am trying to get a rough idea of the general costs of maintaing a house in Spain before commiting to a purchase, I know this will be dependant on the size and location of the House ( hopefully Southern Andalucia )
    I would love to move to Spain right now, but I will need a mortgage and will have to carry on work here, as wages there are pretty low there.
    I wonder if anybody knows if it is possible to get a job ( Plumbing & Heating Engineer ) as there seems to be a lot of building work going on, my Spanish is ok for general getting by, but would have to improve if working for a Spanish company.
    Thanks, Chris Williams.

  • #66309
    Profile photo of Anonymous
    Anonymous
    Participant

    Hi Chris,

    A theoretical income is deemed to arise, based (normally) on 2% of the official value (valor catastral)of any property you own in Spain that is not your main home and that is not rented out. This rate drops to 1.1% of the official value if this has been made or revised since 1994.

    Hope this answers one of your questions.

    Best wishes,

    Snowy

  • #66310
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    Anonymous
    Participant

    And is the tax due = 25% of the 2%/1.1% ?

    A

  • #66311
    Profile photo of Anonymous
    Anonymous
    Participant

    Yes – it’s taxed at a flat rate of 25%

  • #66315
    Profile photo of Anonymous
    Anonymous
    Participant

    Thanks for your reply Snowy,
    So based on 2% a property worth 300,000 euros would carry a Tax burden of 1500 euros P.A.
    If you were to let the house to family and friends for a few weeks a year, would any rental income declared on your non residents tax return, be taxed on top of the theoretical income ( 6000.00 euros ), or would it form part of it.
    Also is the official value of the property ( valor catastral ) the price declared on purchase or some other valuation.
    If it is the value at purchase it would be post 1994 and would that then be at 1.1%, thanks for your patience.
    Chris.

  • #66329
    Profile photo of Anonymous
    Anonymous
    Participant

    In answer to your first point, yes the tax burden would be 1500 euros pa.

    Where a property is empty for part of the year and rented for part of the year, you calculate the notional income for the part of the year the property is empty. The actual rental received is also to be taxed at 25% on gross income without any deductions for expenses or mortgage payments.

    The official value is the price declared on purchase.

    Yes, your notional rental income would be 1.1% of 300,000 euros, which is 3,300 euros (assuming you don’t rent your property out). This would create a tax liability of 825 euros pa.

    Hope this helps.

  • #66330
    Profile photo of Anonymous
    Anonymous
    Participant

    Chris, the valor catastral appears on your rates receipt.

  • #66331
    Profile photo of Anonymous
    Anonymous
    Participant

    Chris,

    If you do any improvement works to your property after purchasing it, as I understand it these works have to be declared which will increase the official value and hence the notional tax liability. If I ‘ve got this wrong, I’m sure someone will correct me.

  • #66334
    Profile photo of Anonymous
    Anonymous
    Participant

    Chris is right the tax is called Patrimonio is levied on all your assets reduced by mortgage etc.

    Notional Rental Income and not allowing expenses against rent is another Spanish Goverment ripping of non Spanish residents.

    I am dissapointed that the latest change in CGT would have been a good time to look into this inequality. However in a Country which likes to bite the hands that feed it. I am not surprised that this has not been done.

    What is silly is that while the Council can takes years to establish the cadasteral value the tax is due and yes you guessed it intrest and penalty along with it

  • #66338
    Profile photo of Anonymous
    Anonymous
    Participant

    Thank you both Snowy and Shakeel for the usefull information in your replies, it is much appreciated.
    I am finding this Forum very imformative and will be posting further questions, there are so many things to take into consideration when buying, thanks again.
    Chris.

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