Now you have found your perfect holiday home in Spain, it’s time to sort out the practicalities. This can seem like a daunting task, especially if you don’t know much Spanish. How do you go about setting up utilities? What taxes do you need to pay as a non-resident? What is the easiest way to make friends?
Here are five things you need to know as a property owner in Spain…
1. Setting up utilities
Of course, if your property has had previous owners, some or all of the utilities may already be set up. Often, the agent will help you to transfer the utilities into your name. However, if you are buying off plan, here’s how you can set up the utilities in your holiday home.
Read much more in our in-depth guide, How to Buy a Holiday Home in Spain.
The cost of electricity in Spain is one of the most expensive in Europe, so it is important to make sure you get the best deal. If you have bought a property that already has electricity connected, all you need to do is choose a supplier.
Some of the main companies are Groupo Endesa, Iberdrola, Union Fenosa, and Hidrocantábrico. It is a good idea to shop around using comparison sites. To switch suppliers, you will need your NIE, Spanish bank account details, the Unified Supply Point Code (CUPS) and the electricity installation certificate.
If you home is off plan, then you will need to speak to the local distributor to get connected. Connection costs are usually at a fixed rate, with connections to the grid costing around €10.
It is wise to set up a direct debit, and you can have your bills sent to your UK home.
Gas prices are a lot lower than electricity prices. As mains gas is only available in the big cities, bottled gas is commonly used in other areas of the country. It can be a lot cheaper as there is no fixed cost. You can get a 12.5kg bottle of butane for under €13. Some big gas providers are Repsol Butano and Cepsa. If you are planning on spending a significant length of time in your holiday home, then it may be worth getting a gas bottle contract. This will cost around €20 and means gas bottles will be regularly delivered to your door.
Each municipality will organise its own waste disposal, charging an annual fee. Spain has previously lagged behind when it comes to recycling, nonetheless, many areas now recycle paper, cardboard, glass, aluminium, cans, plastic, batteries and garden waste. You may receive a leaflet informing you of how, where and when to dispose of your rubbish. It is important to note that collection frequency depends on how rural your property is!
Spain’s water is supplied by a combination of municipal public providers and private companies. The biggest private suppliers are Agbar and Aqualia, and the largest public water company is Canal de Isabel II, which supplies Madrid. If your property already has a water connection, all you need to do is register the contract in your name by getting in touch with your local town hall (ayuntamiento), either in person or online.
Don’t get caught out by legal issues when buying in Spain – get a no-obligation quote from our trusted solicitors today.
If you need to get water connected to your holiday home, simply arrange a connection with the local water company. The cost of this can vary.
The average monthly cost for a three-bedroom apartment is around €35 – so prices are quite reasonable – but of course, for a villa with a garden and a pool this will be substantially more. Nonetheless, it is important to be cautious with your water consumption, particularly in Southern Spain where droughts are common. Why not install a water-saving tap which can reduce water usage by as much as 30%!
As much as we all say we don’t rely on our smartphones or the internet, we really do. In this modern day it is important to have internet access to keep up with the latest news, talk to friends and family back home, or simply to sit back and watch a show on a streaming service (Read our expat guide to watching TV abroad).
For internet, the main players in Spain are Movistar (Telefónica) who actually owns all the telephone lines, Orange (actually Orange, France), Vodafone (UK owned) and Jazztel (Spanish). Internet contracts cost around €15.95 + IVA (VAT) per month.
Read more about setting up utilities in Spain here.
When it comes to taxes in Spain, if you own a property, you will need to pay some tax and complete a tax return each year. This is the case even if you are not a resident.
Spanish bureaucracy can be quite confusing, so our best advice is to contact a gestoria (agency). They will often save you time and money. Similar to an accountant (contable) or solicitor (abogado), they are essentially well-connected, unlicensed clerks who really understand the Spanish system.
If you’re preparing to view properties in Spain, ensure you know what to look for by reading our free guide, Your Viewing Trip.
Non-residents need to declare any income they have earned in Spain, including any rental income. To pay any tax, you will need to register at the Spanish Tax agency (Agencia Tributaria). Ensure you have all the necessary paperwork and your NIE card (which is actually your tax number). If you are paying for the first time, you will need to ask for Modelo 30, which shows you are obliged to pay tax.
Spanish bureaucracy can be quite confusing, so our best advice is to contact a gestoria (agency).
Tax returns must be completed by the end of June.
The main taxes are:
● IBI (el impuesto sobre inmuebles urbanos): the main property tax. It is comparable to council tax in the UK.
● Personal Income Tax (Impuesto sobre la Renta de No Residentes – IRNR): this depends on whether you choose to rent out your property or not.
If you choose to rent out your property for some or all of the year then you will need to pay rental tax as a non-resident property tax in Spain. This is collected quarterly on the 20th April, July, October and January. You are legally required to declare this income and pay taxes on it. Usually, non-residents pay a flat rate of 25% of the gross income they earn from their Spanish property. If you choose not to rent out your property then you pay income tax based that is fixed at 25% of 2% of the valor catastral of the property
● Annual Wealth Tax (Impuesto Sobre Patrimonio): this is only for people with net worldwide assets over €700,000.
If you are not a resident in Spain, it is a good idea to hire a tax representative.
3. Renting out your property
For many people, one of the main reasons for purchasing a Spanish property is to rent it out to holidaymakers. Spain has recently introduced stricter rules surrounding renting out property in order to keep an eye on rental income and make sure it is appropriately taxed.
In order to stay legal, you must abide by the standards set by the area your property is located. You must ensure your property is safe and comfortable, and in some cases you may even have to tell the local authorities – and sometimes the police – who is renting your property. Therefore, it is important to research the rules for your area, and make sure you follow them!
Buy certain properties and you may not be able to rent them out. Ensure you’re covered legally, with a no-obligation quote from our trusted solicitors today.
Also, it is wise to have a proper rental contract between you and the tenant so as not to run into any unwanted quarrels. It may be worth hiring a Spanish letting agent to assist with this and to manage the property for you.
4. Integration/making friends
A good network of friends is something everyone wants. And, just because you may not be spending all year in your Spanish home, it doesn’t mean you can’t be part of the community!
Joining a group for Spaniards learning English is a great way to meet people with similar interests
One of the main ways to really become part of your local Spanish community is of course, to learn Spanish. However, you can also make friends by joining Facebook groups for property owners or other international people living in Spain, by volunteering or joining a club.
You could even join a group for Spaniards learning English, as this is a great way to meet people with similar interests to you, and a way to offer your services.
5. Bringing your pets along
For those of you lucky enough to escape to your holiday home in Spain for up to three months of year, don’t forget about your furry friends! Brexit has meant you can no longer use a pet passport issued from Great Britain to travel to Spain. Now, your pet will need a microchip, valid rabies vaccination and an animal health certificate.
When you come back to the UK, you will need the above, plus a GB pet health certificate.