So You Have finally Brought Your Dream House in Spain - How Much is it Going to Cost You to Run?

Perhaps one of the many reasons for purchasing a asset in Spain is the cost of living. Can you really believe what your commission only sales rep of an estate agent has told you!

Well in short the answer, credit crunch/exchange rates aside is - Not as much as in England that is for certain!

Bank Orchard

Services.

You will have the usual day to day running costs as you would expect. Water, gas and electric, these are not a lot dissimilar than in England with the added bonus that as it is much warmer here you do not incur so much in the way of heating bills, you may want to have air conditioning running but why lock yourself away in a sealed house when all you need to do is wear less and have the odd fan blowing. The systems you can get installed can run as heaters as well because you must realise it does get a small colder in the winter. The units do cost more to run as coolers than as heaters. Inverter aircon units are a small more high-priced to buy but the running costs over a 5 year duration will repay that extra investment. Gas is not commonplace in Spain.

Water is a valuable commodity in Spain, so do not waste it. Save rainwater in tanks, turn off the water when brushing your teeth or "soaping up" in the shower. Evaporation from swimming pools even in the winter increases consumption so cover the pool in the winter. Once your orchad is bedded in, the plants will not need as much water, so reduce the time the irrigation system is on by half.

Top Tip: invest in a transportable gas heater. You can move it into which ever room you are using. The gas bottles are available anywhere and can be delivered. The bottles cost about Eur12 and allow Eur100 for the heater. In the summer you can always use the gas bottles to power the Bbq. If you house has an upstairs, invest in a set of curtains so that you only heat downstairs, this also helps in reducing any drafts. Remember that these houses are designed to keep you cool 9 months of the year. A small endeavor is needed to keep them warmer.

Suma (Rates)

Yes you do still have to pay rates in Spain but not as much as most pay in England. The rates here are collected by a variety company called Suma. They regain all from rates for your house, tax for your car and bills for you access to water etc. They will bill you annually for such things like your rates (Ibi) car tax etc. You pay these bills in you bank and they will stamp the bill as proof of payment.

Top Tip: If you feel that you have been over expensed you need to see your financial representative or solicitor who will inquire the bill on your behalf. As much as I hate to say this, it is best to pay the bill and then inquire it as any allowance in the bill will be offset by the late cost fine. With bills like the Ibi it is best to check with neighbours how much they pay for similar properties. You will find that values are set by the Catastral. Urban or Urbanised land is higher taxed than rural land.

Cars.

I would suggest purchasing in Spain. If you do bring your own vehicle the first obstacle is that the steering wheel is on the wrong side. Not too much of a question unless you want to overtake one of the many slow engaging lorries, get in and out of carparks, or pay tolls on the motorways. Your car will need to go through a particular technical inspection (Itv = Mot in Uk) and if the headlamps cannot be adjusted then new headlight will be required (£500 for a Ford Focus). You will also be liable to a whole range of taxes/fees for registering the vehicle and endless hours queuing in the dreaded Trafico offices. When you come to sell, the car will be all but worthless and Spanish main dealers will not want to touch the car. Spare parts as well can be high-priced and may need to be imported.

If you buy a car in Spain, if you can afford to buy new as new cars are cheaper than in the Uk, but second hand are more high-priced as the Spanish keep hold of cars for longer. A new car is exempt from the Mot for the first 4 years, it is every two years thereafter until the vehicle is 8 years old and it is then every year.

Top Tip: The bureaucracy when it comes to motoring in Spain is legendary. When purchasing a car try to get the dealer to unblemished the paperwork for you. If you want to buy, sell, register or deregister your vehicle there are forms, forms and forms to fill in as well as fees. To change keepers in the Uk you send in the V5 and that is it. In Spain you fill in forms, stand in queues and pay exorbitant fees of several hundred euros. No wonder the Spanish don't change cars very often. If you can afford to use one of the many people/companies who advertise their services to do the legwork on your behalf.

Tax.

The tax implications are a small dissimilar from England but follow a similar sort of process. You are advised to seek expert help in these matters as you would in England and will probably save the money that the devotee has cost you by being able to claim all you are entitled to. Remember that like England the tax laws change from time to time.

Top Tip: Word of mouth is the best way to find a good tax representative. Listen to what friends and neighbours have to say. You will often be given a free consultation when approaching a prospective representative, so make good use of it. Not only do Spanish tax rules change on a quarterly basis but so do the Uk rules, so try and find a representative who is up to speed in both countries.

In general you will find the cost of living in Spain much cheaper than in the Uk. It is getting more high-priced as the credit crunch bites deeper, but as we all say I would rather be a small short in the sun in Spain than the rain, sleet and greyness of the Uk.

Please note that all of the above was written and to the very best of my knowledge is 100% correct at the time of going to print. Tomorrow the rules could change..... And the day after.

So You Have finally Brought Your Dream House in Spain - How Much is it Going to Cost You to Run?