Property Tax in Spain — What Every Foreign Buyer Must Know
Buying property in Spain is an exciting opportunity for foreign investors. The sun, the lifestyle, and the growing property market make it attractive. But before you sign on the dotted line, you need to understand exactly what taxes you’ll face — both at purchase and ongoing. Surprises here can be expensive.
Taxes When You Buy
| Tax | Rate | Applies To |
|---|---|---|
| Transfer Tax (ITP) | 6–10% | Resale properties — rate varies by region |
| VAT (IVA) | 10% | New-build properties from developer |
| Stamp Duty (AJD) | 0.5–2% | New builds (in addition to VAT) |
| Notary & Registry | €1,000–€2,000 | All purchases |
Annual Property Taxes
IBI — Annual Property Tax
The IBI (Impuesto sobre Bienes Inmuebles) is the equivalent of council tax or property rates. It’s levied by the local municipality and based on the property’s cadastral value — which is typically lower than market value.
- Rate: 0.4–1.1% of cadastral value (varies by municipality)
- When paid: Once per year, usually autumn
- Typical amount: €200–€2,000 depending on location and property size
Rubbish Collection Tax (Basura)
A small annual charge for waste collection — typically €50–€200 per year.
Income Tax as a Non-Resident
Even if you don’t rent your property, you must file an annual non-resident income tax return (IRNR) declaring imputed income — a notional rental value that the Spanish tax authority assumes you could earn.
- Imputed income base: 1.1–2% of cadastral value
- Tax rate: 19% (EU/EEA residents) or 24% (non-EU residents)
- Form: Modelo 210, filed by December 31
Capital Gains Tax on Sale
When you eventually sell, the profit (sale price minus purchase price and eligible costs) is subject to capital gains tax:
| Gain Amount | CGT Rate |
|---|---|
| Up to €6,000 | 19% |
| €6,001 – €50,000 | 21% |
| €50,001 – €200,000 | 23% |
| Over €200,000 | 27% |
Plusvalía Municipal: On top of CGT, the selling municipality charges a tax on the increase in land value during your ownership. This is paid by the seller and varies significantly by location.
3% Withholding: If you’re a non-resident seller, the buyer is required to withhold 3% of the purchase price and pay it directly to the Spanish tax authority. This acts as a deposit against your capital gains tax liability.
Wealth Tax (Impuesto sobre el Patrimonio)
Spain has a wealth tax that applies to Spanish assets above €700,000 per person. Rates start at 0.2% and increase progressively. Some regions have their own exemptions — Madrid historically has had a full exemption, though this is subject to change.
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