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Costs of moving to Spain (buying and annual costs)

Costs of moving to Spain (buying and annual costs)

Old Jan 31st 2021, 9:58 am
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Default Costs of moving to Spain (buying and annual costs)

Hi - I'd really love to buy a coastal place in Spain - max 30 mins cycle from beach (budget of max €70k though) and am trying to find out what additional costs are involved. I've read to factor in an extra 10-15% over the house price (for VAT/ITP/ADJ/estate agency fees, valuation costs, notary costs, Spanish Land Registry fees, legal fees ) plus money for furnishings ?

In addition to this, what would you reckon is an average cost of a property per year for maintaining (again, I'm reading that there's property ownership tax/IBI . I was thinking of letting it out / air bnb but I see there's a lot of costs involved in this (25% income tax, key holder/management company, cleaners, utility bills). For those who do let out their property, how does it work for you and would you recommend it?

It seems to be a bit of a minefield (then again buying property anywhere probably is) and in my head I'm trying to figure out if it's easier and cheaper to just rent places whenever I want to go to Spain given all the costs involved - my head says rent / my heart wants to own a property. My ideal is to have a bolthole to pop over for long weekends, kids mid-term and summer holidays if possible - ultimately to retire to (though my contract states I retire at 70 !! so who knows)

Any thoughts / info / guidance would be really welcome.

Many thanks
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Old Jan 31st 2021, 10:48 am
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Default Re: Costs of moving to Spain (buying and annual costs)

Yes allow 12-15% on costs for purchasing.

Lots of recent discussion on running costs here Is my move realistic?

To be honest I would advise you to rent.

Now (assuming you are non-EU) UK has left EU costs of both ownership and renting out have risen as you cannot benefit from EU allowances for EU citizens.

Worth a look here https://www.gov.uk/guidance/how-to-b...perty-in-spain

Good luck.
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Old Jan 31st 2021, 11:02 am
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Default Re: Costs of moving to Spain (buying and annual costs)

Financially it is probably safer & cheaper to rent, but it is really nice to own, furnish and decorate your own home.
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Old Jan 31st 2021, 11:31 am
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Default Re: Costs of moving to Spain (buying and annual costs)

You would be able to find a small apartment in Alicante region about 50 m square for about 65 to 70 thousand and about 30 min walk to beach. It would be a second hand one and about 15 years old and in an ok area. Add on about 10 % for all tax, fees, lawyer etc. So tops about 77 approx. Renting involves work and costs and an old apartment with tops 2 small bedrooms wont get a premium price but might cover some costs. Yearly costs would require wifi fof renting so yearly contract plus non resident tax which is higher now out of EU. Unless you were sure you would qualify to retire in Spain when you do it might be better to just stay a tourist and rent. Bear in mind that cheap properties rarely increase in value so expect a small loss or lucky break even if you ever sell. Good luck
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Old Jan 31st 2021, 11:55 am
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Default Re: Costs of moving to Spain (buying and annual costs)

We live inland of Albir, Altea, Benidorm and these can all be reached within 20mins by car or bus. Its about 12km max so it can be cycled as well.

2 bed 1 bath properties go for around 65k here and you will need the 10% tax to pay.

Before you progress with this please read this thread. While its a horror story, it is however true and explains what may (can and does) happen when you are an absentee landlord.

Tenant Eviction Nightmare -Part 2

As to the rental tax. Its now 24% of 1.1% of the government valuation of the property, here in the Alicante area (used to be 19%) (and then you have to pay a % of the rental income) but you can no longer claim any of the expenses like the agents fees anymore (joys of the UK being a 3rd country now)

There is about 60% second home and rental in the village we are in and over the last 3 weeks at least 6 have gone on the market.
Also cost, we purchased a 3 bed 2 bath top floor (there are only 3 anyway) for 78k euros in 2019. The original owner who sold it to us paid 92k euros in 2005.
If anything the prices have come down slightly since we purchased and you have to factor in a 10% tax on the purchase. Plus other costs, we paid around 800 euros for the solicitor, notary and all the other bits.

Also rental at the moment to holiday lets is zero. So you would not be getting anything back on your investment.
I doubt very much that things will improve here significantly in the next couple of years either.

My advise would be to have a few long holidays in the different areas to see where you like best (make sure you come over here in the winter cause things can be totally different) and leave it a few years to fully decide.

Stick extra money in your pension, maybe you can retire earlier.
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Old Jan 31st 2021, 12:17 pm
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Default Re: Costs of moving to Spain (buying and annual costs)

Thanks a mill - will also have a look at that link now. Cheers
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Old Jan 31st 2021, 12:21 pm
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Default Re: Costs of moving to Spain (buying and annual costs)

Barriej, Chipmonk, Misslie & Spainrico - many thanks for the info and advice. It does seem the best thing to do is rent (my heart is a a little crushed (albeit temporarily) but better for that now than to be living with regret for a long time). Very good idea to use the money to invest more in the pension now so I can retire earlier and I guess with the market likely to remain static for some time, I shouldn't look to rush into things either. Really appreciate your feedback, guidance and suggestions - really helps to keep me clear on what I should do and will save me money and pain down the road. Many thanks
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Old Jan 31st 2021, 12:24 pm
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Default Re: Costs of moving to Spain (buying and annual costs)

Originally Posted by Chipmonk
.... Add on about 10 % for all tax, fees, lawyer etc. ....
When I purchased it was 7% and 11% purchase tax on new and resale respectively. In addition there were legal, EA & Notary fees.

See here> Property taxes in Alicante, Spain. - Abbey Properties S.L.If I buy a property in Alicante, Spain, what taxes are involved in the transaction?

The purchase tax on new property is that of 11% of the full amount payed at that time.
The purchase tax on resale property is that of 10% of the rateable value (house purchase price ).

for All transactions of sale and purchase on property in Spain would require Notarization and inscription in the land registry of the town where the property is purchased or sold, this cost is another 1% approximately 1.400-1.600 euros average.
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Old Jan 31st 2021, 12:33 pm
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Default Re: Costs of moving to Spain (buying and annual costs)

As with everything it's a lifestyle choice but I personally would not want to let our property and the main reason for buying was to have a place of our own. Otherwise I wouldn't see the point and with more taxes and restrictions related to airbnb, you'd be better off booking luxury hotels and saving more money back home to buy later. Another thing to consider is that Spain is very different at certain times of the year, so noise levels in apartments can be a big issue. This is why we went for a smaller detached house a few mins inland rather than the apartment block next to the beach. I can book a different hotel next year but I'm stuck with the property. Overall it's great to have a place, though I would recommend to think long term and explore different areas. Apartments can be fine too but you really need to check the soundproofing.

Last edited by Moses2013; Jan 31st 2021 at 1:12 pm.
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Old Jan 31st 2021, 1:22 pm
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Default Re: Costs of moving to Spain (buying and annual costs)

I wouldn't buy in Spain simply because of Brexit. With free movement one could basically come and go with relative ease so buying a place first for holidays and then moving to live here during retirement was a nice thing to do. Now the idea of being limited in how much you might use a place plus a reduction in your rights to free movement makes it kind of like a time share. Plus it can be hard to sell standard properties and therefore they are not really an investment. I would ne more content to rent and move around for holidays
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