Even though prices for real estate in Spain are dropping because of the recession and stock market problems, buying an apartment continues to come along with a group of expenses that might lead people into thinking that it is better to rent than to buy.
Homeowners can spend around 2,188 euros annually because of all of the basic fees: Council Tax, small repairs, home insurance…
Considering fixed costs such as taxes and community fees, living in a standard apartment averages more than 2,000 euros per year. In addition, renters need to calculate in additional expenses, including the expenses for random repairs. In total, this can cost around 200 euros monthly.
Condominium fees fees make up the largest part of the total amount. The Professional Association of Apartment Administrators of Madrid figures that in a typical apartment building of 30 apartments in Madrid, this fee averages 104 euros per month, totaling as much as 1,248 euros per year.
The Council Tax bill (called Impuesto de Bienes Inmuebles or IBI) is the next important fee that an owner must account for. Your type of housing, your city, and your city zone will all impact the amount of this tax. The leading Spanish property tax agency has concluded that this amount can range from 256 euros in Zaragoza to 415 euros in Seville. The average in Barcelona is around 350 euros annually, so you can expect to pay an amount similar to this.
Small repairs that are not covered by a normal insurance policy must also be considered after figuring in taxes and fees. These can include clogged drains and electrical or hot water heater repairs, as well as many others. Reparalia, a company that specializes in home repairs, completed a study which determined a renter should plan on 350 euros a year for repairs. They also concluded that since 2006, this rate has gone up 5.8%.
Home insurance is an additional expense to consider, as it is mandatory. In a recent simulation of major insurance companies, the Spanish website Su Vivienda figured that a normal policy can be between 160 and 200 euros. Therefore, keep in mind that you should plan on having about 180 euros for a unit of 95 square metres.
Trash collection (a local service Tax for rubbish collection) is also a fee to consider when thinking about home ownership. There is a huge variation in Spain, ranging from 44 euros in Valencia to 92 euros in Barcelona, to nothing at all in cities such as Malaga (according to the Spanish property tax agency). Each household should plan on having around 60 euros to cover this fee.
Homeowners can spend around 2,188 euros annually because of all of these fees, which is 182 euros each month. Unfortunately, it is impossible to predict any additional unforeseen costs. Professional painting alone can cost 800 euros every 5 years (less if the owner completes the painting himself of course), but you should also plan on having extra for this type of additional maintenance expense.
The sources of this article is the Spanish newspaper El Mundo
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