Guide to Building Construction in Spain
1st August 2018

You perhaps have in mind exactly what you would like your ideal property in Spain to look like, where it should be situated and the dimensions and specifications it should include. Trouble is, one doesn’t seem to have been built yet. The solution? Build one of your own.

Property programmes showing entrepreneurial individuals creating their new home from foundation to fixtures have perhaps contributed in the interest that there is in starting from scratch and building your own home in Spain.

There are attractions to taking control including removing the profit of the promoter and avoiding some of the risk associated with buying from one. However, building (new, enlargement or reform) your own property in Spain comes with risks of its own and you need to have calculated your budget carefully before setting out.

According to El Confidencial, the cost of buying land has dropped and an increasing number of people are taking advantage of this. However, they warn, it is important to calculate all the potential costs before embarking on a build-it-yourself venture.

Calculating the cost

Although the majority of costs lie with purchasing the site and the building work itself, there are other on-costs that you can easily neglect to build into your calculations.

Of the total cost, you can expect to pay:

  • 45% for purchasing the plot
  • 40% for the building work
  • 8% for the professional fees
  • 7% for taxes and licences

It is important that you select your site carefully. It might sound obvious but you must check with the local municipality in Spain that you can build there and what restrictions there might be in terms of dimensions of the building. You should check the current ownership of the land and that the specifications match the registration recorded in the Land Registry.

You need to consider your utilities too. Is your plot accessible from a public road? Are services available including water supply, sewage and electricity?

On top of the building costs and the price of the plot you must add the costs of the Deed of sale, notary fees and registration in the Land Registry in Spain. This usually comes to around 0.5% of the purchase price.

There will be Transfer tax to pay of between 7% and 9% and if you are a company you will have to pay 21% in VAT. There will also be VAT to pay on the building work itself that will come to around 10% of the contract budget. VAT (IVA) also applies to architects’, technicians’ and builders’ fees all at a rate of 21%.

Overall it is estimated that the cost of building the house will come in at 750-1200 euros per square metre of house built. The final cost can come in higher as there is a tendency for you to pick higher quality building materials when building for your own use. For enlargements all depends of the construction quality we start with. Is normal to reinforce or replace and update components of the original construction