Building a budget from setup, monthly, annual and buffer costs

Terms used

• Fianza — The fianza is the legal deposit on a residential lease, equal to one month's rent, which the landlord must lodge with the regional body.
• IVTM — The IVTM is the yearly municipal road tax on a car.
• IBI — The IBI is the yearly municipal property tax, paid by the owner and sometimes passed on to the tenant.
• Derrama — A derrama is an extra charge from the building's owners for works, beyond ordinary community fees.

Key rules

• Fianza: The fianza is one month's rent, and any extra guarantee is capped at two months' rent.
• One bucket per cost: Each cost goes in one bucket only, so you never miss it or count it twice.
• Community fees: You pay ordinary community fees only if your contract says so.
• Buffer: Keep a reserve of several months of expenses apart from your planned costs.

The four buckets

Put every cost in exactly one bucket. If a cost has a home, you can't forget it, and you can't count it twice.

1. Setup: one-off costs to arrive and get started.
2. Monthly: costs that repeat every month.
3. Annual: costs that come once a year or every few months.
4. Buffer: a reserve for things you can't predict.

Setup: what you pay once

Setup covers the fianza and first rent, visa and residence fees, sworn translations, apostilles, flights, shipping and furnishing.

The fianza is the deposit on your home. It is one month's rent. A landlord may also ask for an extra guarantee, such as a bank guarantee or an extra deposit. That is capped at two months' rent. Both go in setup, next to your first rent payment.

These rules apply to normal residential leases. Tourist and seasonal lets follow other rules.

Your landlord must lodge the fianza with the regional body. The name and procedure differ by region. You can ask for proof that it was lodged.

Monthly: what repeats

Monthly covers rent, electricity, water, gas, internet, mobile, groceries, transport and private health insurance. Count the rent here only once. The first payment is already in setup, so start the monthly bucket from the second month.

Annual: yearly and periodic costs

Annual covers residence-card renewals, home and car insurance, car road tax (IVTM), the annual income tax return, and IBI property tax if it is passed on to you or you own the home. Divide each annual cost by 12 and set that amount aside every month.

Community fees

By law, the owner owes community fees to the building. Many leases pass the ordinary fees on to the tenant, but only if the contract says so. Look in the advert and the contract for "comunidad incluida" or "gastos de comunidad a cargo del inquilino". If they are yours, put them in annual.

A derrama is an extra charge for building works. It stays with the owner unless the contract says otherwise. Check this in your contract before you sign.

Buffer: your reserve

Keep several months of expenses in reserve. It covers delays, emergencies and unexpected costs. Do not spend it on planned items, and don't mix it into the other three buckets.

Put numbers in

The first-year cash calculator below adds the buckets for you. The checklist covers the lease points to confirm, and the documents list shows what to ask your landlord for.

Documents you need

• Your signed lease, showing whether community fees are included or charged to you, with wording such as "comunidad incluida" or "gastos de comunidad a cargo del inquilino". Your landlord provides it.

• Proof that your landlord lodged the fianza with the regional body. Your landlord can obtain it from that body, and you are entitled to ask for it.

Checklist

• Add the fianza, one month's rent, to your setup bucket next to the first rent payment.

• Add any extra guarantee the landlord asks for, capped at two months' rent, to your setup bucket.

• Ask your landlord for proof that the fianza was lodged with the regional body.

• Add ordinary community fees to your annual bucket if the contract passes them on to you.

• Confirm in the contract who pays a derrama for building works, since it stays with the owner unless agreed otherwise.

First-year cash calculator for Spain

Work it out

What you enter

• Monthly rent, in euros (EUR): The listing or the draft lease for the home you plan to rent.
• Months you will live in Spain in the first year (months): Your own plan for arrival and departure dates.
• Food and household shopping per month, in euros (EUR): Your current grocery spending, adjusted for your city tier.
• Utilities and internet per month, in euros (EUR): The listing, the landlord or a typical bill from your city.
• Transport per month, in euros (EUR): Your town's public transport pass price or your car costs.
• Other monthly costs, in euros (EUR): Your bank app: health cover, phone, leisure and similar.
• One-off setup costs, in euros (EUR): Quotes for furniture, moving, flights and agency fees.
• Paperwork and official fees, in euros (EUR): Fee lists from the offices and advisers you will use.
• Income tax to set aside for the year, in euros (EUR): Your own estimate or an adviser's figure from your expected income.
• Months of extra guarantee the landlord asks for (months): The draft lease; the extra guarantee is capped at 2 months.
• Months of living costs to keep as a buffer (months): Your own choice; aim for 3 to 6 months.

Figures used

• Legal deposit (fianza), in months of rent: 1 months

Worked example (with Monthly rent, in euros 900 EUR, Months you will live in Spain in the first year 12 months, Food and household shopping per month, in euros 350 EUR, Utilities and internet per month, in euros 150 EUR, Transport per month, in euros 60 EUR, Other monthly costs, in euros 250 EUR, One-off setup costs, in euros 1,500 EUR, Paperwork and official fees, in euros 400 EUR, Income tax to set aside for the year, in euros 3,000 EUR, Months of extra guarantee the landlord asks for 1 months, Months of living costs to keep as a buffer 3 months)

When the sum misleads

• Take your city tier and its typical living costs from the city-choice page, and your rent and upfront rental costs from the renting page.
• Rent falls steeply from the biggest cities to small towns, while food, utilities and transport vary much less.
• If you stay less than 12 months, the deposit is still paid in full, so check the result against your plan.
• Leave the tax line at zero only if you expect no taxable income in Spain.

The example figures are placeholders; use rents from current listings for your own city and tier.

Frequently asked questions

Do I pay the community fees as a tenant?

Yes, you pay community fees as a tenant only if your contract passes them on to you. By law the owner owes them, but passing ordinary fees to the tenant is common practice.

Who pays a derrama for building works?

The owner pays a derrama (an extra charge for building works) unless the contract says otherwise. Do not budget for it as a tenant unless your contract states that you cover it. Ask before you sign if the wording is unclear.

Can I ask my landlord for proof that the fianza was lodged?

Yes, you can ask your landlord for proof that the fianza was lodged with the regional body. The name of that body and the procedure change between regions. Ask your landlord which office holds yours.