Spain is among the top tourist destinations in the world. After all, the county has something to offer for everyone – from endless sandy beaches to a vibrant nightlife and music festivals, from a rich and diverse local cruising for the food lovers to a unique cultural heritage filled with a seemingly endless amount of artistic wonders. This unparalleled combination of characteristics turns Spain into an enticing choice for a second home or a holiday property as well. Like most important decisions, however, jumping into it unprepared could lead to otherwise easily avoidable headaches.
Let’s start with the costs of buying a property in Spain. There are many factors that can influence the total amount you will need to pay for your perfect holiday home. To get an idea of how the price will change based on the applicable taxes, you may want to use a cost of buying a house in Spain calculator.
Keep in mind, that the property taxes differ from region to region in Spain and whether you have chosen a new home or a resale property will have a significant impact as well. For example, buying a new property will include paying a 10% VAT and a Stamp Duty/AJD (Actos Jurídicos Documentados) that is determined by each region independently. For a resale property, the costs will involve a different Stamp Duty known as ITP (Impuesto sobre Transmisiones Patrimoniales) that is also set by each autonomous community separately.
Unfortunately, the purchase of your holiday home is commonly accompanied by several additional costs that have to be covered by the buyer. The notary fees are determined based on the complexity of the deal, such as the number of pages of the deed itself, how many documents are attached to it, the overall value of the property, etc. And, although registering your home with the Spain Land Registry Office is not mandatory, this is the main way to ensure legal protection for the holder of the property. These fees again do not have a fixed cost and are taken care of by the buyer.
The Best Places for a Holiday Home
Spain is a vast country and picking the right location for your holiday home so that it meets your personal needs and preferences is vital. If you wish to spend your vacations relaxing on the beach and as far away from the bustle of the city life as possible, it may be best to look for suitable homes in the Alicante municipality. Alicante is known for its expansive public beaches that offer a variety of activities for people to enjoy such as sailing, sunbathing, and swimming in the warm Mediterranean waters.
Alternatively, those looking for a holiday home to spend some quality vacation time with their family and kids could look into the Costa del Sol municipality. Here, families can find hundreds of beaches ranging from quiet coves to trendy beach spots. More importantly, the area boasts numerous waterparks, adventure parks, camps for childer, cinemas, and other fun attractions where you can let your kids go wild.
Will The Property be Offered As a Rental
A common choice among holiday homeowners is to rent out the property when they are not vacationing there. Doing so can help them establish a new revenue stream, bringing some much-needed proceeds that could cover at least some of the mortgage fees or other costs associated with the purchase of the home. At the same time, however, doing so will change the annual income tax owed under Spanish law for non-residents who own a property in the country. To be more specific, non-residents must pay Personal Income Tax (IRPF) with certain expenses potentially being recognized as a discount on the owed amount.
Holiday Home Insurance
In general, home insurance is not mandatory in Spain. At the same time, having one is strongly recommended, especially if you plan to offer your holiday home for rent to third parties. Taking out an insurance policy will be invaluable when it comes to matters such as public liability in case someone causes accidental damage or suffers an injury while staying on the property. Insurance could also help with mitigating the potential losses in rent revenue if the holiday home remains unoccupied for extended periods of time. The exact premium of the insurance could be influenced by a series of factors – the surface area you wish to insure, the capital of the structure, the belongings to be included in the insurance, and more.