Expenses of a home after purchase: A Complete Guide 2025

Buying a home is a big step, but beyond the purchase price, it is essential to consider the recurring expenses of the home ownership. These costs can be divided into fixed costs and variable costs, as well as monthly and annual expenses. We explain each one in detail so that you can better plan your finances in the short and long term.

Fixed costs in a home

The fixed costs of a home are those recurring and unavoidable expenses that a homeowner must assume to keep the property running and to comply with the associated legal obligations. These expenses do not usually vary significantly from one period to the next and are predictable, making it easy to include them in the monthly or annual budget.

Mortgage

If you have financed the purchase of your home with a mortgage, this will be your main fixed cost. The monthly payment includes the principal and interest. The amount you pay will depend on:

The amount of the loan.
The interest rate (fixed, variable or mixed).
The repayment period.

When is it paid? Generally monthly, you can agree on quarterly payments with your bank.

IBI (Real Estate Property Tax)

IBI is a compulsory tax that all property owners pay to the Town Hall annually. Its calculation depends on the cadastral value of the property, determined by the Town Hall. It is a tax paid for owning and using a property, including dwellings, commercial premises, garages, as well as rural and urban properties.

IBI is paid annually. In some municipalities, it can be divided into quarterly or monthly payments.

Community expenses

Community fees are paid by homeowners in a community of neighbours to cover the costs of maintenance and common services.

What do community fees include? Community fees may vary depending on the community of owners, but they usually include:
- Maintenance and cleaning: lifts, common areas (entrances, stairs, gardens, swimming pool), garages and shared storage rooms.
- General supplies: electricity in common areas, water (if communal), central heating (if any).
- Services and personnel: concierge or porter, security or surveillance and administration.
- Repairs and improvements: necessary building works, conservation of the structure (façade, roof, sanitation), community insurance, fire cover, water leaks, structural damage, etc.
- Reserve fund: a compulsory percentage for future unforeseen expenses.
How are the community fees calculated? Each owner pays a monthly or quarterly fee, established according to:
Participation coefficient: this is based on the square metres of the dwelling in relation to the total of the building.
Additional services: Some communities allow those who do not use certain services (e.g. lift) to pay less.
Community agreements: These are fixed at the Meeting of Owners and can vary over time.

When is it paid? Monthly or quarterly, as stipulated in the Statutes of the Community of Owners.

Rubbish tax

This municipal tax is associated with the management and collection of solid urban waste. It is a compulsory contribution applied in most municipalities in Spain, and the amount varies depending on the locality, the type of property and, in some cases, its use (residential, commercial, etc.).

The fees are annual in most cases. Some municipalities allow payment in instalments.

Home Insurance

Home insurance is not compulsory by law, but it is highly recommended, especially if you have a mortgage. In this case, banks usually require it. This insurance covers possible damage to the structure (building) and the goods inside it (contents).

What does home insurance cover?

1. Basic coverage:

Fire and explosions (structural damage and affected furniture).
Water damage (leaks, broken pipes, filtrations).
Meteorological phenomena (lightning, storms, hail, floods).
Breakage of glass (windows, mirrors, glass ceramics).
Electrical damage (power surges, short circuits).

2. Additional cover (optional):

Theft and vandalism (both inside and outside in some cases).
Civil liability (protection if you cause damage to third parties, for example, a water leak that affects your neighbour).
Home assistance (locksmith, plumbing, electricity).
Pets (veterinary expenses or civil liability for damage caused by your pet).

How much does home insurance cost? The price varies according to the location, the value of the building (structure) and contents (furniture, electrical appliances, valuables), the level of cover taken out and the history of previous claims.

When is it paid? It can be taken out with annual, half-yearly or monthly payments.

Life insurance

Although it is not compulsory, some banks require it when taking out a mortgage. This insurance protects the beneficiaries in the event of the death of the holder, covering the outstanding balance of the loan.

What does life insurance cover?
- Main coverage:
  - Death due to any cause (accident or illness).
  - Permanent disability (when the insured person can no longer work).
- Optional coverage:
  - Death by accident (additional compensation if death is by accident).
  - Serious illness (advance of the insured capital if a serious illness is diagnosed).
  - Burial expenses (to cover funeral and administrative formalities).
How much does life insurance cost? The price varies according to the age of the insured, the state of health and life habits (age, practising risky sports, etc.), the insured capital (amount that the beneficiaries will receive) and the additional coverage included.
When is it paid? Annually or monthly, depending on the conditions of the contract.

Variable costs in a dwelling

Maintenance costs

Every home needs regular maintenance, from small repairs to periodic checks of installations such as plumbing, heating or air conditioning.

How much to spend? This expense is variable and depends on the condition and age of the property. It is recommended that between 1% and 3% of the value is spent on annual maintenance.

Bills and utilities

These include water, electricity, gas, internet and telephone. These expenses depend on consumption and contracted rates.

When do you pay? Monthly. It is possible to negotiate flat rates for some services, such as electricity or gas.