To talk about the most expensive cities in Spain, various factors must be taken into account, such as the cost of living, income level, the cost of housing and taxes. Various economic studies, including those carried out by the kelisto.es web portal and the insurance company Hellosafe, determine that the most expensive cities in Spain to live in are Barcelona and Madrid.
So, according to the study carried out by Hellosafe, the city of Barcelona is not only the second largest city, but also the most expensive in Spain in terms of cost of living. Contrary to what many people may think, the most expensive city in Spain is not its capital, but the city of Barcelona.
In which city is housing more expensive?
The city of Barcelona is not only considered the most expensive city in Spain, but it also stands as the most expensive and most difficult city to buy a home, with an average cost of 4,050 euros per square meter. This is based on the average income, which varies according to each community or each province.
Based on this analysis, we have that the average income in Barcelona is 1,919.90 euros/month, while the square meter of property reaches 4,050 euros. They are followed, in this ranking of cities where housing is more expensive, by the Balearic Islands , with an income of €1,793.53/month and an average cost of €3,647/m², and Madrid, with an income of €2,001.36/month. and a cost of €3,929/m².
On the other hand, taking into account that the average cost of rent in Spain is 676 euros per month, the city with the highest rental rates is also Barcelona, with an average cost of 1,278 euros for an 80-square-meter apartment. Being followed in this ranking by Madrid, with a price of 1,150 euros per apartment. In percentage terms, 89.1% and 70.1% above the average respectively.
In conclusion, if you are thinking of buying a home, either as an investment or to live with your family, the ideal would be to avoid these cities. Since Barcelona, the Balearic Islands and Madrid are listed as the 3 most expensive cities in Spain to buy a home in 2023.
In which city do you pay more taxes?
The amount of taxes paid for the purchase of a home in Spain varies depending on the Autonomous Community in which it is located. In general, the most common taxes are the Property Transfer Tax and Documented Legal Acts (ITP and AJD) and the Value Added Tax (VAT).
Regarding the ITP and AJD, the autonomous communities have the ability to establish their own rate, so the tax rate may vary from one region to another. It is essential to determine the taxes to be paid based on the autonomous community in which you are to avoid unpleasant surprises. For example, Barcelona is the Spanish city where the most taxes are paid for the purchase of a home.
11% (ITP+AJD) must be paid in taxes on a median home (90 m²) of 411,029 euros, which is equivalent to a loss of 45,400 euros. In other words, Barcelona is the Spanish city with the highest tax burden for the purchase of a used home of 90 square meters or less.
In general, the most important tax to take into account when buying a new home is VAT and in the case of used homes, the most important tax is the Property Transfer Tax (ITP), which in Barcelona can reach 11%. Therefore, if you are looking to buy a house in Barcelona, you should take into account that taxes are significantly high compared to other cities.
The Top Cities To Invest In
According to data from Fotocasa, in January 2020, before the coronavirus pandemic, Barcelona was the second most expensive city in the country to rent a flat. It averaged at 17.69 euros per square meter. For buying, the same rules apply. Therefore, these are the top 5 cities that will be the best place to make an investment, and where losing your money in the long run is highly unlikely:
Ibiza
San Sebastián
Sitges
La Moreleja
Castelldefels
For more investment advice about buying property abroad, please take a look at a law company that can advise you on the implications of buying abroad.