COUNCIL TAX AND OTHER LIVING COSTS IN SPAIN
Before I get onto the subject of council tax, I want to remind you once again that I recommend renting for six months or so before you commit to buy. Get to know the area before you even start house hunting. In this town, where we have lived for seven years, it will cost you around €2000 per month to rent a three-bedroom house with a garden. If there is a pool you will pay closer to €2500 and you’ll also be expected to bear the cost of the pool maintenance contract, so add another €150 per month for that. Also, the owner will probably ask you for three or even six months’ rent up front plus a hefty security deposit.
However, some landlords won’t ask for a deposit at all, and won’t overcharge you, and they’ll pop round every Sunday morning to check the pool themselves so there will be no maintenance contract.
Mallorca is a real mixed bag. Anecdotally, in this town, it seems the worst landlords are absent Brits whose properties are managed by cut-throat agencies.
Council tax here is the impuesto sobre bienes inmuebles but everyone calls it IBI, pronounced ee-bee. Annually, you pay between 0.4 and 1.1% of the cadastral value of your property. The cadastral value of a house is a monetary value assigned to the property by the local authority and is completely different to the market value. The cadastral value is always much lower and is actually more of a measure of the expected owner’s means than the actual value of the house. All properties are given a cadastral value which is entered into a registry at the townhall. As you might imagine, similar properties tend to have similar cadastral values.
Council tax in this town is more or less €900 per year for a three-bedroom home. You pay a further €130 or so per year for the garbage collection and street sweepers. If you have a vehicle, you also have to pay Permiso de Circulación or car tax, sometimes referred to in Britain as road tax, or road fund licence. In Spain it is collected by your local council rather than central government. Ours is €22 per year for my wife’s small car and nothing for mine because it is more than 25 years old. There is another charge of around €100 per year which I cannot quite get to the bottom of but I’m told it might be something to do with my garage doors. Seriously, a council official told me it ‘might’ be for my garage doors. Things here, even official matters, are often quite vague.
In total, we pay €1152 per year to the local council, which is less than I paid in London for the same services. But not by much.
When we first moved here in 2015, the cost of council services was much lower but taxes in this town have increased dramatically in recent years.
Mallorca is expensive compared to much of Spain. Last year, I spoke to someone who lives in a two-bedroom cottage in Andalusia. They live inland, near Cardeña, which is not too far from Córdoba. Their annual IBI is under €100 because their modest but beautiful home, which sits on around 20,000 square metres of land (5 acres), has a very low cadastral value. Historically it would have been the home of a campesino, which is the Spanish term for country folk or peasant. They pay a further €90 or so for garbage collection. They have their own well for water and a solar array for electricity. They cook in a wood-fired oven and on a butane gas stove. They heat water and warm their home using a pellet burner and a log fire. Their annual expenses are very low.
When we spoke, they were working on beefing up their solar array to charge an electric vehicle and cut out the cost of petrol. I have a feeling that might not actually be possible. I suspect they’ll need to have a special vehicle charging point installed by an electrician or even their electricity provider.
Be sure to find out the cost of running a property before you put down your deposit. The estate agent should know the IBI and any other costs. If he or she can’t tell you then they’re not doing their job properly. If you are planning to buy an apartment, be sure to find out the monthly management fee and ask a neighbour if they’re happy with the management company and the state of the building generally.
Something very important to bear in mind when house hunting here is that the outdoor spaces are as important as the indoor spaces. Wherever you are in Europe, at current prices, your electricity costs are likely to be high in winter. In the south of Spain, where the sun shines for 300 days of the year, where you spend half of your time outside, and where you want a cool shower as often as a warm one, as long as you go easy on the air conditioning your energy bills are going to be significantly lower.
