On the first day of the New Year 2019, the Spanish government made a significant decision to raise the national minimum wage by 22.3%, reaching 900 euros per month, which is well-received by many. At the same time, immigrants and citizens in Spain are very concerned about how various prices will fluctuate in the new year. It is reported that although wages have increased, electricity and fuel prices have also risen.
1. Wages, Pensions, and Various Taxes
1. Wages
The Spanish government announced that starting from January 1, 2019, the minimum wage in Spain will be raised by 22.3%, reaching 900 euros. This is the largest increase since the salary adjustment in 1977. This move will benefit 2.5 million low-income individuals in Spain, and the public has expressed great joy.
2. Pensions
Pensions in Spain are already considered relatively generous among European countries. Following this wage adjustment, pensions in Spain will also increase by 1.6%, with the average minimum pension now being 835.8 euros per month. Single elderly individuals can receive pensions ranging from 642.9 to 677.4 euros per month.
3. IBI Property Tax Rate
In 2019, the property tax rates in approximately 1,179 cities and regions in Spain will be reduced by an average of 1.92%, which is undoubtedly good news for many homebuyers. However, each city’s municipal government has the authority to adjust prices based on the local real estate market, but the increase cannot exceed 5%, and the decrease cannot exceed 2%.
4. IVTM Vehicle Tax
In 2019, the vehicle tax in Spain will remain unchanged, but motorcycles and mopeds will be included in the tax range.
2. Daily Living Expenses
1. Electricity Costs
Data from the European Union's statistical office over the past decade shows that from 2007 to 2017, the price of electricity in Spain has continuously risen, reaching 57 euros per megawatt-hour, an increase of 56%, the highest level in history. The Spanish public has repeatedly called for a reduction in electricity prices, and the Ministry of Ecological Transition announced in September 2018 that it would lower the electricity generation tax, but experts believe this move is of little significance. The price of electricity is more dependent on market factors, so the outlook for electricity prices in Spain in 2019 is not optimistic.
2. Water Costs
Water costs in Spain are determined by each autonomous community, so there is a significant difference in water prices across regions. For example, in Catalonia and Madrid, in 2018, Catalonia raised water prices by 11.8%, but in 2019, it will remain unchanged. Meanwhile, Madrid has been implementing the water prices set in 2015 without any increases, and it will also remain unchanged in 2019.
3. Natural Gas Costs
In 2018, the price of natural gas in Spain increased by 6%. Similar to the pricing principle of electricity, the government-controlled tax portion will be reduced by about 4.6% in 2019. Considering the market fluctuations are not significant, experts believe that the price of natural gas will decrease this year.
4. Bottled Gas Prices
There is a high demand for bottled gas in Spain. Considering that the price of bottled gas increased by 4.93% in November 2018, the Spanish government has decided to keep this price unchanged in 2019. Currently, the average price of a bottle of bottled gas is 15.33 euros.
5. Internet Costs
Mobile phone operators under Telefónica in Spain announced that they will increase the fees for some mobile plans and internet products in 2019. Experts predict that other major operators will also implement various forms of price increases.
6. Drug Prices
Since November 27, 2018, the Spanish government has begun to lower drug prices, with prices for anti-inflammatory drugs, various eye medications, and drugs for treating arthritis and hypertension decreasing. Starting in 2019, the prices of more than 1,200 types of drugs have significantly decreased.
7. Housing Prices
In the past year, the average national housing price in Spain has increased significantly, by as much as 11%, with rental prices even higher, leading many to worry that a new round of real estate bubbles is imminent. Fortunately, industry experts indicate that in 2019, housing prices in Spain will see slight growth, with the growth rate far lower than in 2018. Housing prices are expected to stabilize or even slightly decline by 2020.
3. Transportation Costs
1. Toll Fees
In recent years, toll prices in Spain have remained stable. Starting in 2019, toll prices on Spanish highways will increase by 1.67%.
2. Fuel Costs
At the end of 2018, the international crude oil price was 53 dollars per barrel, the lowest price of the year. However, due to the Spanish government raising the diesel tax by about 30%, a significant increase in diesel prices in 2019 is inevitable. Experts predict that diesel prices in Spain will be about 8% higher than in 2018, approximately 0.14 euros.
3. High-Speed Train Ticket Prices
Renfe, the national railway of Spain, announced that starting in 2019, the ticket prices for intercity trains (commonly known as "little trains") and long-distance high-speed trains will remain unchanged, while the prices for medium-distance high-speed trains will increase by 7%. The national railway also emphasized that the ticket prices for high-speed trains between Madrid and Barcelona will remain unchanged.
4. Airfare Prices
According to the Spanish Ministry of Public Works and Transport, the airport tax in Spain was reduced by 2.2% in 2018, which received a good market response, so the airport tax will remain unchanged in 2019. The airport tax accounts for nearly one-third of the airfare, so experts predict that there will not be significant fluctuations in airfare prices in 2019.
5. Taxi Fares
In 2019, taxi fares in several cities in Spain will change. For example, in Madrid, after exceeding the starting fare, the price will increase by 0.1 euros per kilometer during the daytime and by 0.2 euros per kilometer during the nighttime, with increases of 2.5 euros and 3.1 euros per kilometer during holidays, respectively. Although Barcelona has not yet announced the specific increase, it is predicted to rise by 2.6% compared to the previous year. The good news is that the ticket prices for public transportation facilities such as the metro, buses, and Renfe in Madrid, Barcelona, and Valencia will remain unchanged.
