Spain – Property Taxes

What taxes and fees apply when buying a property in Spain?

The taxes levied at the point of purchase depend chiefly on whether you are acquiring a resale (second-hand) property or a brand-new home. Spain’s primary purchase tax for buyers of existing properties is the Transfer Tax — Impuesto sobre Transmisiones Patrimoniales (ITP). Newly built homes are not subject to ITP; instead, VAT (IVA) and stamp duty (AJD) apply.

Resale properties — ITP: The buyer bears the ITP liability, and each of Spain’s autonomous communities sets its own rate, generally falling between 6% and 10%, with many regions now using progressive scales for higher-value transactions. Madrid, for instance, applies a reduced rate of 6%, making it comparatively affordable for buyers, while Catalonia and Valencia charge 10%. Andalucía levies a flat 7% rate across all second-hand purchases.

New-build properties — VAT (IVA) and stamp duty (AJD): When purchasing a newly constructed property directly from a developer, VAT (IVA) replaces ITP. This is a nationwide tax set at 10% of the purchase price. Additionally, stamp duty (AJD) is charged at between 0.5% and 1.5%, varying by region. In the Canary Islands, the applicable indirect tax is IGIC at 7% rather than VAT, plus AJD at 0.75%.

The tax base — Valor de Referencia: ITP is calculated on whichever is higher: the declared sale price or the Valor de Referencia (Reference Value) established by the regional tax authority — a government-determined figure drawn from market data intended to approximate fair market value for tax purposes. Consequently, even where a buyer negotiates a price below open market levels, the authorities may still calculate the ITP due using their own reference figure.

Notary fees: Notary fees in Spain are regulated by the state but carry a degree of flexibility depending on the property price and the complexity of the deed. The typical notary fee averages around €1,750, with the precise amount reflecting the transaction’s value and intricacy.

Land registry fees: Once the purchase deed has been signed, the property must be entered in the Land Registry (Registro de la Propiedad) — a compulsory step usually coordinated by your lawyer or gestor. Registration costs average approximately €1,000.

Legal fees: Engaging your own lawyer is strongly advisable. Legal fees are commonly around 1% of the purchase price plus VAT, though for higher-value properties a lower proportional rate may be negotiated separately.

Payment deadlines: ITP and AJD must be settled within 30 working days of signing the deeds. The tax is filed using Modelo 600 at the regional tax office, and many communities now accept online submissions and payment.

Worked example — resale property purchase at €300,000 in a region with 8% ITP (as of 2025):

Depending on the region and property type, combined taxes and fees can push the total extra cost to between 11% and 15% of the purchase price. This is broadly comparable in scale to stamp duty land tax in the UK or provincial land transfer taxes in Canada, although the Spanish system is considerably more regionalised. Always verify current figures with your regional tax office or a qualified Spanish tax adviser, as rates are established by autonomous communities and may change.

What taxes and fees apply when selling a property in Spain?

Selling a Spanish property places two principal tax obligations on the seller: capital gains tax on any profit from the transaction (addressed in detail in the following section) and the municipal land appreciation tax known as Plusvalía Municipal.

Plusvalía Municipal (IIVTNU): The Plusvalía Municipal is a locally administered tax triggered when ownership of a property changes hands, based on the notional rise in the land’s value over the period of ownership. It is computed using the cadastral value of the land element of the property and the number of years since the last transfer. The amount payable differs markedly between municipalities; sellers are advised to request an estimate from the relevant local authority before exchange.

Estate agent fees: In Spain, agent commissions are conventionally borne by the seller and typically range from 3% to 5% of the sale price, though there is no national regulation governing these rates. Fees should always be agreed in writing prior to listing the property.

Legal costs: Sellers are generally well served by instructing their own legal adviser to review the sale contract and confirm that any charges or encumbrances on the property have been discharged. Legal costs for sellers tend to be lower than those incurred by buyers, and are often structured as a fixed fee rather than a percentage of the price.

3% withholding if the seller is a non-resident: Where the seller is not a Spanish tax resident, the buyer is legally obliged to retain 3% of the agreed sale price at the point of signing before the notary and remit it to the tax authorities as an advance payment against the seller’s capital gains tax liability. Should the seller’s actual tax due be less than the amount withheld, a refund of the difference can be claimed. This represents a material cash-flow consideration for non-resident sellers who must plan accordingly.

Sellers should also confirm that the current year’s IBI (annual property tax) has been paid in full before completion, as unpaid IBI can complicate or hold up the transaction. For current information, consult the Agencia Tributaria (Spanish Tax Agency) or a locally qualified adviser.

Is capital gains tax payable on property sales in Spain?

Yes. Spain charges capital gains tax on the profit arising from the disposal or transfer of assets, including real estate. The applicable rules differ according to whether the seller holds tax residency in Spain or not.

For tax residents: Residents are subject to progressive CGT rates beginning at 19% for smaller gains and rising to 26% for larger profits (as of 2025). Gains are treated as savings income and taxed on a sliding scale, so more substantial profits are pushed into higher brackets. This approach is broadly comparable to the way property capital gains are taxed progressively in countries such as France or Germany, though the specific rates and thresholds differ.

For non-residents: A flat rate of 19% applies to capital gains from the disposal of Spanish assets regardless of whether the seller is based within or outside the EU/EEA — all non-residents are therefore subject to the same 19% rate on gains from Spanish property (as of 2025).

How is the gain calculated? The taxable gain is determined by subtracting the acquisition cost from the net sale proceeds. The acquisition cost encompasses the original purchase price together with documented renovation expenditure and professional fees paid at the time of purchase. Taxes and fees incurred on acquisition — such as ITP and notary costs — form part of the acquisition cost and accordingly reduce the taxable gain. Documented improvement costs can similarly be used to lower the amount subject to tax.

Exemptions and reliefs:

• Where you dispose of your habitual residence — having occupied it for at least three years — and reinvest the entire proceeds in a new principal home in Spain or the EU within two years, the capital gain is fully exempt from tax.
• Taxpayers aged 65 or over who sell their principal residence benefit from a total exemption, with no requirement to reinvest.
• Those over 65 selling a secondary home may also qualify for an exemption if the proceeds are channelled into a qualifying life annuity product (subject to a €240,000 ceiling).
• Capital gains may be offset against losses on movable assets — such as equities — incurred during the preceding four years.

3% withholding for non-residents: Upon completion of a sale by a non-resident, the buyer must withhold 3% of the sale price and pay it to the Spanish Tax Agency via Form 211 within approximately one month of the transaction — this sum acts as an advance payment towards the seller’s final CGT obligation.

Practical example (non-resident seller, as of 2025): Suppose you originally bought a Spanish apartment for €200,000 (inclusive of all acquisition costs) and now sell it for €280,000, incurring €5,000 in selling costs. Your taxable gain is approximately €75,000. At the flat non-resident rate of 19%, the CGT liability would be approximately €14,250. The buyer will already have withheld 3% of €280,000 = €8,400; the remaining €5,850 would then be payable via Form 210, which must be filed within four months of the sale. Always verify current rates and procedures with the Agencia Tributaria.

Are there annual property taxes in Spain?

IBI — Impuesto sobre Bienes Inmuebles: The IBI is Spain’s recurring annual property tax, payable by every property owner irrespective of whether they are resident or non-resident in Spain. It is a municipal levy collected by the local Ayuntamiento (town hall) and covers both urban and rural real estate. IBI is roughly analogous to council tax in the UK or property tax in the United States, though the calculation method differs — it is based on the valor catastral (cadastral value) rather than market value. The cadastral value is assigned by Spain’s land registry and is typically considerably lower than the open market price.

IBI rates generally fall between 0.4% and 1.1%, determined by the property type and the municipality in question. The legal taxpayer is whoever holds ownership on 1 January of the relevant year. Annual IBI bills for a standard residential property commonly range from around €200 to €800, though this varies significantly with location and cadastral value. IBI is paid once a year, usually between May and October, and can be settled online, by direct debit from a Spanish bank account, or in person at the town hall or an authorised bank branch.

Imputed income tax for non-residents (Modelo 210): Non-resident property owners must be aware that they owe non-resident income tax in Spain even when they do not let their property — this charge is referred to as IRNR or imputed (deemed) income tax. Imputed income is calculated as 1.1% of the cadastral value (rising to 2% where no revaluation has taken place during the preceding ten taxable periods), and the applicable non-resident tax rate of 19% or 24% is then levied on this figure.

Additional local charges: Many Spanish municipalities apply further annual charges beyond IBI, such as waste collection levies (typically €50–€150 per year), street lighting contributions, and special infrastructure assessments. These may appear on separate bills or be consolidated within the IBI statement.

Wealth tax (Impuesto sobre el Patrimonio): Non-residents are liable for wealth tax solely on assets situated in Spain. For properties valued above €700,000, the wealth tax rate ranges from 0.2% to 3.5% (as of 2025), though both thresholds and rates are set at autonomous community level. Some regions have effectively reduced or entirely bonified this tax for residents; non-residents generally cannot benefit from such regional reductions. Verify current figures with the Agencia Tributaria.

How is rental income from property taxed in Spain?

Rental income arising from a Spanish property is taxable whether the owner is a Spanish tax resident or a non-resident. The rules governing how that income is taxed differ substantially between these two groups.

Tax residents: Residents declare rental receipts as part of their annual IRPF (personal income tax) return. For long-term residential tenancies, residents are permitted to deduct a broad range of expenses, including mortgage interest, IBI, community fees, insurance premiums, maintenance costs, depreciation, and management charges. A 60% reduction on net rental income from qualifying long-term residential lets has historically been available, though this relief has been subject to ongoing legislative scrutiny — always confirm the current position with the Agencia Tributaria.

Non-residents — EU/EEA nationals: Non-residents who are based within the EU or EEA pay a flat rate of 19% on net rental income — that is, they may subtract allowable expenses from gross rental receipts before computing the tax. This is broadly comparable to the treatment of rental income from non-residents in countries such as France or Germany, where bilateral tax treaties typically determine which country holds primary taxing rights.

Non-residents — outside the EU/EEA: Non-residents originating from outside the EU/EEA are taxed at 24% on their gross rental income (as of 2025), with no entitlement to deduct expenses. This distinction is significant, as the effective tax burden for non-EU/EEA landlords can be markedly higher than for their EU/EEA counterparts.

Reporting obligations: From 2024 onwards, non-residents are required to report rental income on an annual rather than quarterly basis. For income earned during 2024, the return was due between 1 and 20 January 2025. Non-residents submit their returns using Modelo 210. Where a property is partly rented out and partly used personally during the year, two separate returns are required: one covering the periods during which the property was let, and another covering the days when it was available for the owner’s personal use.

Short-term and holiday lets (e.g. Airbnb): Short-term tourist rentals (alquiler vacacional) are subject to additional licensing and registration requirements that vary by autonomous community. Income from such lettings is broadly taxed in the same manner as other rental income (19% for EU/EEA non-residents on net income; 24% for others on gross income), but operators must also comply with local tourist accommodation regulations and, in some regions, collect and remit tourist taxes on behalf of guests. Check the current licensing requirements for your specific municipality before listing a property for short-term rental.

Does inheritance tax apply to property in Spain?

Yes. Spain imposes inheritance tax — Impuesto sobre Sucesiones y Donaciones (ISD) — on property that passes on death. Both residents and non-residents who inherit Spanish real estate are liable. The rate of tax ranges from 7.65% to 40% according to the value of the estate and the family relationship between the deceased and the beneficiary.

Regional variation is critical: Inheritance tax in Spain is administered to a significant degree at autonomous community level, and the disparity in tax treatment between regions is striking. Certain communities — most notably Madrid and Andalucía — extend very generous reductions or bonifications of up to 99% to close relatives such as spouses, children, and parents. Other regions apply the national scale with fewer concessions. As a result, the tax payable on an identical inherited property can differ by tens of thousands of euros solely depending on the autonomous community in which it is located.

Allowances and thresholds: The national framework provides allowances that are calibrated to the heir’s relationship with the deceased, grouped under categories I through IV. Spouses, children, and grandchildren (Groups I and II) receive the most favourable treatment, including a base state allowance before any tax is levied. Distant relatives and unrelated heirs face both higher rates and smaller effective allowances. Beneficiaries with disabilities may also be entitled to supplementary reductions.

Non-residents and foreign heirs: Non-residents who inherit Spanish property must pay ISD in Spain regardless of where they live. Following a 2015 European Court of Justice ruling, EU and EEA nationals who are non-residents are entitled to apply the more advantageous regional rules rather than being restricted to the less generous national framework, broadly aligning their position with that of residents. Nationals of countries outside the EU/EEA may be subject to the national scale without access to regional bonifications, though this area of law continues to evolve — specialist advice is essential.

Double taxation treaties: Spain maintains bilateral inheritance or estate tax treaties with a limited number of countries; France and Sweden are among those with relevant agreements in place. Many countries — including the UK and the United States — do not have a comprehensive inheritance tax treaty with Spain, which means heirs may face simultaneous tax exposure in both Spain and their country of residence. Always engage a cross-border specialist before assuming that treaty relief is available. Consult the Agencia Tributaria and the appropriate regional tax offices for current rates and allowances.

Does gift tax apply to property transfers in Spain?

Yes. Lifetime transfers of Spanish real estate — known as donaciones — fall under the same Impuesto sobre Sucesiones y Donaciones (ISD) framework as inheritances, although the mechanics and effective rates can diverge. The gift tax is payable by the recipient (donee) rather than the person making the gift.

Rates: Gift tax in Spain operates on the same sliding scale as inheritance tax, with rates running from 7.65% to 40% depending on the value transferred and the relationship between the parties. Close family members — spouses, children, and parents — benefit from relationship-based allowances and, in many autonomous communities, substantial bonifications.

Regional variation: As with inheritance tax, the practical gift tax burden varies enormously from one autonomous community to another. Several regions — including Madrid and Andalucía — provide considerable reductions for transfers between close family members, while others adhere more closely to the national scale. For gifts of real estate, it is generally the location of the property rather than the parties’ place of residence that determines which regional rules apply.

Capital gains for the giver: A frequently overlooked consequence: the person making the gift (the donor) may simultaneously incur a capital gains tax liability under IRPF or IRNR, as though the property had been sold at its market value on the date of the transfer. This means a single lifetime gift can trigger gift tax in the hands of the recipient and CGT in the hands of the donor. Professional tax advice is indispensable before proceeding with any property gift.

Practical tip: Given the combined exposure to gift tax and potential CGT, gifting property in Spain is rarely a tax-neutral transaction and requires careful advance planning. Consult a locally qualified tax adviser or a gestoría with experience in ISD matters before initiating any inter-generational property transfer.

Are there any tax advantages or incentives for buying property in Spain?

Spain provides a range of targeted reliefs and reduced rates, though most are regional in character and conditional on specific eligibility criteria.

Reduced ITP rates for specific buyer groups: Numerous regions offer lower ITP rates or deductions for primary residences, large families, buyers with disabilities, young purchasers, protected housing transactions, or rural repopulation initiatives — each subject to particular conditions and price ceilings. First-time buyers under the age of 35 may qualify for reduced rates of approximately 4%–5% in eligible regions. These concessions are typically available only to persons who are tax residents in Spain.

New-build VAT at the reduced rate: The national VAT rate applied to newly constructed residential properties purchased directly from a developer is 10% — a significantly reduced rate compared with the standard 21% rate applicable to most goods and services. This constitutes a built-in advantage for residential buyers acquiring new homes from developers.

Primary residence CGT reinvestment relief: Tax residents who sell their habitual residence and channel the entire net proceeds into a new principal home within two years qualify for a full CGT exemption on the gain. This is a valuable relief for those upsizing, downsizing, or relocating within Spain or the EU.

Renovation and restoration incentives: Various national and regional programmes offer grants or fiscal incentives for energy efficiency works and the restoration of historic or rural properties. The Spanish government has periodically launched schemes linked to EU funding for building renovation. Contact your autonomous community’s housing department (Consejería de Vivienda) for details of schemes currently in operation, as these programmes change frequently.

Beckham Law — special tax regime for new arrivals: The so-called “Beckham Law” (Régimen Especial para Trabajadores Desplazados, or RETD) permits qualifying individuals relocating to Spain for employment purposes to elect to be taxed as a non-resident for up to five years, at a flat rate of 24% on Spanish-source income up to €600,000. Although primarily an income tax mechanism, it shapes the overall tax planning environment for high-earning individuals buying property in Spain. The regime carries strict eligibility requirements and must be applied for promptly upon arrival in Spain; consult the Agencia Tributaria for current eligibility criteria.

Do different rules apply to foreign buyers or non-residents purchasing property in Spain?

Non-residents are generally free to purchase property in Spain on terms broadly similar to those available to residents, but there are meaningful additional compliance requirements and some differences in how particular taxes operate.

NIE number is mandatory: Any non-resident acquiring property in Spain must first obtain a Número de Identificación de Extranjero (NIE) — a tax identification number issued to foreign nationals. This is required before signing a purchase deed, opening a Spanish bank account, or settling taxes in Spain. The NIE can be obtained at a Spanish consulate in your country of residence or at a National Police station within Spain.

ITP rates are not affected by residency: ITP is determined by the region according to the nature of the property and the transaction, not by the buyer’s residency status. Non-residents generally pay the same ITP rate as residents for equivalent transactions. However, the preferential ITP rates accessible to specific buyer groups — such as young first-time buyers or large families — are ordinarily restricted to tax residents, so non-residents should budget for the full standard rate.

3% withholding obligation when buying from a non-resident: If you are purchasing from a seller who is not a Spanish tax resident, you as the buyer are legally required to withhold 3% of the sale price and remit it to the Spanish Tax Agency using Form 211 — effectively fulfilling a tax collection role on behalf of the state. This does not increase your purchase cost but is a legal obligation, and failure to comply carries penalties.

Ongoing non-resident tax obligations: Once a property is purchased in Spain, non-resident owners face a number of annual tax obligations, including IBI, non-resident income tax returns (Modelo 210), and potentially additional regional surcharges. Properties left vacant are subject to imputed income tax filed via Modelo 210 — an obligation that catches many non-resident owners off guard when they eventually receive a demand from the tax authorities.

Mortgage restrictions: Non-resident buyers typically encounter lower loan-to-value ratios from Spanish lenders than residents — commonly up to 60%–70% of the assessed value, compared with up to 80% for residents. This affects the amount of capital that must be brought to a purchase transaction.

Non-EU/EEA buyers — additional considerations: There are no outright legal bars on non-EU nationals buying property in Spain (with limited exceptions for certain protected rural and military-zone land). However, non-EU/EEA non-residents face a higher flat rental income tax rate (24% on gross income compared with 19% on net income for EU/EEA non-residents) and may be unable to access EU-specific CGT and inheritance tax treaty protections. Always consult the Agencia Tributaria and a specialist cross-border adviser.

How to apply for an NIE — step by step:

1. Complete Form EX-15 (application for NIE), available from the Spanish Ministry of the Interior’s website or your nearest Spanish consulate.
2. Gather supporting documents: valid passport, two passport-sized photographs, and evidence of the reason for needing the NIE (e.g. a preliminary purchase contract or reservation agreement).
3. Book an appointment at your nearest Spanish consulate (if applying from abroad) or at a National Police station (Comisaría de Policía) in Spain.
4. Attend the appointment, submit your application and documents, and pay the NIE application fee (a small government fee — verify the current amount with the consulate or police station).
5. Receive your NIE certificate. Processing times range from same-day to several weeks; apply well in advance of your intended completion date.
6. Use your NIE for all subsequent Spanish tax filings, bank account opening, and property registration.

Frequently asked questions about property taxes in Spain

Do I need a Spanish bank account to pay property taxes in Spain?

It is strongly advisable to open one. While certain taxes can technically be paid via SEPA transfer from an overseas account, having a Spanish bank account makes settling IBI by direct debit, submitting Modelo 210 payments, and handling utility and community fee obligations considerably more straightforward. Many Spanish banks offer dedicated non-resident accounts designed specifically for property owners.

Is IBI included in my community fees?

No. IBI is an entirely separate municipal tax billed directly by your local Ayuntamiento or its designated tax collection agency. Community fees (gastos de comunidad) are charged by the owners’ community to cover shared building expenses such as upkeep, insurance, and the building administrator’s remuneration. These are two wholly distinct obligations that must each be paid independently of the other.

Can I deduct mortgage interest from my Spanish tax return as a property owner?

Documented renovation costs and professional fees paid at acquisition form part of your acquisition cost and can reduce your taxable capital gain on disposal. For residents earning long-term rental income, mortgage interest on a buy-to-let property is generally deductible against that income. The historical deduction for mortgage interest on an owner-occupied primary residence was abolished for purchases made after 2013, though buyers who acquired their main home before that date may still be entitled to transitional relief. Confirm your specific position with a qualified Spanish tax adviser or the Agencia Tributaria.

What happens if I inherit a Spanish property but I cannot afford to pay the inheritance tax?

Spain permits heirs to request a deferral or instalment arrangement for inheritance tax under certain circumstances, subject to approval from the relevant regional tax authority. In some situations, heirs opt to sell the inherited property and apply the proceeds to settle the outstanding tax. It is important to take professional advice promptly, as the inheritance tax filing deadline — typically six months from the date of death — is strictly enforced, and late payment attracts surcharges and interest.

Will my home country also tax my Spanish property income or gains?

Possibly. Whether your country of residence taxes your Spanish rental income or capital gains depends on its own domestic legislation and any double taxation agreement it has concluded with Spain. Spain has treaties with numerous countries under which Spain generally holds primary taxing rights over income arising from Spanish real estate, with a credit mechanism in the taxpayer’s country of residence to prevent full double taxation. Individual circumstances vary considerably — consult a cross-border tax specialist with expertise in both Spanish law and the law of your country of residence.

Is the Plusvalía Municipal always payable when selling?

The Plusvalía Municipal is a local tax levied by the Ayuntamiento when a property changes hands, computed on the cadastral land value and the duration of ownership. Following a landmark 2021 ruling by Spain’s Constitutional Court, sellers who dispose of a property at a loss and can demonstrate that the land has not appreciated in value are entitled to challenge or avoid the Plusvalía. Always request a calculation from the local authority before completing any sale.

Does buying property in Spain give me the right to live there?

Not automatically. Property ownership alone does not confer any residency entitlement. Spain’s Golden Visa programme has historically granted a residency visa to non-EU nationals making a minimum real estate investment of €500,000. However, the Spanish government has announced its intention to review this scheme, so you should verify the current status with the relevant immigration authority or a specialist immigration lawyer before making any purchasing decision based on residency expectations.

Where can I find official, up-to-date information on Spanish property taxes?

The primary official resource for national tax matters in Spain is the Agencia Tributaria (Spanish Tax Agency). For regional tax rates covering ITP, AJD, and ISD, you should consult the tax authority of the relevant autonomous community directly. For cadastral values and IBI queries, the appropriate point of contact is your local Ayuntamiento. For property registration matters, the competent body is the Colegio de Registradores de la Propiedad. Official sources should always be supplemented by advice from a locally qualified tax professional — a gestor or asesor fiscal — who is well versed in the rules applicable to your specific region.