Ongoing Expenses                                                  

The Community (Comunidad de Propietarios)
Many properties are situated within a community of homeowners. The community will take care of a number of services within a development and this level of service will vary from property to property. Some of the services that are commonly included are; maintenance of the community gardens and swimming pools, lighting, security, building insurance, etc. The communities hold annual meetings during which a budget is approved by the owners for the expenses during the year. This budget is then divided between each owner depending on the size of their property. These fees are normally paid half-yearly depending on the community.

I B I (Impuesto Sobre Bienes Inmuebles)
The local council makes a charge to each property owner equivalent to local rates. The amount of this tax will vary depending on the assessed value or Valor Catastral and is paid annually - this value is often considerably lower than the real value. On a property that has changed hands recently the Valor Catastral could be 75%, on a property which has not changed hands for 15 - 20 years or more, it could be much less. The tax varies depending on the area, but on a property with a Valor Catastral of 120,000 euro you would expect to be taxed approximately 480 euros per year.

In certain cases discounts can be obtained for early payment of these charges. Your receipt of payment will reflect the amount you have paid, the year in which the receipt corresponds and the assessed value that year.

Basura
The town hall will also make a charge for the collection of rubbish from your property or development. This can be charged annually or quarterly depending on the municipality in which you are purchasing the property. In certain cases this may be included in your Community Fees. In some areas you will have to pay the Basura separately, in other areas it is included in the IBI.

Recycling Tax (Tratamiento de Residuos)
Certain municipalities will make an annual charge for the recycling of waste from the numerous glass, paper, battery banks that are distributed throughout the area. Again in some cases this may be included within the Community Fee.

Patrimonia
All non residents have to pay a wealth tax, the Patrimonia based on the amount on the Escritura Publica or the Valor Catastral, whichever is the highest value. Roughly speaking this tax starts at 0.2% on the first 156,263 euro, 0.30% for the amount from 156,263 euro to 324,547 euro and so on to a maximum of 2.5%. On a property of 150,253 euro a non resident would pay a tax of 300 euros. A resident pays nothing on the first 102,172 euros. A husband and wife when resident and jointly owning a property have a combined allowance of 204,344 euros. So they would pay nothing in Patrimonia tax on a house with a value of up to 204,344 euros,

Property Owners Tax
Only non residents have to pay property owners income tax. They are taxed at 25% of the income from your property whether or not you have a real income. The income is assessed as 1.1% - 2% of the Valor Catastral. The government have an ongoing policy throughout Spain of increasing Catastral values into line with real market values, the percentage applied to the new values is reduced to 1.1%.

This tax is actually very low, especially if you purchase for rental income. Owners should of course declare all the money they earn from rental income, and from 2002 there were new allowances to encourage owners to rent their properties.

If you are not resident in Spain, you are legally required to have a fiscal representative who is, an Asesor Fiscal will take care of everything and keep you 100% legal for a small monthly fee.

Income Tax
Residents pay only income tax on their declared income starting at 20% there are the usual tax allowances, and new ones to encourage owners to rent property.