The cost of building a house in Spain: every expense, from plot to keys

If you have decided to build your own house on the Costa del Sol rather than buy one ready-made, I think you have made a sound decision. You get a house built exactly to your brief and to your taste, and you strip out the margin a professional developer would otherwise add on top. In Spain you do this as an autopromotor: a self-builder who is legally the developer of their own home, with every obligation that carries, and with the full cost of building a house in Spain landing on you rather than on a developer.

The other side of it is that you are starting a process you do not know. What tends to happen is this: the self-builder arranges finance for the plot, the builder and the architect, and then the rest of the costs turn up one at a time, unbudgeted. This is where people get caught out. The point of this post is to make sure that does not happen to you.

What follows is the whole picture: every expense that will appear over the course of the build, in roughly the order it arrives.

• The plot. The first cost of all. There may be an agent’s commission if you buy through an estate agency, and there will be notary and Land Registry fees plus the purchase tax that goes with it. Plot prices vary enormously with 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, was in the region of €120,000 at the time of writing, in 2017.
• The design architect. A full design package, outline and technical drawings together with the health and safety study (proyecto básico y de ejecución with estudio de seguridad y salud), works out at around 5% of the construction cost.
• Planning permission and construction tax. Next come the town hall fees for the building licence (licencia de obras), and on top of those the construction tax. Municipal licence 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%, although it varies from one town hall to the next.
• Surveys. You will also need a topographical survey of the plot and a ground investigation. The topographical survey comes to somewhere around €300-400 on a normal plot; the geotechnical report depends on how complicated the ground is, and may run to about €1,000.
• The builder. Once the licence is granted you need the contractor’s price for the works. This is the single biggest cost a developer carries. It varies with specification and with the type of construction, but as a benchmark, the Málaga architects’ association (Colegio de Arquitectos de Málaga) put construction at €926 per m² in its 2017 cost figures. One recommendation on payment: pay for work already carried out and signed off by your own technical adviser, never in advance. It avoids surprises.
• Ten-year warranty and independent inspection. As the developer you have to cover the seguro decenal, a ten-year structural insurance policy, roughly Spain’s answer to a UK structural warranty, and the independent inspection body the insurer requires (OCT). A self-builder is allowed to waive it, but the waiver is then recorded in the deed, and that can cause problems when you come to sell. The policy is in the region of €3,000 and the OCT around €2,000.
• Site supervision during the works. Three separate appointments: the architect as site director (director de obra), the technical architect who supervises the works on site (aparejador, formally the director de ejecución de obra), and the health and safety coordinator. These fees are set against the PEM (presupuesto de ejecución material), the bare build cost before the contractor’s overheads, profit and VAT. The site director usually charges around 3% of it, 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 apply for the first occupancy licence (licencia de primera ocupación), the Spanish equivalent of a completion certificate and what signs the house off as habitable. Its fees usually come to around 0.9% of the PEM. You will need the building logbook (libro del edificio), which may or may not sit inside your architect’s original fee, so it is worth checking at the start. Then the notarial deed and the Land Registry entry, both charged on the value you declare, which you can also ask about at the start, and the tax that falls due on it: stamp duty (Actos Jurídicos Documentados) runs at roughly one per thousand of the declared value. Finally, the utility connections. Every supplier charges to open the account, and it is worth asking how much before you need it.

Broadly, those are the steps you will work through over the course of the build, and every one of them costs money.

Here is a summary table of everything set out above.