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What It's Like - Cost of Living
Last Updated 1 October '11

It isn't possible for me to give you more than generalities about the cost of living in Spain. Prices vary by area, with the cost of living much higher in the urban centers such as Madrid and Barcelona than in small towns and rural areas like the one I live in.

In the large cities, the price of housing is high relative to the other costs of living. Spaniards who didn't buy a house or apartment before the housing "boom" (and, later, the bust) now often find it necessary to pay more than half their average income to get average housing, which is a very high percentage. On the other hand, food costs are fairly low. As a result, a lot of city dwellers live in smallish apartments and have social lives centered in cafés and restaurants rather than their homes.

You can Google "cost of living in Spain" and get a lot of English-language hits that offer opinions from foreigners (mostly British). I can't vouch for any of them and none that I've seen reflect my experiences living out here in rural Galicia. What I can do, though, is give you some of my actual costs and you can compare them to similar items where you live.

Cost of Living in Rural Galicia

  • FOOD - I don't have accurate records but I'd estimate I spend about € 60 - 80 per week. That's just for me and two dogs. Careful family shoppers would almost certainly pay a lot less per-person than that for their families' groceries.
     
  • MORTGAGE/RENT - No info. Most folks around here are long-time residents and own their homes outright. But some people in town who bought during the now-busted housing bubble are paying as much as 50% of their income on mortgages. In some places, rent increases are government-controlled. So people who have rented the same place for many years are paying ridiculously low rent. (The downside is that the owners have little incentive to maintain or improve the properties.)
     
  • TAXES
    • vat VALUE-ADDED TAX - This is a biggie! Most things you buy here have a VAT of 18% added. Even such necessities as electricity, gas and telephone bills. A few items are taxed at 4% or 8%. (See chart at right.)
       
    • INCOME TAX - Personal income tax rates in Spain are progressive with a highest rate of 43% for workers with more than € 53,407 of taxable income. Individual with a gross income less than € 22,000 don't have to file. In general, pension and Social Security income is exempt.
       
    • PROPERTY TAX - Compared to urban areas, rural property tax is dirt cheap. My house and (1-acre) lot costs € 38.78/year! A small (0.77 acre) piece of farmland Marivi inherited is taxed at € 2.68/year. (The farmland is used by a local dairy farmer who maintains it in good condition.)
       
    • CAR REGISTRATION - This is set locally and is based on engine displacement. My 14-year-old Peugeot costs € 173.21/year - no matter how old the car gets before it's junked.
       
  • Diesel is cheaper than gas ENERGY - In general, they're higher than in the USofA. Auto fuel is a lot higher here but not as high as in some other parts of Europe. Petroleum-based fuels, such as gasoline, diesel, butane and propane fluctuate with world crude prices. Electric rates are less volatile but creep up every year or so.
     
    • ELECTRICITY - I average about € 130 per month lately. The kitchen oven, clothes dryer and lights are the big users.
       
    • PROPANE - Used for the kitchen stovetop, space heating and hot water. I average € 176 per month, with highest useage in the winter months, naturally. (Natural gas, where available, is less expensive.)
       
    • AUTO FUEL - I use diesel fuel. Gasoline usually costs about €  0.10 - 0.15 more per liter. (That's about € 0.38 - 0.56 per gallon more.) Gas and diesel fluctuate almost weekly and follow the worldwide price of crude oil. The chart on the right shows the actual diesel prices I've paid (in US$ per gallon) since January 2002. I only drive when necessary and don't take long trips, so I usually use less than 50 liters (13 gallons) per month.
       
  • CURRENCY - For a foreigner with only "non-euro" income (like me) the euro exchange rate has a major influence on the actual cost of living. It affects everything you buy. The chart below shows how the exchange rate has fluctuated (and the U.S. dollar has weakened) since the euro became Spain's currency in 2002.
     
Exchange rate
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