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.
What taxes will you pay on a property in Spain? You’ll pay different taxes when buying, owning and selling. Resale buyers generally pay property transfer tax (ITP), while new-build buyers usually pay 10% VAT plus regional stamp duty (AJD). Once you own, you’ll normally pay annual property tax (IBI) and possibly waste collection charges. Non-residents may also owe tax on rental income or the property’s notional rental value. When you sell, capital gains tax may apply.
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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) | Generally buyers of new-build properties | Following completion | Varies by region |
| Annual property tax (IBI) | Property owners | Varies by municipality | Based on cadastral value and local tax rate |
| 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 | Annually | 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
- Spain property taxes at a glance
- What taxes do you pay when buying property in Spain?
- What ongoing taxes will you pay as a Spanish property owner?
- What taxes do you pay when selling property in Spain?
- What does all this mean in practice?
- Why professional advice matters
- Summary
- FAQs about property tax in Spain
What taxes do you pay when buying property in Spain?
1. Property transfer tax (ITP)
The most significant tax when buying a second-hand property is the property transfer tax – Impuesto sobre Transmisiones Patrimoniales (ITP). Rates vary between regions, and some apply higher rates to more expensive properties. For example, Andalusia has a standard rate of 7%, while the Valencia region (including the Costa Blanca) has its own rates and thresholds. Check the current regional rules with your lawyer before calculating your purchase costs.
Unlike UK stamp duty, which is based on property price bands, Spanish ITP may be charged at a flat rate or in tiers depending on the region and property value. It’s a one-off tax paid after completion, generally within the deadline set by the autonomous community.
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. The Canary Islands are the exception – new builds there attract IGIC, the Canarian equivalent, at 7%. You pay IVA to the developer rather than to the tax office, and it’s typically due in stages if you’re buying off-plan.
3. Stamp duty (AJD)
Stamp duty, known as Actos Jurídicos Documentados (AJD), generally applies to new-build purchases subject to VAT. The rate varies by autonomous community. Ordinary resale purchases subject to ITP don’t normally attract this additional variable AJD charge.
The amount depends on where you’re buying, with regional rates and possible reductions for certain buyers or properties. Ask your lawyer to confirm the applicable rate before completion, particularly if you’re purchasing a new build.
AJD is generally paid after completion, within the deadline set by the autonomous community. Your lawyer can confirm how much is due and arrange payment on your behalf.
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.
Payment dates vary by municipality, and many town halls allow you to pay by direct debit or spread the cost through instalments. Some also offer discounts for properties with solar panels or other qualifying energy improvements.
In Alicante and parts of the Costa Blanca, IBI is often collected by an agency called SUMA. You’ll hear locals refer to their ‘SUMA bill’ but it’s still the same property 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.
Spain’s wealth tax generally includes a tax-free allowance of €700,000, although some autonomous communities offer higher allowances or additional relief. Qualifying main residences may also benefit from an exemption of up to €300,000. Rates and exemptions depend on your circumstances and the regional rules that apply, so it’s worth seeking specialist advice if you own substantial assets.
Some autonomous regions, including Madrid and Andalusia, currently apply 100% relief on regional wealth tax, meaning most residents there pay nothing. However, the central government’s “Solidarity Tax” on net assets above €3 million remains in force and has now been extended indefinitely, having started life as a temporary measure. It can still apply to high-net-worth individuals wherever they own.
4. Rental income tax
If you’re letting out your Spanish property, income tax applies. The rules are strict:
- Non-residents (non-EU): Rental income is generally taxed at 24% of gross income, without deductions for expenses. However, a July 2025 ruling by Spain’s Audiencia Nacional challenged the different treatment of non-EU landlords, finding that they should be able to deduct qualifying expenses on the same terms as EU and EEA residents. The decision has been appealed, so the position remains uncertain. If you’re a British landlord, seek specialist tax advice before claiming deductions or calculating your liability.
- 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.
If you plan to let your home short-term, you’ll need to check the latest registration and licensing requirements. Spain introduced a national rental registration system in July 2025, requiring properties advertised through online platforms to obtain a registration number. However, a Supreme Court judgment in May 2026 annulled provisions establishing the national registration procedure, changing the legal position for landlords.
Regional and local rules remain important, including tourist accommodation licences, planning restrictions and guest-reporting requirements. These vary depending on where your property is located. Before advertising your home, check the latest requirements with your regional tourism authority or a local legal adviser, rather than assuming that one registration covers everything.
5. Imputed income tax
Spain charges non-resident owners tax on the notional rental value of properties they keep for personal use, even if they don’t rent them out. This is generally calculated using 2% of the property’s cadastral value, reduced to 1.1% where the cadastral value meets the qualifying revaluation rules. The resulting amount is taxed at 19% for qualifying EU/EEA residents or 24% for other non-residents, including most British owners.
You declare and pay this tax annually using Modelo 210, covering the previous tax year. For 2025, the filing deadline is 31 December 2026. For the 2026 tax year, the filing window runs from 1 April to 31 December 2027. Missing the deadline can lead to penalties, so it’s worth setting a reminder or asking a Spanish tax adviser or gestor to handle the declaration for you.
Non-resident tax calendar
| Tax or obligation | When it falls due | Form |
|---|---|---|
| IBI (annual property tax) | Varies by municipality | Issued by local authority |
| Basura (waste collection) | Varies by municipality | Issued by local authority |
| Imputed income tax (vacant property) | For 2025: by 31 December 2026. For 2026: 1 April–31 December 2027 | Modelo 210 |
| Rental income tax (2025 income, annual grouped declaration) | 1–20 January 2026 | Modelo 210 |
| Rental income tax (2026 income onwards, annual grouped declaration) | 1–20 April of the following year | Modelo 210 |
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
“I always advise the client that they have to be careful with capital gains tax – if they’ve got a property in the UK, it’s better they sell it before becoming resident rather than after.”
– Raquel Perez, founder and managing director of Perez Legal Group
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 aged 65 or over, you may be exempt from capital gains tax when selling your qualifying main home in Spain, provided you meet the habitual residence requirements.
- Spanish tax residents who sell their main home and reinvest the proceeds in another qualifying main residence may be eligible for full or partial relief, subject to specific conditions and deadlines.
Your lawyer or tax adviser can help you check your eligibility and apply for any available 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)
On a €250,000 resale apartment in the Valencia region, a 9% ITP rate would mean €22,500 in transfer tax. Unlike a new-build purchase, you wouldn’t normally pay the additional variable AJD charge. You’ll still need to budget for notary, legal and registration fees, which can add another 1–2% to your costs.
Scenario 2: New-build villa in Andalusia, €400,000 (£335,000)
New-build homes generally attract IVA at 10% rather than ITP, so on a €400,000 purchase you’d pay €40,000 in VAT. You’ll also need to pay stamp duty (AJD), with the amount depending on the applicable regional rate. If you’re buying off-plan, VAT is usually charged on payments made during construction, with the balance due at completion. Ask your lawyer to confirm the full tax bill before committing to the purchase.
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 depends on the cadastral value – often well below market value. Let’s assume it’s €75,000, with a local IBI rate of 0.6%. That would mean €450 a year in property tax, plus around €120 for waste collection. As a British non-resident, you’d also pay imputed income tax. If the property qualifies for the 1.1% calculation, that would be approximately €198 per year. Your total annual tax bill would therefore be around €768, excluding 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. In January 2025, Prime Minister Pedro Sánchez proposed a controversial 100% property surcharge for non-EU buyers. A draft bill reached parliament on 22 May 2025 and, more than a year on, still hasn’t been debated once. The government’s own January 2026 housing package left it out. It isn’t law, and there’s nothing extra to pay today – but it shows how quickly the political mood can shift.
The European Commission has also stepped up its case against Spain. In April 2026 it issued a reasoned opinion over imputed income tax charged to non-residents on homes they use as their main residence, giving Spain two months to act or face the EU Court of Justice. In June 2026 it widened a separate case over non-residents being denied the rental income reduction that residents can claim. Nothing changes for now, but these rules could look different within a few years. All the more reason to rely on a local specialist who keeps up with the latest developments.
To understand exactly what you’ll owe, speak to a qualified tax adviser or lawyer familiar with Spanish property transactions. They can explain the regional rules, check which exemptions apply and help you meet your filing deadlines. If you also pay tax in the UK or another country, it’s worth finding someone who understands cross-border taxation.
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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.
Property taxes in Spain depend on where you buy, your property’s cadastral value and your residency status. Most owners pay annual property tax (IBI), plus any applicable waste collection charges. Non-residents who keep a property for personal use may also owe imputed income tax, calculated using 1.1% or 2% of the cadastral value and taxed at 19% or 24%, depending on their tax residency.
British owners who are non-resident in Spain generally pay 24% tax on rental income or the notional rental value of a property kept for personal use. A July 2025 court ruling challenged the rules preventing non-EU landlords from deducting rental expenses, but the legal position remains uncertain. If you rent out your Spanish property, seek advice from a qualified tax specialist before calculating your liability.
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