Taxes at the Costa Blanca: the price tag of paradise
The Costa Blanca is the place on earth with the biggest potential to make you happy. Owning a house in paradise and admiring the magical landscape everyday: it can change your life. The people, the food, the fun, and the bluest blue of the Mediterranean Sea will caress your eyes and forever change you. Paradise comes with a price tag, and you will soon read about it.
Just like anywhere else in the world, the Spanish government raises taxes from its inhabitants. If you happen to have properties, they will be taxed.
Impuesto de la renta a los no residentes
In English, this means ‘Income taxes for non-residents’ and applies to people who own a property, but do not live there. To make sure this also applies to you, you must be able to demonstrate that you have a home in your own country.
How high are these taxes?
The math is easy: 24.75% of 1 to 2% of the cadastral value of your house. Let’s take a round number as an example: if your house has a value of € 100,000. Then taxes amount to approximately € 247.50 annually.
Impuesto sobre la renta a personas físicas
This means ‘Income taxes for non-residents’ and excludes what is mentioned above. Meaning that you cannot have your permanent residence in two countries at the same time. These taxes are not raised over the assets, but over your personal income. Thus, if you report your income to the Spanish government, just like every other country they will raise taxes over your income.
Impuesto sobre bienes inmuebles
The English translation here is: ‘Taxes on real estate’ and relates to the grounds and the property itself. In determining these taxes, the government takes the type and size of the grounds and the house into account. The location also plays a role in the calculation: rural regions usually pay less than (more) urban areas.
How high are these taxes?
This is not a fixed amount, because this depends on the features of the grounds and the house. Usually though it fluctuates between 0.4 and 1% of the cadastral value. This amount must be payed annually.
Co-owner within a community
If you are the lucky owner of property within a community, you will have to pay for the common areas. For example, if there is a communal garden and/or other areas, you will also have to pay for their maintenance together. This is normally an annual amount agreed at a meeting with all the other owners. This amount rarely exceeds € 100 per Month.
If you own property and want it to remain safe and intact during your absence, you need insurance. The amount normally varies between € 150 and € 400 per year, depending on the type of coverage.
In Spain, the waste levy must be paid as municipal tax. This is a fixed amount, regardless of the size of the house. Municipalities determine this amount themselves and it is usually between € 100 and € 130 per year on the North Costa Blanca.
Just like in any other country in the world, you must pay for water, gas, and power, as well as telephone, internet, and cable television. The last three are optional and many people only use these options when they are on site.
Conclusion – the priceless
All these taxes may weigh on the piece of heaven you have recently purchased, but the result is literally priceless. There is no price for the smiles of your children walking to the sea on a sunny day. There is also no mathematical calculation for the incredible views of Mount Montgó or the beautiful cobbled streets of the old Spanish Pueblos.
Life in paradise comes with a price tag, but the result of this decision is as priceless as happiness itself. What are you waiting for to live the life you've always dreamt of?