Spain has more than 3,4 million empty homes, according to the last figures of the National Institute of Statistics (NIS). Almost 11% more than one decade ago. Many owners do not find buyers, others prefer to keep them empty and useless… No matter what the motive might be, it is true that even though the properties are not used, they lead to great expenses for the owners.
A report issued by Alquiler Seguro, based on the information they handle daily on the cost of maintenance of properties, to have an empty home supposes an average expense of more than 2000 Euros per year. This expense may vary depending on the size of the property and its location.
When it comes to Barcelona, the average expense reaches 2400 Euros per year, a figure that can be extended to any city with more than 250.000 inhabitants. “In the last few years, the idea that keeping a property closed contributed to its revaluation has disappeared. Since the beginning of the real estate crisis, properties have reduced their value at a dramatic pace, so that since 2008 prices have adjusted by 36% and will continue to do so until 2014, according to some analysts”, they point out from Alquiler Seguro.
“A well maintained property lasts longer, ages with more dignity and allows a longer enjoyment. With a periodic maintenance, any sudden expenses arisen after important repairs would be avoided. Many of the requirements demanded for the maintenance of the property could be covered if it were occupied by a tenant”, they add.
The maintenance of an empty property represents some fixed and variable expenses, which could not have been foreseen by those deciding to leave their properties empty. The average monthly expenses reach 200 Euros per property.
1. Neighborhood association:
For the owner, the neighborhood association could be the highest expense in the maintenance of an empty property. The installments of these associations are established based on the related services and the dimensions of the common areas, and therefore the invoice can differ greatly from one property to another. For a property of 80 square meters in the center of one of the main cities analyzed by Alquiler Seguro, without any common elements such as lift or doorman, the monthly installment would reach 75 Euros, without taking into account any extraordinary expenses such as fees or refurbishments, which could increase it considerably.
Also, there are many neighborhood associations that include additional expenses in the invoice such as common heating and water, which would result in an annual expense of 900 Euros.
2. Real estate tax:
The second most important invoice for owners, unavoidable, is the real estate tax. It taxes the ownership of any property in the hands of an individual. Its amount depends on the property tax value, which classifies the origin of the ownership of properties or the established in rem rights. The cost of this tax varies between 0,4% and 1,10% of the property tax value of the property, and therefore the average expense per owner reaches 500 Euros, in a property without garage or storage room. Should the property have any additions, the expense could increase approximately in 120 Euros more. It includes the garbage tax.
3. Home insurance:
According to reports drafted by different insurance companies, more than 65% of the properties located in Spain have a home insurance, so as to cover any unexpected circumstances or any accidents. The main reason for signing an insurance is to avoid the payment of any damages to nearby properties or those generated by burglars or violent acts. Depending of what we wish to assure (contents/container) and the company we sign it with, the expense changes; nevertheless, for empty homes, it is normal to contract the basic coverage which is around 200 Euros.
4. Minimum supplies:
Some of the 3,4 million empty properties in Spain continue paying the supplies of electricity, water and gas. Even though they do not use them, these have a minimum cost, which in the case of electricity depends on the power that has been hired. Due to the increase in taxes, in the last few years, the minimum cost of supplies has increased, reaching an average 540 Euros per year for the installation and maintenance.
Although these are exceptional cases, some empty properties have extra expenses such as the payment of a mortgage. If we calculate the price of a property of 100.000 Euros with a financing at an average 3% and 15 years, it would mean paying 690 Euros per month.
Apart from all these fixed expenses, it would be necessary to add the cost of maintenance and refurbishments which are not covered by the insurance (breakdown of the boiler, blockages…) This type of expense, that would be an occasional or variable cost could increase the annual cost in 260 Euros, always depending on the type of breakdown, repair or restructuring needed. (…)
Source: El Confidencial