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Taxation of property and running costs

Once you have completed the purchase, you should change the keys and take out home insurance. Furthermore, you must notify the change of ownership to the electric company, the gas company, the water supplier, community, alarm company, etc. It is recommended that you set up a direct debit for all amenities to ensure that the services are not cut off in case of overdue invoices. You must report the purchase to the municipal tax office and the telephone company. There are many telephone providers here, find the one that best suits your needs. As a Spanish property owner you are eligible to pay the following taxes:

 

Townhall Tax ( Impuesto sobre Bienes Inmuebles , IBI ). Property Tax
This is a local tax that varies from municipality to municipality. As a basis for this tax is the assessed value of the property ( valor catastral ) . This tax is normally between 0.5 - 1.5 %

 

Income tax ( Impuesto sobre la Renta )
The income constitutes 2% of valor catastral , however, only 1.1% of this value has changed since 1994.

 

Community Fee ( Comunidad de properitarios )
The fee covers your share of the total costs of running the development you have purchased in such as Insurances, gardens and swimming pool maintenance, general repairs etc

 

 

Water, electricity , garbage collection and home insurance
These costs should be paid by direct debit ( domiciliación ) from your Spanish bank. The bill is sent directly to the bank and the amount deducted from your account. Home Insurance ( Seguro Hogar ) We can recommend reliable insurance companies. It is mandatory to have a fire insurance if you have a loan on the property where the insurance company will be the beneficiary.

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