Many foreigners relocate to Madrid every year for career moves or personal reasons. Being the 3rd largest city in the European Union, the Spanish capital is a financial powerhouse among Western European countries housing nearly every multinational company on the planet.
Living in Madrid
Madrid and the rest of Spain is famous for its sunny weather and laid back lifestyle. It is also a wonderful place to raise a family. Spain offers high quality social medical care, ranked 8th in the world by the Health Care Access and Quality Index. Private coverage options are also available.
Spain was recently ranked as the third safest country in Western Europe by the WEF (World Economic Forum), just after Portugal and Austria. Crime is low and violence is rare on the streets of Spain.
Madrid is also a great option for schooling your children as it houses more than 600 international and multilingual schools.
Locations to Buy Properties in Madrid
Buying a home in Madrid is currently a solid investment. After the boom and bust in 2010 the market has settled and is slowly growing again. Property prices are up to 4 times less than in Paris or London and rental yield has improved to an average of 5% in 2016.
If you’re moving to Madrid with your family some of the best locations to buy homes are in the north and just north of the city center. At the northern edge of the city we have nice areas such as Montecarmelo, Las Tablas, Sanchinarro and Arroyo Fresno. These are great locations for middle class and upper middle class families. There are also the highly exclusive areas, Mirasierra and Fuentelarreina, which are mostly large detached villas with large private yards and fences.
Just north of the city in the suburb of Alcobendas you can find La Moraleja, El Soto de La Moraleja and El Encinar. Here you can find more exclusive homes and villas as well as gated apartment communities. If you go north a bit further you have a few more exclusive areas and gated communities offering mostly private villas. Due to the further distance from the city, these areas such as Fuente del Fresno and Santo Domingo have a reduced price tag.
Costs for Buying Properties in Madrid
To purchase a home in Madrid you have the following fees:
- Notary Fees – All notary fees add up to around 7% of purchase price. Included in notary feeds is the AJD -documentation fees – which is .40% and .75% of purchase price in Madrid, depending on price.
- Land Registry Fees (IAJD) – It is between .5% and 1.5% purchase price.
- Legal Fees – usually about 1.5% of agreed purchase price plus IVA.
- Transfer Tax (ITP) – 6% in Madrid and 4% for people with large families if they live in the home.
- IVA (Tax) – 10% for new properties (4% for government protected properties) and 16% for lots and commercial buildings
You pay IVA for new properties or the transfer tax for used properties, but not both expenses.
To own the home you have the following costs:
- IBI annual tax – IBI costs are based on cadastral value of the property, which is usually between 0 ,4% and 1,3% of said value.
- Garbage collection – The average cost for Madrid is 60 euros per year.
- Community charges –If you live in an apartment or a housing community with common areas. It can normally range from 100-300 per month.
- Insurance – You must own house insurance and life insurance (for loan payment) when acquiring a loan. House insurance is on average between 200-400 euros per year and life insurance greatly depends on sex, age, and other factors but can range from 200 to 800 per year.
Feel free to contact us if you have any questions about purchasing your home in Madrid.