Looking to buy holiday let which will eventually become permanent home.

GrahamLynn wrote on Wed Apr 26, 2023 7:52pm:

 I think you will need to do a bit of research, before purchasing. 

Bills to expect

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IBI Is  what you know as council tax Payments obviously vary as to the size of house and are set by the ayuntamiento (town hall) in your municipality.But generally much cheaper than in the UK. 

For instance if I moved my house 2 km done the road into the neighbouring municipality, my IBI would be less than half what I currently pay, but even so the figure is about 20% of what I’d be paying if I still lived in the UK. 

Basura is a payment for the collection of rubbish again collection and amounts vary by municipality.

You have charges for internet  and for whatever TV system you decide you want.

Obviously again you have electric and water bills. Mains gas is only available in a few areas, but calor gas can be used for water or heating if that’s what you decide.

On top of that if you live on a community you have community fees to pay. They can vary enormously, depending on the size of the community and what facilities you have. For instance if you have a garden around your pool, your community fee would include payment for the gardens. If it’s a high maintenance garden and only 10 properties then the cost will be much higher than the same communal area shared by 60 properties.eg Garden fee 200€ per month divide by 10 or 200€ per month divided by 60. 

If you have your own pool, you will need someone to look after your pool on a weekly basis, even though for the vast majority of the year , it’s too cold to use. It can be an expensive garden ornament. 

You may need to consider a security system if you’re not here full time and appoint someone to be a key holder to check on your property.

As well as someone to clean after guests have left and prepare for the new guests and be on hand to welcome new arrivals etc.

People buy holiday homes to be near the beach and bars, but do you want the noise from the bars and noisy holidaymakers if you live here permanently. So choose wisely, especially as your have to pay a 10 % purchase tax when you buy your property. You need to budget another 3-4% on top of that for legal fees when you purchase. So a 100k house will in real terms cost you 114k. 

If you want to rent out your property even to friends and family, you need to obtain a license to enable you to do so. That sounds easier than what it is. Some areas don’t issue licenses and others you can be waiting up to 18 months to obtain your licence. All visitors to your property have to notified to the guardia and the income has to be included on your non resident tax return. Most people employ an accountant to prepare their tax returns for them, especially recommended the first year. 

if you are only planning on spending 5 weeks a year in your holiday home, I honestly wouldn’t think it would be worth the hassle. The running costs per annum would cost more than spending 5 weeks in a 5 star hotel and Spanish properties rarely increase in value - even if they do you have to pay tax on the increase when you come to sell the property.

I love my lifestyle here and it feels awful, putting someone off, but I think you really need to sit down and do the maths.

Good Luck

Lynn

AndyArnold78 wrote on Wed Apr 26, 2023 6:13pm:

Hello 👋 

Me and my partner are looking at buying a holiday home that we will eventually retire too and was hoping to get some advise around running cost of a property we will only live in for 4/5 weeks per year initially. We would look to let the property to friends and family so would be vacant for over ...

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...half the year?

The things that we have to consider are the running costs of the property. I know it’s difficult for you to put an exact figure on it but what would you think the average running costs are for the property in terms of gas/electric, maintenance/ground fees and any other costs like equivalent council tax if that’s such a thing in Spain or any other costs we might need to be aware of such as purchase fees equivalent to stamp duty we have in the Uk. 

As it’s a second home I’m aware from some research on the internet that a tax has to be paid even if the property isn’t let and if let 24% tax has to be paid on the income?? How does this get paid? Sorry I know there is a lot of questions but it’s all things we have to consider when deciding if buying a property is affordable. If it is something that is achievable are there property management services in La Marina that can deal with the running/cleaning and general maintenance of the property and general costs associated with this service? 

Hope to hear from you soon.

Andy

marcliff wrote on Wed Apr 26, 2023 9:00pm:

Lynn gave you some good advice on the running costs.

If you are going to rent you will need to do it legally and get a licence. This could mean your house being inspected to see if it meets the required standards with TV, internet, facilities etc. The licences are being cracked down on at the moment and there is no guarantee you would get one. It c...

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...an also take a long time for it to be approved and communities can veto it if they think too many are being rented.

You have to pay the tax every quarter so you would need a gestor or solicitor to do it for you. You also need to register anyone staying with the guardia civil with dates and details etc. This can be done online once you have registered with the police.

If paying rental tax you would not be liable for non resident tax so that's one little saving. 

If you are from UK you'd need to look at the procedures for gaining a visa if you want to eventually retire to and show an income between you of around 35,000 euro a year. 

Most of the costs Lynn has mentioned are payable for the entire year so not discount for not being there all the time. Even electricity has fairly high standing charges.

Kimmy11 wrote on Thu Apr 27, 2023 2:48pm:

Hi Andy and welcome to the forum,

Have you looked at the cost of buying and selling property in Spain?  In addition to the purchase price of your Spanish property, you will have to pay a property purchase tax (ITP) calculated as 10% of the purchase price, so if you want to buy a property priced at, say, €200,000, you have ...

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...to pay an additional €20,000 ITP.  Other costs of purchase, including lawyer, notary and land registry, will amount to about 3% to 4% of the purchase price.  If, when you come to retire, you decide the property you've bought is not what you want to live in permanently longer term, selling agent's fees start at 3% and, more typically, are 5% or 6% of the selling price, plus legal fees.  ITP is applied to every property purchase you make, so you can see that it´s important to try and get it right first time.

Another member, DaveBev1, has written a guide to obtaining the Tourist Licence, which you will need in order to legally rent out your property - you can find it in the "Spain Tips and Guides" section at the top of the page.

Kind regards,

Kim

AndyArnold78 wrote on Thu Apr 27, 2023 4:16pm:

Thanks for that Kim I’ll be sure to have a read. We haven’t visited La Marina yet and are hoping to in the next couple of weeks to get a feel for the place. As a different option to full residency I’ve been weighing up the potential to spend half the year in the UK and half in Spain which I...

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... believe we can do with the relevant visa although this would be about 15 years away and a lot can change in that time. Where would I find these articles you mentioned? 

Andy