When planning to build a Spanish property there are several financial elements that must be taken into consideration. To start the cost of the land is fundamental. This will vary according to the standard of the plot and the area for example. The further inland you go, the cheaper the land will be: 10-150 € / m2. If the land you are considering is in an exclusive area (ie. near the sea or a golf course) it can cost: 200-700 € / m2. In other areas (ie. tourist areas or historical/archaeological) prices vary: 100-400 / m2. Moreover you should consider an extra sum of 10% of the price of your plot to pay for registration of the title deed, transfer tax and notary fees.
The cost of building the property in itself can vary greatly depending on the complexity of the design of the house, the engineering necessary on the land and the cost of the materials you require. However the role of the constructor is essential and determining in the cost of the work, therefore we recommend you to contact several constructors in order to compare and decide which one proposes you the best prices and options. A villa with a pool and a garage of 200 m2 will cost: 500-700 € / m2. An apartment complex with 20 apartments of 100 m2 will cost about 700-1000 €/ m2.
These can amount 25-30% of the cost of construction of your Spanish home, including VAT (7%), architect and technical architect fees, cost of licenses, paper work, legal assistance and getting electricity, water and telephone. If you are planning to build in order to live in the house rather than to invest, there is also an annual cost for owning and living in a Spanish property, involving property taxes, community fees, insurance etc…
In regards to mortgage, it is harder to obtain to build a new property than when you want to acquire a second hand property. This is due to the fact that the bank has no other security than the value of the plot until the construction works are done and the real value of the house is estimated. The bank will explore all the problems that could arise in order to decide if it should lend you the amount you want (ie. not getting the required permits, possible delays and the reputation of the constructor you employ). Thus, you should make sure that you have all the necessary permits before you contact the bank for a mortgage.
Copyright © 2004 Spain Real Estate Index. All rights reserved.