Let’s break down in detail the list of expenses for property maintenance in Spain.

Utility Payments

1.1. Payment for common area maintenance (groundskeeping, pool cleaning) typically ranges from 10 to 160 euros per month, depending on the location, the size of the apartment/house, the presence of a pool, and green areas.

1.2. Garbage collection fee amounts to 21.36 euros (twice a year).

1.3. Electricity payment: The municipal electricity supply service issues monthly bills with two components – a fixed fee (around 12-16 euros per month), independent of actual usage, and a variable fee based on the number of kilowatts consumed. The cost per kilowatt is approximately 0.15 euro cents.

1.4. Water payment: The water supply service bills are issued quarterly (every 3 months) and consist of a fixed subscription fee (approximately 13.28 euros once every three months) plus the actual volume of water consumed. The cost per cubic meter of water is about 0.55 euro cents.

Taxes

2.1. Property Ownership Tax (Impuesto Sobre Bienes Inmuebles or IBI): This is an obligatory annual municipal tax. It is paid once a year. The final tax bill depends on two factors: the cadastral value of the property and the tax rate in each municipality. The cadastral value is determined based on various parameters such as the building’s age, condition, geographical location, etc. In our region, the tax rate is 0.45% of the cadastral value.

2.2. Non-Resident Income Tax in Spain (IRNR – Impuesto sobre la Renta de No Residentes): This tax is paid regardless of whether the property is rented out. The calculation of this tax depends on several factors, including the building’s age, condition, and location. Roughly estimated, it’s about 0.5% of the cadastral value. The exact calculation is done as follows: first, you need to determine if the property has been reassessed in the last 10 years. Then, you multiply the cadastral value by 2% (if the property has been reassessed) or 1.1% (if it hasn’t). Next, you subtract 24% or 19% (only for European Union citizens) from the resulting amount, and that is the sum to be paid.

2.3. In the case of renting out the property and generating income, you need to pay income tax, which is 24% for non-residents and 19% for non-residents who are citizens of the European Union.

2.4. Wealth Tax: This tax is paid by both tax residents and non-residents in Spain. For tax residents, it applies to all assets, while for non-residents, it only applies to assets located in Spain. However, it’s important to note that this tax is only payable when the total value of assets in the Valencian Community exceeds 600,000 euros. The tax is calculated on a progressive scale ranging from 0.2% to 2.5% of the asset value.

Other Optional Expenses

3.1. Payment for Internet and TV services: On average, this amounts to 20-25 euros per month. Additionally, some providers offer flexibility where you can select which months you want to use the internet and pay only for those.

3.2. Property insurance: The annual cost depends on the type of property, typically ranging from 150 to 350 euros per year.

3.3. Cleaning services: The average cost for one hour of cleaning is around 10 euros.

Is it profitable to invest in Spanish real estate? What type of property should you choose for investment, and in which region will your investment be most profitable? Let’s delve into these important questions in our article. So, here are the options:

Commercial Real Estate
Statistics indicate that in 2018, one of the most profitable investments in Spanish real estate was purchasing commercial properties and renting them out, with a profitability rate of up to 8.9% annually.

Leasing commercial spaces can generate an 8% return, while investing in garages for subsequent rental yields about 5.6%.
The profitability of commercial real estate investments, such as spaces for shops, bars, restaurants, and various agencies, varies from region to region, generally staying high. For example, it ranges from 6% in Castellón to 10.6% in Zaragoza.

On the Costa Blanca coast, this percentage is notably high, reaching 8-10%, depending on the city or region.

Regarding investments in office spaces, the profitability rate is slightly lower, ranging from 5.6% in Murcia to 7.9% in the capital of Tenerife. In Alicante, this figure stands at approximately 6%.

Residential Real Estate
Investing in residential properties, such as apartments and houses, remains one of the most popular and profitable options in Spain. The average profitability varies across the country, from 4.9% in La Coruña (Galicia) to 8% in Tenerife and Gran Canaria. On the Costa Blanca (Alicante), this rate ranges from 6% to 11%, depending on factors like location, proximity to the sea, property quality, and freshness, among others.

In recent years, the province of Alicante’s coastline has become one of the most popular destinations for residential real estate investments in Spain. The high profitability here is due to the relatively lower property prices compared to other regions along the Mediterranean coast of Spain, the mild climate with warm, sunny winters and not overly hot summers, and constant demand for both seasonal rentals and year-round purchases in most coastal resorts of the Costa Blanca, including Torrevieja, Benidorm, Alicante, Calpe, Orihuela Costa, and more.

Land Investment for Construction
Traditionally, purchasing land for construction is considered a profitable investment. However, the cost of plots can vary significantly depending on their location and building potential. Evaluating the percentage of profitability for such investments is challenging as it depends on numerous factors such as the demand for rental (or sale) of villas and houses in the region, the size and building capacity of the land (some allow multi-story buildings or multiple villas, while others have limitations), and more. To assess potential benefits from land investments, professional real estate agents specializing in land sales are essential.

Buying Property During the Construction Phase
Investing in real estate during the construction phase is another lucrative option, as initial prices are significantly lower than after completion. The key is selecting the right location and construction company. Knowledgeable professionals can help you choose the area, city, and the reliability of the construction company, providing a deeper insight into potential returns.

Economists suggest that currently, investing in commercial and residential real estate in Spain is more profitable than traditional methods, such as bank deposits. If you’re looking for a sensible way to invest your funds in Spain, particularly on the Costa Blanca, feel free to reach out to our real estate agency, EspanaTour. Our experts will help you choose the most profitable investment method, property, and city. Our legal department will conduct all the necessary checks and prepare the transaction documents. Our team will assist with organizing your stay, transfer, comfortable apartment rental, and provide excursions and introduce you to the delightful Spanish cuisine at the best restaurants on our coast!

Contact us, and we will help you achieve maximum returns from your investments!

Today you will learn how much money a family needs to earn to live comfortably.

We will discuss the most expensive and cheapest cities in Spain, particularly on the Costa Blanca, as well as prices for real estate when buying or renting, utility costs, expenses for food, healthcare, schools, and also talk about the costs of owning a car.

In our analysis, we will include the most well-known cities for living: Barcelona, Malaga, Benidorm, and Torrevieja.

REAL ESTATE COSTS.
In Barcelona, there is no cheap real estate. The cheapest apartment in old neighborhoods with one bedroom and no renovation will cost you between 100,000 and 130,000 euros. A decent two-bedroom apartment in a good area but not in the city center will cost you around 300,000 euros.

In Malaga and Marbella, prices are more modest. An apartment with two bedrooms and two bathrooms in a complex with a pool and close to the sea will cost you 250,000 euros. But you can also buy an apartment on the outskirts for 100,000 euros.

On the outskirts of Valencia and Alicante, you can buy an apartment in a building, for example, built in 1980, for 40,000 euros, and this is a real possibility. In the city center, the cost is much higher, around 100,000 to 200,000 euros.

In Benidorm, you can buy an apartment within walking distance of the beach in a complex with a pool for 150,000 to 250,000 euros. A similar apartment in Torrevieja will cost between 100,000 and 200,000 euros. But you can find a good apartment for 70,000 euros.

When it comes to renting in Spain, it’s not so easy to find long-term rentals. The average monthly rent in Spain is around 300 to 600 euros.

MORTGAGE IN SPAIN
In Spain, foreigners can get a mortgage at an interest rate of 3-5%. You only need to have 40-50% of your own funds, and the desired apartment will be yours.

HEALTHCARE
Only Spanish residents who work, or those with family members who work, can receive free medical care. Then, the entire family can go to the clinic for free, and the government covers 80% of prescription drug costs.

But if you come here for leisure or just to live and not work, you need to get private health insurance. The cost starts from 50 euros per month.

SCHOOLS
Schools in this country are mostly free for all children, regardless of whether their parents are legal residents. Your children will be admitted to school either way.

There are also private schools with different emphases. The cost varies from 500 to 1200 euros per month. These are mainly English schools.

TRANSPORT
In some provinces and cities, such as Torrevieja or Orihuela Costa, local residents get free public transportation. But paid fares are affordable for many. For example, a monthly pass for all types of transport in Barcelona will cost around 50 euros.

In Valencia, it’s about 30 euros per month.

Taxi fares vary. For example, from Benidorm to Alicante Airport, the fare will be around 50-60 euros, while a taxi within the city costs 5-10 euros.

AUTOMOBILE
On the second-hand market, you can buy a five-year-old car for 5,000 to 8,000 euros, slightly more expensive than, for example, in Germany. However, car insurance is not cheap. For example, insuring an eight-year-old Citroen C-class car will cost around 800 euros per year. You can find insurance for 500 euros as well. But fuel is the cheapest in Europe.

UTILITIES
The cost of one kilowatt-hour is 20 euro cents.

The cost of one cubic meter of water is 55 euro cents.

The cost of community fees (grounds maintenance, pool cleaning) is approximately 10 to 160 euros per month, depending on the location, apartment/house size, pool, and green area.

The cost of the internet varies from 20 to 40 euros per month.

Mobile phone service is very affordable. For example, for 10 euros per month, you get 1000 minutes plus internet. If you sign a contract for, say, 20 euros per month, you get unlimited free calls within the country, and when you’re in Germany, you won’t have to pay for roaming.

GROCERIES
There’s much debate about this. A family of three can live on 250 euros per month, but some may need 1000 euros.

Prices for essential products:

Meat: 3.5 – 4.5 euros per kilogram of pork; a whole chicken can be bought for 4 – 5 euros.
Red fish: 8-12 euros per kilogram.
A dozen eggs: 2 euros.
Potatoes are best bought at the market, where they cost 39 cents per kilogram.
Pasteurized milk in paper packages costs 60 – 90 cents, while fresh milk from the fridge will cost 1.3 – 1.6 euros.
Bread: 70 – 80 cents.
Fruits and vegetables in Spain are of high quality, always ripe, and sold for as much as they can sell, starting at 30 cents per kilogram.
Products in Spain are not expensive and are accessible to all.

TRAVEL
In Spain, plane tickets within Europe are inexpensive. For example, if you buy tickets two months in advance, they will cost you 20-30 euros one way. Of course, travel within the country is much cheaper. For a family of three, a one-week vacation, including hotel and entertainment, will cost around 1500 euros.