If you have decided to build your own house rather than buy one ready-made, I think you have made an excellent decision. You will have a house built exactly around your needs and your style, and because you will be acting as a self-builder (autopromotor), you will cut out the margins a professional developer adds to a finished home, so the house will cost you less than buying the same one ready-made.
On the other hand, you are about to set out on a road you do not know, and a few tips will not go amiss. Something that happens to many people building their own home is that they do not really know which costs they will incur as self-builders: they take out a loan to pay for the plot, the builder and the architect, and then unexpected costs keep cropping up. Let’s try to make sure that does not happen to you.
My aim in writing this post is to give you an overview of all the costs that will come up over the course of the build.
- The plot. The first cost of all is buying the plot. There may be an agent’s commission if you buy through an estate agency, and there will also be notary and Land Registry fees, plus the corresponding taxes. Plot prices vary depending on location, views and so on. As a guide, a 400 m² plot in Torremolinos with sea views, allowing 120 m² of building plus a basement, could be in the region of €120,000 at the time of writing.
- The design architect. Next comes the architect who designs the house. A basic design and construction project (proyecto básico y de ejecución), including the health and safety study (estudio de seguridad y salud), can come to around 5% of the construction cost.
- Building permit and construction tax. Then come the town hall fees for the building permit (licencia de obra), to which you must add the construction tax. Municipal permit fees usually sit at around 2.2% of the construction cost, and the construction tax (Impuesto de Construcciones y Obras, ICIO) at around 4.5% of the construction cost, although this depends on the town hall.
- Surveys. You will also need a topographical survey of the plot and a geotechnical study. The topographical survey will come to around €300-400 on a normal plot; the geotechnical study depends on how complex the ground is, and may be in the region of €1,000.
- The builder. Once the permit is granted, you will need to get the building contractor’s price for the works. This is the single biggest cost a developer faces. The construction price varies with the specification and the type of construction but, as an estimate, the Málaga College of Architects (Colegio de Arquitectos de Málaga) set a figure of €926 per m² built in its 2017 construction cost guide. One recommendation on payment: pay only for work already carried out and certified by your own technical adviser, never in advance, to avoid surprises.
- Ten-year insurance and independent inspection. As the developer, you will have to cover the cost of the seguro decenal, a ten-year structural insurance policy, and of the independent technical inspection body the insurer requires (OCT). As a self-builder you can choose not to take it out, but the deed will then state that no ten-year insurance was taken out, and that can cause problems when you come to sell. The policy can be in the region of €3,000 and the OCT around €2,000.
- Site supervision during the works. During construction you will have to appoint an architect as site director (director de obra), a building engineer (aparejador) to supervise the execution of the works (formally the director de ejecución de obra), and a health and safety coordinator. These fees are calculated on the PEM (presupuesto de ejecución material), the bare construction cost before the contractor’s overheads, profit and VAT. The site director usually charges around 3% of the PEM, as does the aparejador (another 3%), and the health and safety coordinator between 0.5% and 1%.
- Completion, deeds and connections. Once the works are finished, you will have to apply for the first occupancy licence (licencia de primera ocupación), the document that signs the house off as habitable, and pay the corresponding fees, which usually come to around 0.9% of the PEM. You will need the building logbook (libro del edificio), which may or may not be included in your architect’s initial fees, so it is worth checking at the start. Then come the notarial deed and the Land Registry entry, whose costs depend on the value you declare in the deed (you can also ask for prices at the start), and the taxes due on them: stamp duty (Actos Jurídicos Documentados) is around one per thousand of the amount declared in the deed. Finally, you will have to sign up with the various utility companies; each one charges a connection fee, which it is worth checking in advance.
Broadly speaking, those are all the steps you will go through over the course of the build, and each of them will involve some cost.
Below is a summary table of everything discussed above.
| Item | Order of magnitude |
|---|---|
| Plot (400 m², Torremolinos, sea views, 120 m² buildable plus basement) | Around €120,000 (at the time of writing) |
| Design architect (proyecto básico y de ejecución + health and safety study) | Around 5% of construction cost |
| Building permit fees | Around 2.2% of construction cost |
| Construction tax (ICIO) | Around 4.5% of construction cost |
| Topographical survey | €300-400 |
| Geotechnical study | Around €1,000 |
| Construction | €926/m² (Colegio de Arquitectos de Málaga, 2017 construction costs) |
| Ten-year structural insurance (seguro decenal) | Around €3,000 |
| Independent inspection body (OCT) | Around €2,000 |
| Site director (director de obra) | Around 3% of PEM |
| Building engineer (aparejador) | Around 3% of PEM |
| Health and safety coordinator | 0.5-1% of PEM |
| First occupancy licence fees | Around 0.9% of PEM |
| Stamp duty (Actos Jurídicos Documentados) | Around 1 per thousand of declared value |
| Building logbook, deed, Land Registry, utility connections | Ask for prices at the outset |
