If you’re buying property in Spain, understanding how the tax system works is essential for budgeting and avoiding costly surprises. This guide demystifies what you’ll pay, where the rules differ by region and how to get ahead of any hidden costs.
The Spanish property tax landscape can be confusing. Costs vary by region, change frequently and can differ significantly depending on whether you’re a resident or not. Getting to grips with it early on can save you thousands – and a major headache.
In this guide, you’ll find everything you need to know about Spanish property taxes in 2026, from what you’ll pay when buying your home to ongoing ownership costs and the tax due when you sell. We’ve also included a breakdown of regional tax rates and guidance on exemptions – all explained clearly and in plain English.
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Spain property taxes at a glance
| Tax | Who pays it | When | Typical rate |
|---|---|---|---|
| Property transfer tax (ITP) | Resale buyers | At completion | 7–11% (varies by region) |
| VAT (IVA) | New-build buyers | At completion or in stages | 10% (residential), 21% (land/commercial) |
| Stamp duty (AJD) | All buyers | At completion | 0.75–1.5% |
| Annual property tax (IBI) | All owners | June and November | 0.2–1.5% of cadastral value |
| Waste collection (Basura) | All owners | Annually | ~€50–€300 |
| Imputed income tax | Non-resident, non-letting owners | Annual declaration | 19% (EU/EEA) or 24% (non-EU) |
| Rental income tax | Owners letting the property | Quarterly | 19% (EU/EEA) or 24% (non-EU) |
| Capital gains tax (CGT) | Sellers | At completion | 19% (non-resident); 19–30% (resident) |
* Rates shown are current at the time of publication. Regional variations apply.
Contents
What taxes do you pay when buying property in Spain?
1. Property transfer tax (ITP)
The most significant cost when buying a second-hand property is the transfer tax – Impuesto de Transmisiones Patrimoniales (ITP). Rates vary between regions and are typically higher for more expensive properties. For instance, in Andalusia, you’ll pay a flat 7%, while in the Valencia region (including the Costa Blanca), the standard rate is now 9% for most resale properties (properties valued above €1,000,000 are taxed at 11%).
Unlike UK stamp duty, which is based on property price bands, Spanish ITP is often a flat rate or escalated in tiers depending on the value. You pay this once, when the property is officially registered in your name.
2. VAT (IVA) on new builds
If you’re buying directly from a developer or investing in a newly built home, you’ll pay value added tax (IVA) instead of ITP. This is currently set at 10% for residential property and 21% for plots of land or commercial premises. IVA must be paid from a Spanish bank account and is typically due in stages if you’re buying off-plan.
3. Stamp duty (AJD)
Known locally as Actos Jurídicos Documentados (AJD), stamp duty is charged on the notarial deeds. Again, this varies depending on the region:
- 1.2% in Andalusia and the Balearics
- 1.5% in Valencia
- 0.75% in the Canary Islands
You usually pay stamp duty alongside your notary fees, often within a few days of completing the sale. Your lawyer or notary will usually handle this automatically.
What ongoing taxes will you pay as a Spanish property owner?
1. Annual property tax (IBI)
The Impuesto sobre Bienes Inmuebles (IBI) is comparable to council tax in the UK or property tax in the US. It’s calculated based on the cadastral value of your property – usually lower than market value – and the rate is set by the local authority. Expect to pay between 0.2% and 1.5% annually.
The tax is typically due in two instalments, in June and November. Many town halls offer payment plans via a direct debit. Some also reduce rates for properties with solar panels or other environmental upgrades.
In Alicante and parts of the Costa Blanca, IBI is referred to as “SUMA”. Don’t let the terminology trip you up – it’s still the same tax.
2. Waste collection (Basura)
This is a local levy for rubbish collection and waste disposal. In most regions, it’s a modest fee – usually between €50 and €300 per year – but again, it depends on the local council.
3. Wealth tax
Spain’s Impuesto sobre el Patrimonio (wealth tax) applies to your net assets, not just your property. Spanish residents are taxed on worldwide assets; non-residents are taxed only on assets located in Spain.
Everyone benefits from a basic allowance of €700,000 and an additional €300,000 for your main home. Rates range from 0.2% to 2.5%, depending on the value of your net assets.
Some autonomous regions, including Madrid and Andalusia, currently apply 100% relief on regional wealth tax, meaning residents there effectively pay nothing. However, the central government’s “Solidarity Tax” on net assets above €3 million remains in force and can still apply to high-net-worth individuals.
4. Rental income tax
If you’re letting out your Spanish property, income tax applies. The rules are strict:
- Non-residents (non-EU): A flat 24% rate on rental profits. Following a July 2025 ruling by Spain’s Audiencia Nacional, non-EU landlords can now deduct legitimate expenses – such as mortgage interest, repairs, IBI and insurance – before tax is calculated. However, the 24% tax rate still applies, which is higher than the 19% rate available to EU/EEA residents.
- Non-residents (EU/EEA): 19% with deductions for eligible expenses such as maintenance, insurance and mortgage interest.
- Residents: Taxed at progressive income tax rates (up to around the mid-50s), with certain rental costs deductible against your profits. The exact rate depends on which region you live in.
You must declare this income annually, and failure to do so can result in fines or audits.
It’s worth noting that if you plan to let your home short-term (holiday or seasonal rentals), you now need a Rental Registration Number (NRA), even if you already have a tourist licence. Since 1 July 2025, properties without a valid NRA cannot legally be advertised on platforms such as Airbnb or Booking.com and non-compliant listings are being removed.
If you rented out your property during 2025, you must submit an annual informative declaration between 1 February and 2 March 2026 detailing all guest stays from the previous calendar year. Failure to file this return can result in your NRA being revoked and your listing being suspended. Your lawyer or tax adviser can help you register and report correctly.
5. Imputed income tax
Spain assumes that non-resident owners of second homes could be renting them out. Even if your property sits empty all year, you’ll still owe a notional tax on its theoretical rental value. The calculation is straightforward: 1.1% of the cadastral value (or 2% if the cadastral value hasn’t been revised since 1994), taxed at 19% for EU/EEA owners or 24% for non-EU owners, including Brits post-Brexit.
You declare and pay this annually using Modelo 210, filed retrospectively for the previous tax year. For 2025 income, you have until 31 December 2026 to file. It’s easy to miss if no one is chasing you, but penalties apply. A Spanish tax adviser or gestor can handle the filing for a modest annual fee.
Non-resident tax calendar
| Tax or obligation | When it falls due | Form |
|---|---|---|
| IBI (annual property tax) | June and November | Issued by local authority |
| Basura (waste collection) | Varies by municipality | Issued by local authority |
| Imputed income tax (vacant property) | 1 January to 31 December of the following year | Modelo 210 |
| Rental income tax (Q1 income) | 20 April | Modelo 210 |
| Rental income tax (Q2 income) | 20 July | Modelo 210 |
| Rental income tax (Q3 income) | 20 October | Modelo 210 |
| Rental income tax (Q4 income) | 20 January (following year) | Modelo 210 |
| Annual rental declaration (NRA) | 1 February to 2 March | Modelo 179 |
What taxes do you pay when selling property in Spain?
1. Capital gains tax (CGT)
If you sell your Spanish property for more than you paid, you’ll owe capital gains tax (Impuesto sobre la Ganancia Patrimonial). The amount depends on your residency status and the size of your gain:
- Non-residents: 19%
- Residents:
- 19% for gains up to €6,000
- 21% from €6,000 to €50,000
- 23% from €50,000 to €200,000
- 27% from €200,000 to €300,000
- 30% over €300,000
There’s also a 3% retention tax on non-resident sellers. This is withheld by the buyer and paid to the Spanish tax office to cover your CGT liability. If your gain is lower, you can claim a refund.
2. Exemptions and reductions
There are a few reliefs available:
- If you’re over 65 and have lived in the home for at least three years as your main residence, CGT does not apply.
- Residents who reinvest the proceeds into a new main home within two years can claim the “main home exemption.”
Your lawyer or accountant can help you calculate and apply for these exemptions.
What does all this mean in practice?
The numbers above can feel abstract until you apply them to a real purchase. Here are three scenarios that reflect common buyer profiles. All figures are approximate and based on current rates – your actual liability will depend on exact cadastral values, regional rules and individual circumstances.
Scenario 1: Resale apartment on the Costa Blanca, €250,000 (£209,000)
The Valencia region applies a standard ITP rate of 9% on resale properties, rising to 11% above €1m. On a €250,000 purchase, that’s €22,500 in transfer tax, plus AJD at 1.5% (€3,750). Budget for roughly €26,250 in purchase taxes alone – on top of notary, legal and registration fees, which typically add another 1–2%.
Scenario 2: New-build villa in Andalusia, €400,000 (£335,000)
New builds attract IVA at 10% rather than ITP, so you’d owe €40,000 in VAT plus AJD at 1.2% (€4,800) – around €44,800 in purchase taxes. Andalusia’s AJD rate is among the lower regional rates, which partly offsets the IVA bill. Bear in mind that IVA on new builds is typically paid in staged instalments as construction progresses.
Scenario 3: UK buyer owning a €280,000 (£234,000) apartment in Málaga – not renting
Once you own, the annual costs stack up differently. IBI will depend on the cadastral value – often well below market value, but let’s say €75,000 in this case. At a typical rate of 0.6%, that’s €450 a year. Basura adds around €120. Imputed income tax, as a non-EU owner, is calculated on 1.1% of that cadastral value (€825), taxed at 24% – roughly €198 per year. Total annual tax bill: around €768, plus any community fees and utility standing charges.
These examples illustrate why it’s worth running the numbers for your specific property and region before you commit, and why a local tax adviser pays for themselves quickly.
Why professional advice matters
Spain’s tax system isn’t just layered – it’s also subject to frequent change. For example, in January 2025, Prime Minister Pedro Sánchez proposed a controversial 100% property surcharge for non-EU buyers. While the proposal is unlikely to pass, it highlights how quickly fiscal policies can shift.
On top of that, the European Commission has opened formal proceedings against Spain over aspects of the tax system for non-resident property owners. Nothing changes for now, but rules on things like imputed income may evolve over the next few years. All the more reason to rely on a local specialist who keeps up with the latest developments.
To navigate this landscape with confidence, always seek advice from a registered tax advisor or lawyer based in Spain. UK or US-based accountants may not be authorised to file on your behalf – and may not understand regional nuances that could save you money.
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Summary
Understanding Spanish property tax isn’t just about ticking legal boxes – it’s about protecting your investment and planning for the future. With the right support and a bit of forward thinking, you’ll be well prepared to enjoy your home in the sun with peace of mind.
FAQs about property tax in Spain
As a homeowner in Spain, you’ll usually pay three ongoing taxes: annual property tax (IBI), waste collection (Basura) and, if you’re a non-resident, imputed income tax on second homes. If you rent out the property, rental income tax also applies. Depending on your wealth and location, wealth tax may apply too.
The amount varies by region and by property. Most owners pay IBI at roughly 0.2%–1.5% of the cadastral value, plus a yearly waste collection fee that ranges from about €50 to €300. Non-residents also owe imputed income tax, which is calculated using 1.1%–2% of the cadastral value, taxed at 19% for EU owners and 24% for non-EU owners.
A July 2025 ruling by Spain’s Audiencia Nacional confirmed that non-EU owners, including Brits, can now deduct legitimate rental expenses – such as mortgage interest, repairs, IBI and insurance – before tax is calculated. The 24% rate still applies, however, so it’s worth getting up-to-date local advice on how this affects your liability.
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