What are the running costs of a property in Spain?

Taxes

The first tax to be paid is the property tax, which is payable annually. It is paid to the municipality and is assessed according to the cadastral value, which varies from municipality to municipality. You can expect about 0.4% to 1.1% of the cadastral value. The cadastral valuation takes into account both the value of the land and the value of the building, depending on the type, location and use.

Those who use a property on Mallorca themselves must also pay a simplified income tax to the Spanish tax office. Own use is assessed for tax purposes as fictitious rental income. A fictitious use value of either 2% or 1.1% of the cadastral value is assessed. This depends on whether the cadastral value was assessed before or after 01.01.1994. Income tax is payable on 24% of this assessment basis.

Both residents and non-residents are subject to wealth tax. The amount for residents is determined on the basis of the worldwide net assets existing on 31 December of each calendar year. Non-residents, on the other hand, have a limited tax liability, which means that the tax is only levied on those goods and rights that are used in Spain. Real estate is exempt from wealth tax up to a value of EUR 300,000, and other assets have an exemption amount of EUR 700,000.

Ongoing costs

In addition to recurring taxes, there are also running costs such as water, refuse collection, energy, insurance and maintenance of the property.

The municipal fees for refuse collection are set by the local authorities depending on the property and are due every six months. Approximately EUR 150 to EUR 180 can be expected for a flat. For a larger villa, you have to calculate accordingly more.

If you hire a domestic helper as a full-time employee, you can expect a salary of between EUR 900 and EUR 1,400, plus about EUR 160 for flat-rate social security. Part-time helpers, on the other hand, are paid on an hourly basis at an average of EUR 10 to EUR 15 per hour.

For gardeners working on an hourly basis, the average is about EUR 15,- to EUR 20,-. The salary of a full-time gardener is about EUR 1,100 to EUR 1,400 per month plus about 40% non-wage labour costs. For flats and terraced houses, the maintenance of the communal gardens is part of the communal costs.

Water consumption is charged every three months on the basis of the water meters, while electricity is charged every two months. However, a basic amount is always charged - even if the property is not being used. The calculation of this basic amount is based on a factor of electricity consumption that could theoretically be achieved if the property consumed energy at full capacity.

Contributions to the homeowners' association

A condominium owners' association is a so-called association of persons formed by the owners of the flats within a building or the owners of the houses within an apartment complex. This association is responsible for the ownership, maintenance and upkeep of the components of the common property of a building or housing complex. The costs incurred are divided up on a percentage basis. In addition, a budget for the community's annual expenses is set at an annual owners' meeting. This includes the salary and social security of the caretaker, maintenance of the gardens, maintenance of the lifts, building repairs, refuse collection, water costs for watering the gardens, electricity costs for lighting the communal areas, building insurance, security control system and administration costs.