Self-promotion expenses in a home

Cmyk-arquitectos

What are the costs of self-promotion in a home? This is one of the first questions asked by people who want to build their own houses in Spain.

Logically, there are construction costs that are inevitable. But there are many others that you could skip if you want to save money (especially if you seek advice from specialists).

At first you will have to face many calculations, as well as request numerous quotes.

But generally speaking, you shouldn't be afraid of self-promotion, since it is an enriching process that also offers you the possibility of building the home of your dreams.

If you become a self-developer you can build a custom house. Additionally, you can adjust it to your own tastes, requirements, specifications and needs.

You will literally be free to make construction and design decisions, rather than adapting to standard housing conditions.

WHAT IS A HOUSING SELF-PROMOTER?

The first thing we must specify is that, under the figure of the self-promoter, the building will have personal or family use.

In other words, you cannot have intentions of promoting it to make money. In fact, therein lies the difference between a housing developer and a self-promoter.

The first of them promotes works with the purpose of making money. But the second understands perfectly well that with self-promotion he will build something for himself.

So the self-promoter will only have to pay 10% VAT on the Contract Budget.

While the promoter must pay 21% VAT, since he wants to obtain benefits from the works he promotes.

On the other hand, you must keep in mind that self-developers cannot rent their homes either (in that case they will be classified as promoters).

As a self-developer you will be able to organize the construction of your home from start to finish. But this is not all; You can also legalize it for personal use and take advantage of other benefits, such as:

  • Choose the design of the home, plot or area.
  • Address industrial and technical details.
  • Define the distribution of the home so that it adapts to your construction needs.
  • Adapt your home to the style you like the most: modern, avant-garde, minimalist, rustic, etc.
  • Choose construction materials.
  • Manage the self-promotion budget.

WHAT ARE THE EXPENSES OF SELF-PROMOTION IN A HOME?

Before explaining to you what the autopro expenses aremotion In a home, which you cannot ignore, you need to know the average cost per square meter in Spain.

That is the starting point to better understand the rest of the costs and expenses associated with self-promotion in this European country.

Currently the average cost of building a home is 800-1000€/m2 (in low qualities).

With the latter we mean that the home will have very simple construction materials, or that it will not have air conditioning installations, (among other important details).

Assuming you want to build a 100m house2your starting cost will be approximately €100,000

Being a little more realistic, we must say that the cost of building a home, currently in Spain, exceeds 2,000/m2.

Although this cost includes all the expenses that must be assumed during the construction work, as well as:

  1. Housing registration.
  2. Connections for electrical and water installations.
  3. Sewerage.
  4. Licenses.
  5. Declaration of new construction.
  6. VAT.
  7. Technician expenses.
  8. Consumption, etc.

SELF-PROMOTION EXPENSES THAT YOU SHOULD KNOW

Next, you will know what the self-promotion expenses are in a home that you should know and analyze in detail:

1. Cost of urban land

The factor that most influences the cost of Urban ground It's your location. But it is also valid to mention other important elements, such as:

  • The orientation.
  • If the terrain is flat or sloping.
  • The morphology of the farm.
  • Urban use.

For their part, the notary and registrar expenses tend to be equivalent to 0.5% of the purchase price of the land.

Additionally, you should know that, after completing said purchase, you will have to pay certain taxes.

Although the tax will depend, fundamentally, on who the seller of the land is, if it is an individual, you will have to pay the Property Transfer Tax.

Now, what if the seller is a company? In that case you must pay the 21% VAT, at the same time as assuming the Tax on Documentary Legal Acts (this is equivalent to 1.5% of the cost value of the new work).

2. Technical fees

There are three main types of technical fees that we will briefly explain below:

self-promotion expenses

Includes the topographic study; the same one that allows us to know the geometry of the plot exactly.

Like the geotechnical study, with this the characteristics of the land are known, and from that data the most appropriate foundation for the home is designed. (The costs of these services range between €1,000 and €1,350).

  • Architect's fees

The architect fees in Spain that derive from the preparation of the project, tend to be equivalent to 4% or 6% of the Material Execution Budget.

In addition, they must reflect both the complexity of the project and the surface area of ​​the home itself.

These self-promotion expenses are linked to the construction management of the architect, the quantity surveyor and the health and safety coordinator.

In this case, the fees of each one range between 2% and 3% of the Budget of material executionalso known as PEM

3. Municipal license

If you are wondering what the self-promotion costs are for a home, related to the municipal license, we must tell you that they are not standard.

This means that these expenses depend on each municipality. But, generally, the total is equivalent to 4% or 5% of the PEM

For its part, with the urban planning license fee, the city council can verify whether your home project complies with the precepts established in municipal regulations.

Additionally, you need to present the Execution Projectand pay the Tax on Constructions, Installations and Works, to obtain the construction permit.

You must also complete the deposit of two bonds: the one for construction waste management and the one for possible damages that the public road could suffer.

However, if at the end of the work everything is in order, you will receive a refund of both deposits.

4. Execution of the work

The costs of carrying out the work are one of the most important. So much so that they can represent approximately 40% of your self-promotion budget.

It is important to highlight that the construction budget refers to the sum of the costs necessary to execute the items that appear in the project measurements.

Prices vary depending on the land, the characteristics of the construction and the construction company.

Although there are also factors that cannot be underestimated, such as:

  • Quality of finishes and construction materials.
  • Housing surface.
  • Complexity of the work.
  • Construction quality.
  • Terrain characteristics (geology, geometry, ease of access, etc.)
  • Conditioning of the external spaces of the plot, such as fences, gardens, exterior pavements or the pool.

5. Procedures after the completion of the work

Both the architect and the surveyor must certify the completion of the work and carry out certain required tasks. Some of them are:

  • Carry out the writing of new construction

The work consists of deeding the home before a notary, as well as completing the Property Registry. Currently, registrar and notary fees are usually 0.5% of the value of the home.

  • Pay the certificate of occupancy

The certificate of habitability serves the Autonomous Community to verify whether the habitability conditions of the home are met. (Although this amount is small).

  • Cancel the fee for first occupancy license

The rate for first occupation license In Spain it can be equivalent to 1% of the Material Execution Budget.

  • Obtain supply registration

It is essential to obtain approval for the supply of water, gas, electricity and telecommunications.

Although the price depends on the company you decide to hire, it almost always averages 200 euros for each supply.

6. Mortgage expenses

Mortgage expenses should only be considered if you, as a self-developer, need to request a loan to carry out the work and the appraisal averages 300 or 400 euros.

While the constitution of the mortgage would involve notary and registration payments. (These tend to be equivalent to 0.5% of the mortgage liability).

Additionally, you must pay the Documented Legal Acts Tax, which is equal to 1.5% of the mortgage that the bank has granted you.

7. Optional expenses

You just found out what self-promotion expenses in a home are that you would have to assume, obligatorily, when starting your work. Except for mortgage expenses (if you do not need to process financing).

But it would also be good for you to know some relevant optional expenses, such as the case of contracting insurance. They include:

  • Liability insurance

It costs approximately 350 euros and covers claims for material or personal damage caused to third parties, including construction workers.

  • All risk construction insurance

Its cost would be around 300 euros and it offers you coverage for damages that the work may suffer during its execution. (Including theft of materials).

This insurance covers any structural damage that occurs in the home during its first decade after construction.

Especially if these damages affect its structure or its foundation elements, and therefore, compromise the stability and resistance of the building.

Its cost depends on each project. If it is a single-family home that has a total construction cost of less than 300,000 euros, the cost of the ten-year insurance could range between 2,500 and 2,900 euros.

DO YOU WANT TO BE A SELF-PROMOTER IN SPAIN?

At this point, you already know what self-promotion expenses in a home are that you must assume on a mandatory or optional basis.

Therefore, the question you should ask yourself right now is if you really want to become a self-promoter in Spain.

If so, you could build your dream home and participate in all aspects of the work: from the design to its conditioning.

If you are willing to immerse yourself in the world of self-promotion of homes in Spain, we invite you to contact to CMYK Architects.

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