What costs should the tenant pay and which are the landlord’s responsibility?

The debate about who should take responsibility for the costs in a rental property in Spain has caused confusion on numerous occasions. Whether you are a property owner or tenant, understanding these aspects is key to maintaining a satisfactory relationship between both parties.

In this article, we will analyse the costs that usually correspond to each party in a rental contract, unless agreed otherwise. To avoid any potential misunderstandings, it is important to broach this subject from the beginning and include any term agreed in the contract.

What costs does the tenant have to pay?

If you are going to rent a property in Spain, the first thing we recommend is that you read the contract carefully to understand your financial obligations and your rights as a tenant. This contract should contain the rental price, the deposit, the duration of the contract and cancellation terms, the associated costs and the inventory of the property, among other things. But if you aren’t sure you know how to identify if a cost corresponds to you or not, here is a list of the costs that are your responsibility as a tenant:

1. Monthly rent: Payment of the rent will be your main expense. The price for the use of the property should be agreed for a specific period of time, during which the cost cannot be changed. However, bear in mind that, from that moment, the landlord may increase the rent each year in line with the CPI (Consumer Price Index). The CPI is an indicator that measures the evolution of prices of consumer goods and services.
2. Utilities: Basic services like electricity, water, gas and internet are the tenant’s responsibility.
3. Minor repairs: This refers to repairing any minor faults resulting from the use of the property, such as a window, bulb, etc.

It is always advisable to maintain a good relationship and communication with the property owner to be able to ask any questions or concerns relating to the property.

What costs correspond to the property owner?

If you are the owner of a property in Spain and decide to rent it out, you are responsible for covering a set of costs associated with the property. Here are the costs usually paid by the landlord:

1. IBI property tax and rubbish tax (tasa de basuras): As the property owner, you continue to be responsible for paying the property tax and ensuring its legality. The Property Tax, commonly known as IBI (Impuesto sobre Bienes Inmuebles), is a yearly tax that all property owners must pay in Spain, regardless of whether the property is lived in or not. If there is a separate bill for rubbish collection (it is often included in the IBI or in the water bill), this will also be the property owner’s responsibility.
2. Community fees: If your property forms part of a community, in other words, it isn’t a detached property, you will need to pay community fees. These fees are the property owner’s responsibility, in addition to the extraordinary payments (derramas) that may arise to cover repairs. Some property owners try to reach an agreement so that the tenant pays this fee. However, most opt to include this cost in the rental price. Extraordinary payments are always the property owner's responsibility. If an agreement is in place, it must be detailed in the contract.
3. Major repairs: Unlike minor repairs that may be the tenant’s responsibility, as a property owner you must bear the costs of major repairs where necessary to maintain the habitability of the property. This includes repairing the washing machine, oven, boiler, etc. It also includes other important facilities and elements of the property.

You can get more detailed information about all of these costs in our article Fixed costs that you will pay as a property owner in Spain.

It is important to bear in mind that laws and regulations may vary, so it is recommended that you consult a property professional or specialist lawyer to make sure you meet all legal and financial obligations as the owner of a rental property.

Who pays for home insurance in a rented property?

Home insurance is an expense that can be either the property owner or tenant’s responsibility. To understand what we mean, it is important to understand first of all what constitutes the building (continente) and what constitutes the contents (contenido) of a property:

• The ‘continente’ is the building itself, in other words, its structure and installations. It is what we could call ‘buildings’ in English.
• The ‘contenido’ or contents of the property refers to everything inside it, including furniture, household appliances, jewellery, clothing, pictures or any other personal belongings.

The property owner is responsible for taking out home insurance that covers any problem relating to the building. This insurance will guarantee the repair of any damage to the property and will provide Public Liability for any harm caused to third parties. In addition, the property owner may take out insurance against the non-payment of rent to protect themselves from potential non-payments or damage to the property.

On the other hand, although it isn’t compulsory, the tenant may take out insurance to protect the contents of the property in the event of theft or damage, in addition to their own public liability. This way, they would be protected in the event of any accident that could be attributed to them, such as damage caused to the property or other properties due to an oversight or carelessness, such as leaving a tap on.

As we mentioned earlier, it is advisable to establish from the start who will be responsible for covering this cost and make sure it is recorded in the contract.

What costs are paid upon signing a rental contract in Spain?

Signing the rental contract also involves a series of costs and payments that will be important to bear in mind:

1. If the contract is signed through an estate agency, the costs of managing the property and formalising the contract should always be paid by the landlord (property owner). Until now, it was usual for the tenant to pay a commission to the estate agent, generally the equivalent of one month’s rent. However, since the approval of Housing Act 2023, the tenant is exempt from paying commission, which must be paid by the property owner.
2. The tenant must pay a deposit which will act as a guarantee of payment of the rent and appropriate maintenance of the property. According to the Urban Rental Law (LAU) in Spain, the maximum deposit is three months’ rent, although it is more common to give one month's rent as a deposit. The property owner must bank this deposit with the corresponding body in each autonomous community.

In summary, tenants usually take care for day-to-day expenses, such as the rent and bills for services, while property owners are responsible for structural repairs and maintenance issues. Always make sure that these agreements are clearly described in the rental contract to avoid any confusion. Now you are ready to start your search for your rental property or, if you are a property owner, to advertise it and find your new tenant.