All property owners in Spain are obligated to fulfill annual tax obligations consisting of three distinct categories.
Residents are accountable for the payment of Income Tax (including Capital Gains Tax) and Real Estate Tax (IBI).
For non-residents in Spain, the tax responsibilities encompass Non-Resident Income Tax (including Capital Gains Tax) and Property Tax (IBI), plus wealth tax if their Spanish assets are above the tax-free allowance.
In this comprehensive article, we will provide a thorough examination of the array of property taxes that you must be aware of and comply with when purchasing a property in Spain.
Non resident Tax on Property Purchases
If you are a non-resident, you are the taxes on property are 3:
- Income Tax (including Capital Gains Tax). If you live and work abroad, non-resident income tax on your Spanish property covers the rent, or imputed income if you do not let it out. Other income from Spain, such as work you do here, is taxed in Spain too unless your tax treaty says otherwise (Non-Resident Income Tax Law, articles 4 and 13). If the property is for your own use, you must pay a certain percentage of your property; if you rent the property, you must declare the amount you receive as rent.
- Annual Real Estate Tax: Read more below.
- Wealth tax, only if your Spanish assets are above the tax-free allowance.
In order to pay these taxes, you must apply for a NIE (Número de Identificación de Extranjero), which is your Spanish tax identification number. Non-Spanish residents of all nationalities also have a number. You should request this number when buying your property. This number identifies you with the Spanish authorities and is necessary when taxes are paid or you have to resolve an issue with the Inland Revenue.
Annual real estate tax in spain
This property tax is based on the cadastral value and for the same type of property can vary greatly from one city to another, as it is a municipal tax. This real estate tax is called the IBI, “Impuesto sobre Bienes Inmuebles”. The amount can change from one year to the next if the cadastral value is updated or the town hall changes its rate.
For a non-resident, the best solution is to pay the tax by direct debit. The bank will provide you with a form authorising the bank to pay the tax and a copy of the form will be deposited with the local council. This will ensure that taxes are paid at the right time, just like other utility bills owned by you. In addition to the appraised value of your property (cadastral value), the IBI also takes into account your reference cadastral number, which identifies your property at the cadastral office. This can be important in the purchase and sale of properties, because sometimes the physical description does not agree with the description on the title deed. These three taxes cannot be avoided, as the Spanish Tax Agency (Hacienda) will audit the accounts at the time of the sale of the property. When a non-resident sells, the buyer must withhold 3% of the price and pay it to the tax office on account of the seller’s capital gains tax. At the time of signing the sales contract, you will also be asked to present the current real estate tax receipt, the IBI.
wealth tax
The wealth tax is a direct and personal tax that is applied individually, not on annual income or transactions, but on the personal wealth of persons, and is calculated based on the value of all the assets of the taxable person. Wealth tax only applies when your net assets are above the tax-free allowance, €700,000 in most regions. For non-residents, only assets located in Spain count.
Spanish income tax
Spanish Income Tax does not apply to the principal residence of a resident owner. However, it does apply to a second residence. In the case of a non-resident, as this property is not considered a principal residence, the tax must be paid on an annual basis. The imputed income is 2% of the cadastral value of the property, as fictitious rental income. It drops to 1.1% if the cadastral value was revised in the current year or the previous ten years. For residents, this imputed income is added to the rest of their income. It is taxed on the progressive general scale, which starts at around 19% and varies by region. A non-resident pays a flat 24% on income arising in Spain, or 19% if they live in another EU or EEA country. This 24% income tax should not be confused with the 19% capital gains tax on profits from the sale of assets, such as a house or shares in a company.
buying a house in spain: taxes and expense planning
When buying a property in Spain, taxes play a big role in the planning process. If we take into account the valuation of the house, the notary, the registry and the corresponding taxes (VAT, ITP…), the experts recommend having savings between 10% and 12% of the price of the house. All of them are obligatory expenses that revolve around the purchase and sale of a property, although the ‘invoice’ to be paid will depend on whether it is a new or used house and the amount of the same.
If you later give the property to your children while you are alive, it is not treated as an inheritance. The main tax is gift tax, paid by whoever receives the home under the rules of the region where it sits, and you may also owe tax on any gain in value since you bought it. Our guide to gift tax in Spain has the regional discounts for 2026.
TAXES TO RENT A PROPERTY IN SPAIN
Whether you are resident or non-resident of Spain, renting your property is legal. However, you must remember that you must report your rental income to the tax authorities. Non-residents declare it on form 210, and residents include it in their annual income tax return. Rental platforms report their hosts’ income to the Spanish tax authorities, so undeclared lets are easy to spot. Spanish Income Tax takes into account the benefits arising in Spain.
If you are a non-resident, you pay 24% on rental income, or 19% if you are resident in the EU, Iceland or Norway. EU, Iceland and Norway residents can deduct expenses; other non-residents cannot, and none can apply the reduction that resident owners get on long-term lets of a home (50% for most contracts signed between 26 May 2023 and 1 December 2026 and 60% for older ones, under article 23.2 and the thirty-eighth transitional provision of the Income Tax Law; Royal Decree-law 29/2026, still awaiting parliamentary approval, sets a new scale for contracts signed from 2 December 2026). If you are a resident, you must include your rental income with your other income when making your annual Spanish tax return. For deducting expenses, long-term and holiday lets follow the same rules: what decides it is where you live, not the type of licence. The resident rent reduction, though, only applies to long-term lets of a home, not to holiday or temporary lets.
If you let a flat in Spain, tell us about your contract and one of our tax lawyers will confirm which reduction it gets.
Frequently Asked Questions About Property Tax in Spain
Does Spain have property tax?
Yes. Every property owner pays an annual property tax, the IBI (Impuesto sobre Bienes Inmuebles). Each town hall sets its rate.
How much is non resident property tax in Spain?
The IBI rate is usually between 0.4% and 1.10% of the property’s cadastral value, and a little higher in some large towns. It depends on the town hall. On your annual property tax (Impuesto sobre Bienes Inmuebles- IBI)
payment, you will find the most up-to – date cadastral value.
How much time do I have to pay the property taxes in Spain?
Property tax (IBI) is paid by whoever owns the property on 1 January, once a year, and many town halls let you split it into instalments. The annual tax rate is 0.4 percent to 1.1 percent of the property’s cadastral valuation. This tax will be domiciled in Spain on your current account. Example: a flat with a cadastral value of €150,000 pays between €600 and €1,650 a year at rates of 0.4% to 1.1%. The cadastral value is usually well below the market price.
Youre not going to believe this but I have lost all day hunting for some articles about this. I wish I knew of this site earlier, it was a good read and really helped me out. Have a good one
Thanks!
hmmm….even the LOWEST IBI rate (0.4%) on 350k = 1,400.E….. (and 1.0% is obviously 3,500E)…maybe time for a new accountant? If I owned a 350k flat, I’d plan on an IBI of roughly 3K/yr., assuming 1% and a cadastral of about 325k.
I know its based on cadastral, not market value, so thats helpful, but still….600 is 0.17%…well below the low-end of your range.
I’m new to Spanish tax rules, so don’t claim to understand it entirely. (but reasonably good with my 0.4 and 1.0 times table).
Hi Peter,
one of our lawyers should be in contact with you shortly for your questions
Greetings
Peter, you were right about the example. IBI is a percentage of the cadastral value, not the price you paid, so a flat with a cadastral value of €150,000 pays roughly €600 to €1,650 a year. We have corrected the example in the article.
I am a US resident over 21 and have just inherited a house in Catalonia. The tax implications seem a bit confusing as there appears to be an inheritance tax on the heir, which is quite different as well as possible capital gain upon sale which appears to be based strictly on FMV without any consideration for basis. I am not even sure how I could prove any basis on it. How would I determine what the capital gains rate would be in Catalonia and Would I have to pay this before I sold the house. It makes no sense to come up with such a large amount of tax prior to selling it? Seems a bit backward…
Hi Richard,
one of our lawyers should be in contact with you shortly for your questions about taxes in Spain
Greetings
I am being told that the Tax laws changed when the UK left the EU. We now cannot claim any costs against our rental income, so we can only declare and pay tax on the Gross income. Has this always been the case for Non-EU, Non-Resident house owners?
Hi Chris,
one of our lawyers should be in contact with you shortly for your questions about taxes in Spain
Greetings
Yes, it has.
You are simply non-EU now, you pay 24% (instead of 19%) and no deductions.
Greetings,
I would like to explin my personal circumstances to one of your lawyers to get a full appreciation of the tax impliation about retiring in Spain.
Hi Krzysztof,
one of our lawyers should be in contact with you shortly for your questions about taxes in Spain
Greetings
The ranges given for non-resident property tax and regular property tax (IBI) are the same. I am a EU citizen not living permanently in Spain. Does that mean I will have to pay both – IBI as well as non-resident property tax?
Hi Gina,
one of our lawyers should be in contact with you shortly for your questions about taxes
Greetings
Gina, an update for you and other readers: there is no separate property tax for non-residents. You pay IBI to the town hall like any owner, plus non-resident income tax on the property (on the rent, or on imputed income if you do not let it out). Wealth tax only comes in above the tax-free allowance.
So a question, if i retire in Alacante and live there only 5 months out of the year, how much would i pay in taxes if my house was 300,000 euros. Also, how much would i pay in taxes when closing on the house of 300,000 euros?
Hi Brett,
one of our lawyers should be in contact with you shortly for your questions.
Greetings
My late father owned a property in Malaga, he died Feb 2019, left Spain inMay 2018 for the UK, to be with family at end of life, with cancer. He moved permanently to Spain in Jan 2016. Previous to that, he spent a lot of time out there, but not full time. My understanding is that the in Spain tax collectors can only go back 5 years. Would you be able to estimate how much tax may be liable from his estate, from the information given. Also I understand that succession tax has a huge allowance of 95% off the value, if children inherit, but that is a personal liability of the beneficiaries, not a liability of the estate, could you please give some basic advice about that please. His property was worth approx 200,000.
Hi Louise,
one of our lawyers should be in contact with you shortly for your questions.
Greetings
Hi-
On a house with a value of $420,000, approximately how much would a non-resident pay in the various annual taxes?
Best, Will
Hi Win,
one of our lawyers should be in contact with you shortly for your questions about property tax .
Greetings
Having sold a larger 4 bed villa €450000, 10 years ago and buying a small 2 bed apartment outright which was €25000 . I have kept all monies in Spanish Bank since and am now ready to sell . I’m resident in UK and have never rented as my Family have used homes for the last 50 years . What taxes will I pay on sale please
Hi Patrick,
one of our lawyers should be in contact with you shortly for your questions about property tax in Spain.
Kind regards
I am an Italian citizen, living in Singapore. I am thinking to buy a property in my son name, who is in university student in Madrid.
Are there taxes implication if I buy the property in his name? For example, should I pay a gift tax? Will he be able to save on ITP, given this is the house where he will live?
Thanks
Hi Fabio,
one of our lawyers should be in contact with you questions about property tax in Spain.
Kind regards
I am an Italian/EU citizen who is contemplating moving to Spain. I will be living in a rented, furnished apartment. What taxes will I have to pay?
Anthony,
It all depends on your income…
Kind Regards,
Can you please explain the tax implications if I am resident in Spain and don’t own a property here but own a property in South Africa. How will the tax on the South African property be calculated in Spain and how do I need to declare this? I’m currently not receiving a rental income from the property.
Many thanks
Hi Marianne,
one of our lawyers should be in contact with you questions.
Kind regards
I have a question. I have a joint (50%) commercial property that we rented in 2020 and my income from the rent was
3000 eur. I am renting as a physical person, nonresident.
The renter pays the taxes, however I have to submit the taxation form.
More or less, everything in the form is clear, but in the section “Settlement”, I was wondering – do I enter the amount the renter pays
in the “Withholdings/payments on account”? Because if I do that, my debt ends up being 0 eur, which is the case, but if I don’t fill up
that part of the form (Withholdings/payments on account), the form calculates as I am the one who needs to pay the taxes, which is
not the case.
Hi Zoran,
one of our lawyers should be in contact with you questions.
Kind regards
I need help, could one of our lawyers contact me?
Christine,
One of our lawyers will explain the whole process to you.
Regards,
HI there, I woud like some advice on property tax in spain-Australia. I own a property in Australia and intend to9 move to Spain and purchase a property there, live there while I rent in Australia. What are the ta implications for me?
Thanks, some advice please!
Helen
Helen,
one of our lawyers should be in contact with your questions about the Property tax in Spain.
Regards,
Hello , i am thinking of retiring and moving to Spain , I am looking at buying an apartment on a secure complex, the cost is between 70 and 80,000 , I live in a eu country at the moment , how much tax would I pay a year and what are the monthly costs , thanks ian ,
Ian,
one of our lawyers should be in contact with your questions about property tax in Spain
Regards,
Hi,
I own a few properties in the Alicamte province of Spain and would appreciate some advice specific to my situation, could you please contact me to discuss this?
This site is clear, concise with no jargon. I am delighted to find it. Not sure I know how to save it so I can revisit. I enjoyed browsing and learned a lot. It is helpful to understand these complexities in lay man’s language:)
Whatever you need, our law firm will be able to help you.
My husband and I are hoping to move to Spain in 2027. We have not yet decided upon which region. My husband is French EU national, and I am UK non EU national but am in the process of applying for a French passport through marriage to then also have EU citizenship. We are looking to purchase a house circa Euros 220,000. We will be retirees living off a pension of £30,000 (GBP) combined income. What taxes will we have to pay.
It’s great to hear that you’re planning a move to Spain in 2027. The process of relocating and purchasing a property involves several legal and tax considerations, which can vary depending on your specific situation.
To provide you with accurate guidance tailored to your case, we recommend a personalized consultation. This will allow us to assess your circumstances and explain the legal and tax implications of your move.
Feel free to contact us, and we’ll be happy to assist you!