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A Guide to Spain - The Value

Living in the Sun - International Property Sales

Information kindly provided by Living in the Sun -

The Value
Great value for money throughout the Spanish peninsula, so no wonder it's so popular -  with an easy journey to and from the UK. Prices in Spain cross everyone's budget , and there is something for everyone, from the luxury  villa in it's own private estate, through investment properties, to apartments that everyone can afford. 

The Costa Del Sol has it's exclusive areas, where you may find yourself rubbing shoulders with the rich and famous. Here you can live the life of your dreams, knowing that all your needs are provided though the excellent infrastructure of the area.  

The Costa Calida is no less popular, and though  less patronised by the jet-set, it does as a result offer real value for money in a rising property market.  The Costa Almeria is perhaps more suited to those looking for a little more tranquility, with a chance to absorb the more traditional Spanish culture. 

Whether you want a rural idyll on a huge finca, a luxury villa, or an apartment on the beach, Spain will fulfill your dream , whatever you are looking for.

Purchase Procedure International Removals Taxes and fees
House Running
Letting Income Investment


Annual costs for running a typical 2 bedroom villa in Spain are considerably lower than in the UK

Our research has shown that average annual running costs for a property costing about £70,000  would be as follows

Electricity £240.00  
Water £120.00  
Rates  £100.00  
House & Contents Insurance £200.00  
Community Fees  £  75.00  

Total £ 735.00

Property values in Spain are continuing to rise ahead of inflation. According to the company Salvago Tres, when you analyse the rise in terms of size of the plot occupied, the cost per each square metre rose by 134.4 euros (22,364 pesetas) throughout 2001 compared with 101 euros (16,836 pesetas) in 2000.  The highest rise was in the city of Malaga, where the figure went from 1,039.4 (172,946 pesetas) per constructed square metre to 1,232.5 euros (205,074 pesetas), an increase of 18.5 per cent. The figure for Torremolinos, was similar and five percentage points above the average for the whole of the province of Malaga, with a figure of 13.4 per cent.  
 Forecasts for this year are that prices will continue to rise.  

Stamp Duty - there is no stamp duty threshold as in England and you will be required to pay at the appropriate rate based on the price of the property.

7% VAT (IVA) is payable on the declared value of Spanish property purchases.

Plus Valia - This tax is paid to the local authority and is a form of Capital Gains Tax payable on the increase in value of the land ( not any buildings erected on it) since the last purchase. The obligation to pay this tax falls on the vendor but he may try to make the Purchaser pay it. Be careful if the contract refers to the purchaser paying “ todos los gastos” ( all the expenses of transaction)

Community Fees  - properties in Spain with common elements shared with other properties are owned outright through a system of co-ownership. Almost all properties that are part of a development (urbanizacion) are community properties. Owners of community properties not only own their own homes, but also own a share of the common elements of a building or development including foyers, hallways, passages, lifts, patios, gardens, roads, swimming pools & other leisure facilities.  

Your legal adviser will ensure your community fees are at the going rate.    

Mortgages - in recent years Spanish mortgages have been amongst the most competitive in Europe and interest rates are currently around 4%.

To obtain a mortgage from a Spanish bank  you must usually provide proof of your monthly income  & outgoings such as mortgage payments, rents & other loans or commitments.

 Spanish mortgages can be arranged for acquisition, renovation & construction. Due to the nature of financing new properties a "letter of intent" is issued by lenders rather than a mortgage offer until the property is completed. All mortgages should be fully repaid by the age of 70. Spanish Banks will happily offer a mortgage of up to 70% of the purchase price of the property, though 50% and 60% are standard. Repayment periods are 5, 10 or 15 years as standard.

If you have equity in an existing property, either in Spain or elsewhere, then it may be more cost effective to remortgage on that property, rather than take out a new mortgage for a second home in Spain. It involves less paperwork and therefore lower legal fees.

Whether you need a mortgage or not, you will certainly need a bank account to receive and transfer funds on effecting the purchase of your property and later on to pay the usual rates and bills. Direct debits are widely used to pay such outgoings.  

Purchase Procedure

Having chosen your property you will need an English-speaking lawyer to help you through the process. As in England, the agreement to purchase will be contained in a private contract. The document should contain details of the agreed price, payment of a deposit, provision for payment of the balance, any extras that you have agreed to purchase and the intended date of completion, together with all other relevant terms & conditions.

The “subject to contract” conditions that apply in England do not apply in Spain. Once you have paid your deposit (usually 10%) then there is a binding agreement between seller & buyer. A specific agreement (arras) may be entered into between seller & buyer where either party may rescind the contract, the seller returning double the deposit or the buyer losing the deposit.

You will need a notary (el Notario) to prepare the Conveyance (la Escritura) from the information supplied by the seller or his/her lawyer (el Abogado). Before the visit to the Notary, a check should be made against the property to ensure that no adverse entries have been made beyond those disclosed. Once the formalities have been completed in front of the Notary, the Escritura Publica must be delivered to the Land Registry for title to be recorded in the Register of Property (Registro de la Propriedad). The sale & purchase of all property in Spain must be registered with the Land Registry.  

The property must also be recorded with the relevant municipality in which it resides for purposes of the annual Real Estate Tax (known as "Impuesto sobre Bienes Inmuebles" and often called IBI - pronounced "ebe"). The level of this tax varies within municipalities and is calculated on the basis of officially set land values. The level of this tax can be checked by your lawyers early in the process if you wish.

The total expenses incurred in the purchase price should not, on average, come to more than 10% of the purchase price.  

International Removals

Moving to Spain is probably much easier than you imagine. Prices vary but a typical charge for moving the contents of a typical 3-bedroom house would be £2000.

Many larger removal companies have on site storage facilities in Spain if necessary.

Think long & hard about what you take with you. You will want personal items & family heirlooms, but the cost of shipping many household items can be uneconomical. Why pay to ship old fridges, cookers and heavy furniture when the cost of new Spanish equipment may only be slightly more expensive.  Spanish prices are good and the quality excellent.  

Think about style too. Is that heavy brocade 3 piece suite or that reproduction going to look right in your new Spanish home? White walls and marble floors are the norm in Spain and local stores offer the kind of furniture that suits Spanish décor. Prices are good and quality excellent.

Provided that the furniture and goods you are taking to Spain are for your own use, there are few restrictions. Specialist carriers will be able to help and advise -  we will be happy to make recommendations.

Many of the larger Removal Companies have on-site storage facilities in Spain and, if your property is not yet ready for occupation, your belongings can be stored in Spain prior to onward shipment to your new home.

Taxes and Fees

If you own a holiday or second home in Spain you can employ a local accountant or tax adviser as your fiscal representative to look after your financial affairs including declaring and paying your local taxes.  

All residents & non residents foreigners with financial affairs in Spain must have a foreigner’s identification number called a Numero de Identificacion de Extranjero (NIE). You can apply for an NIE at any national police station with a foreign department.  

Spain has made a major design change in its income tax system to take the country into the new millennium. A lot of the rates have dropped, especially for low incomes. The Spanish tax ministry, which is known as the Agencia Estatal de Administración Tributaria, but still called "Hacienda" by many, has been making the tax-payer's burden a lot easier, as it is now a lot more user-friendly, but this does not mean that Big Brother is not watching you.  Let's take a look at your possible tax obligations in Spain. When you stay in Spain for 183 days or more in one calendar year, you become legally liable for Spanish income tax, whether you are a formal resident or not. When you take out a residency, you become liable on your total worldwide earnings, although regulations provide relief on double taxations. (Pensioners who have paid tax on their income in their home country do not have to pay again in Spain) Even if you are not a resident of Spain and spend less than 183 days in the country, you are still liable for income tax on any Spanish income you might have, such as letting out your flat. You can read all about these principles in a Spanish Ministry of the Treasury booklet, called Taxation Regulations for Foreigners. (Publication F-9)  

If your worldwide income is more than € 7.225 per year you will have to make a tax declaration. It is best to consult a tax adviser, either an asesor fiscal or a gestor. They will charge you a fee from € 60 up, depending on the complexity of your tax return. If you are a resident and you have two homes in Spain you will have to pay the property owners imputed income tax, where 2% of the value of your 2nd home is added to your income. You will then have to pay income tax on the total. If you are not a resident you will have to pay this tax on your 1st home. On top of this there is the patrimonio tax, which is the wealth tax. Residents and non-resident property owners are liable for this. Up to € 161.380 this is only 0.2 % of the value of the property. When you sell your property and you are a non-resident, you will have to pay 35% on the capital gains from the sale of the property. As a resident you are liable for this tax as well, but there are a couple of breaks. If you reinvest the money in another property as your principal residence, you will get relief from this tax up to the amount reinvested. The remainder of the profit will be taxed as an incremento de patrimonio, a capital gain, as part of your income. The maximum percentage, however, cannot exceed 20%. In order to make sure that the non-resident property seller actually pays his capital gains tax, instead of taking the money and running, Spain has put into force a requirement that 5% of the declared purchase price must be deposited with Hacienda when a property is sold by a non-resident. As a last note: Use expert advice at all times, so you avoid disappointment and fines by the government.  

Duty Free

In accordance with European ruling, as from the 1st of July 1999, duty free allowances on imports into EU countries ceased to apply on goods bought within the EU. There are no restrictions on the import of duty paid goods into Spain, provided they are for personal consumption. This does not apply to goods purchased outside the European Union.  

House running Costs

You will need to sign a contract with the local electricity company. Some electricity companies have English-speaking telephone lines.

Most Spanish plugs have 2 round pins, possibly with an earth built into the plug, although most sockets aren’t fitted with earth contacts. Sockets in modern properties may also accept 3 pin plugs (with a third earth pin), although few appliances are fitted with 3 pin plugs.

If you bring electrical appliances with you, you will need new plugs (enchufes) or a lot of adaptors.

Expect annual electricity costs to be typically £240.00  

Mains gas is available in major cities only but bottled gas can be delivered to your home.

Heating costs will be considerably less than you are accustomed to because of the temperate climate.  

Water is a precious commodity in Spain so care should be taken not to waste it. Supplies are metered but charges are only approximately 50% of those in the UK  

The cost of living is considerably cheaper than in the UK.  Spain does not experience a winter, as we know it in the UK so there is no need for heavy winter clothing or heavy winter fuel bills. The reduction in expenditure with regards to these and the low rateable values on Spanish properties is very significant.

There is an abundance of fresh fruit & vegetables throughout the year as well as an excellent range of fish sold daily in the local market at prices much cheaper than in the UK. A bottle of beer will cost between 55p-75p, a glass of wine less than £1, and you can have a delicious 3 course meal for two for between £15-£20. A litre of petrol costs about 50p.  

Letting Income

The peak rental season lasts from June to September but there is a market for off peak lets.  Income from your property will vary according to size, position and amenities. To maximise rental income a property should be located as close as possible to the main attractions, usually the beach, be suitably furnished and professionally managed. A swimming pool, either private or shared, is a big asset. Approximate rental income might be as follows  

Per week

1 bedroom

2 bed apartment

2 bed villa

Detached villa with pool
















Furnish inexpensively – things will get accidentally broken. A high chair for infants is useful. For higher income include things like dishwasher, microwave oven, satellite TV. You will need several sets of spare keys.

An important decision is whether to let it yourself or use a letting agent. If you don’t have much spare time then you’re better off using an agent who will take care of everything and save you the time and expense of advertising and finding clients.  


We also cover business premises, as well as advising on investment potential - a deposit secures an unbuilt house, and selling before it's completed will release the price increase as profit on the deposit, rather than the whole sale price, which can be significant. Subject to the market movements, this can bring good rewards for relatively small outlays. Always take advice first.

At present the market is rising at around 10% per year, and has done so consistently for some time. A deposit of £66,000 on a £200,000 house which is then sold a year later just before completion at a 10% increase in price will give a profit of £20,000. That gives a return of 30% on the deposit!!   All dependent on finding a buyer at the right time (which we can help you do) and how the market is going at the time, though consistent price rises have been the norm for a long time



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