IBI, waste tax and utilities: the annual costs of owning property in Spain

The purchase price of a property is a figure you pay once. What comes afterwards — the annual costs of owning it — is paid every year, without exception, for as long as you are the owner. IBI, waste tax, community fees, utilities, insurance: these are expenses worth calculating before you buy, because together they can add up to several thousand euros a year. Here they are, broken down one by one.

IBI: the property tax

The IBI (Impuesto sobre Bienes Inmuebles) is a municipal tax levied on the ownership of any property in Spain. It is paid annually by the owner, and its amount depends on two factors:

• Cadastral value: the value assigned to the property by the Catastro, generally lower than market value (between 50 % and 70 % of the actual price). It is reviewed periodically, roughly every ten years, although town halls can apply annual adjustment coefficients.
• Municipal tax rate: each town hall sets its own rate within legal limits: between 0.4 % and 1.1 % of the cadastral value for urban properties.

The formula is straightforward: IBI = cadastral value × tax rate. For example, a property with a cadastral value of 80 000 euros in a municipality with a 0.65 % rate would pay 520 euros per year.

The IBI is typically paid in a single annual bill, although some town halls allow instalment payments. The deadline and payment method vary by municipality. You can check your cadastral value and property reference at the Catastro online portal.

IBI on the Costa Blanca

Tax rates vary between municipalities in the province of Alicante. This is a detail worth checking before buying, especially if you are comparing properties in different towns: a similar home can pay double the IBI simply by being in a municipality with a higher rate.

Waste tax (refuse collection)

Since April 2025, all municipalities in Spain are required to charge a specific waste management tax. It is not a new tax — many town halls already charged one — but it is now mandatory nationwide and must reflect the real cost of refuse collection and treatment.

The amount varies enormously by municipality. The national average in 2025 stands at around 116 euros per year per household, but differences are notable: some municipalities charge under 30 euros annually while others exceed 200. Each town hall decides the calculation criteria: some base it on property size, others on the number of occupants, and some apply a flat rate.

The waste tax is usually collected alongside the water bill or as a separate municipal receipt.

Community of owners fees

If the property is in a building or complex with common elements, you will pay a monthly fee to the community of owners. This expense covers building maintenance, cleaning, insurance, lifts, the pool (if any), garden areas and the property manager's fees.

The range is wide:

• Simple block without pool or lift: 30-60 euros/month.
• Building with lift and common areas: 60-120 euros/month.
• Complex with pool, gardens and security: 150-300 euros/month.

On top of this, there may be special assessments (derramas) — extraordinary payments for repair or improvement works — which can run to several thousand euros depending on the scale of the project. Before buying, always ask for the community's annual budget and enquire about any approved or planned assessments.

Utilities: water, electricity, gas

Electricity

The average electricity bill for a home in Spain is around 80-120 euros per month, although on the Costa Blanca it can be higher in summer due to heavy air conditioning use. The tariff has a fixed component (contracted power) and a variable one (actual consumption in kWh). Contracting the right power level — neither more nor less than you need — is the first form of savings.

Water

Household water consumption typically costs between 20 and 40 euros per month for an average family. The supply is managed by the town hall or a concessionary company, and the tariff usually has progressive tiers: basic water is cheap, but excessive consumption is penalised with higher per-cubic-metre prices.

Gas

Not all properties on the Costa Blanca have a natural gas connection — many use butane cylinders or fully electric systems. If the property has natural gas, the average cost is around 30-50 euros per month, concentrated in the winter months for heating and hot water. Properties with aerothermal systems (heat pumps) do away with gas entirely.

Internet and telecommunications

A standard-speed fibre optic connection costs between 30 and 50 euros per month depending on the provider and plan. Fibre coverage on the Costa Blanca is extensive, even in many inland towns.

Home insurance

Home insurance is not legally mandatory if you do not have a mortgage, but it is highly recommended. It covers water damage, fire, theft, third-party liability and, in many policies, home assistance (locksmith, plumber, electrician).

The average cost of home insurance in Spain is approximately 250 euros per year, though it varies depending on floor area, location, contents value and the coverage chosen. If you have a mortgage, the bank will require at least structural damage insurance for the building.

Summary: the annual cost of ownership

For a rough reference, here is how the annual expenses break down for a typical property on the Costa Blanca:

• IBI: 300-800 euros (depends on municipality and cadastral value).
• Waste tax: 30-200 euros (depends on municipality).
• Community fees: 600-3 600 euros (depends on common services).
• Electricity: 960-1 440 euros.
• Water: 240-480 euros.
• Gas or climate control: 0-600 euros (depends on system).
• Internet: 360-600 euros.
• Home insurance: 200-400 euros.

In total, the fixed annual costs of maintaining a property as an owner range from 2 700 to 8 100 euros, depending on the type of property, the complex and the municipality. This is a figure worth adding to the purchase price and mortgage payments for a realistic picture of what it costs to live on the Costa Blanca.

Frequently asked questions

Who pays the IBI when a property is sold?

The law states that the IBI is owed by whoever is the owner on 1 January of each year. In practice, many purchase contracts agree on a pro rata split: the seller pays the proportion up to the deed date and the buyer the remainder. But without an express agreement, the seller pays the full year's IBI for the year of the sale.

Can I set up direct debits for all these payments?

Yes. The IBI, waste tax, utilities and insurance can all be direct-debited from your bank account. It is advisable to do so to avoid late-payment surcharges, especially if you live outside Spain for part of the year.

Are there IBI discounts for any groups?

Yes. Many town halls offer IBI discounts for large families, properties with solar energy installations, officially protected housing or new-build properties during their first few years. Check your municipality's fiscal ordinance to find out which discounts are available.

Is the waste tax separate from the IBI?

Yes. They are distinct levies. The IBI is a property tax paid to the town hall. The waste tax is a service charge for refuse collection and treatment. Some town halls include both on the same bill, but they are separate items.

If I do not live in the property all year round, do I pay less for utilities?

Yes for variable consumption (kWh of electricity, cubic metres of water), but not for fixed charges. The contracted electrical power, the fixed water term and gas standing charges are payable regardless of consumption. If the property will be unoccupied for several months, you can reduce the contracted power, but you cannot eliminate the fixed cost entirely.