It is logical to want to know how much we are going to spend before starting and deciding if we want to go ahead with this huge decision.
Like everything related with construction – and not just because of who we are – it is always recommended to contact an architect before making the wrong decision, especially if you’re not familiar with this world. A good architect can help you save a lot of money by assessing the purchase of the plot and optimising the design of your home in the project phase.
One of the key pieces of information that an architect needs to manage the cost of the construction is how much they plan to spend, which seems obvious right? The best method is to establish a spending ceiling, or room for the architect to manoeuvre. Like in any business transaction, you get what you pay for. We shouldn’t kid ourselves, no one is going to get a Mercedes for the price of a Renault, and so why in construction do people tell us something that they know is a lie?
Once here we can consider any highly variable costs like the cost of the plot, and others that could be more manageable, that typically sit within the price brackets indicated below:
PLOT
If we don’t already have one, logically the cost of the plot is going to depend on the choice that is advised by the architect. When it comes to choosing one, take the following into account:
- Land law. Am I allowed to build here, and if so, how many metres can I build on? Type of building, use, suitability for building etc…
- Type of terrain. Its composition and terrain. As there are different foundation systems, we know that that it does not cost the same to build a house on a steep slope as on the flat, or in expansive clay as sandy soil.
You can find a link to our calculator here. It is not especially rigorous, but it will hopefully give you an idea.
CONSTRUCTION
This is the most significant part of the whole operation and depending on the design and the quality of the finishings, usually costs between €800/m2 and €1,600/m2. The top amount could also indicate “what you are willing to spend”, as it is better to have the minimum it will cost to build a house from scratch. To avoid mistakes, we would estimate an average cost for new builds as €1,200/m2. To clarify, it should also be mentioned that this square metre must have a constructed area with porches and non-enclosed spaces calculated at 50%.
TECHNICIANS
The essentials: quantity surveyor (technical architect or rigger) and architect. The quantity surveyor manages and certifies that everything is carried out according to the plan, and the architect develops the project. Beyond a surveyor and architect, everything else is extra, and without a project there is no quantification of the work to be carried out. Along the way you may also end up paying more than the fees for the technicians who would help manage the budget. You would be left with a relatively more expensive house without legal guarantees that as I say, could cause more headaches in future. Take a look at this post about the Architectural Project Phases in Spain for more information. In terms of cost, a decent technical team will cost between €100/m2 and €200/m2, without assuming that they are going to do training with our house or charge commission somewhere, personally I recommend avoiding maverick technicians and contract someone with experience in the area, and that can definitively offer guarantees.
BUILDING PERMITS
This cost varies according to each town council, so to avoid mistakes I recommend assuming a 5% of the official budget of the works, which is indicated in the project as “Material Execution Budget” (PEM in Spanish). It will also include the Construction, final and Works Tax (ICIO) as well as administrative fees.
COSTS LINKED TO THE ECONOMIC TRANSACTION
- When buying the plot: notary and registrar fees (€1,000 minimum), Property Transfer Tax (between 10-21% depending on who you buy it from) and an allowance for other taxes (approximately 1.5%).
- Financial costs to apply for a mortgage to build the house: the mortgage registration fees are incurred by the bank, not by the price of the project (€300 approx.).
CONSTRUCTION TAXES
- The prices per square metre are usually provided without VAT. In the case of the builders, you could pay VAT of 10% (reduced for renovations) or 21% for other projects, then for technicians it will be 21% also (Spain 2021)
To visualise all this tangle of percentages you can find a graph below to help clarify the situation:
