Legal & Tax · 9 min read
Spanish Property Taxes Explained: What Owners Need to Know
10 March 2026 · Hansson & Hertzell
A clear breakdown of the taxes you'll pay when buying, owning, and selling property in Spain — IBI, income tax, plusvalía, and more.
One of the most common surprises for foreign buyers in Spain is the total cost of acquisition. The advertised price is just the starting point — on top of it, you'll pay a stack of taxes and fees that typically add 10–14% to the total cost of your purchase. Understanding what these are, when they apply, and how to plan for them can save you thousands and prevent unpleasant surprises on completion day.
This guide covers every tax and cost you'll encounter when buying property in Spain in 2026, whether you're purchasing resale or new-build, and what you'll continue to pay annually as a property owner.
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Taxes When Buying: The Big Picture
There are two entirely different tax regimes depending on whether you're buying a new-build from a developer or a resale property from a private seller. Mixing these up is one of the most common mistakes buyers make when budgeting.
Buying New-Build: IVA + AJD
When purchasing directly from a developer (first-hand sale), you pay:
IVA (VAT): 10% of the purchase price for residential properties. On a €250,000 apartment, that's €25,000 in IVA alone. There is no negotiation on IVA — it is a national tax set by central government.
AJD (Stamp Duty — Actos Jurídicos Documentados): This is levied on the signed deeds and varies by region. In the Valencian Community (which covers the entire Costa Blanca), AJD is 1.5% of the purchase price for properties valued above €400,000, and 1.0% for properties below €400,000 — a Valencian Government reduction introduced in 2023.
Total tax cost for new-build:
- Property under €400,000: IVA 10% + AJD 1.0% = 11%
- Property over €400,000: IVA 10% + AJD 1.5% = 11.5%
Buying Resale: ITP
For resale properties (second-hand, private sale), IVA does not apply. Instead, you pay:
ITP (Impuesto de Transmisiones Patrimoniales): Transfer tax levied at the regional level. In the Valencian Community, ITP is applied on a progressive scale:
| Purchase Price | ITP Rate | |---------------|----------| | Up to €400,000 | 10% | | €400,001 – €1,000,000 | 11% | | Above €1,000,000 | 12% |
Reduced ITP rates apply for: young buyers under 35 purchasing a primary residence (8%), disabled persons with 33%+ recognised disability (8%), and families with 3+ dependent children buying a primary residence (8%).
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Notary, Registry, and Legal Fees
Beyond the main transaction tax, budget for:
Notary fees: Regulated by Spanish law and based on the purchase price. Typically €800–€1,500 for a standard residential purchase. The notary is a public official who reads and witnesses the deed signing — they are not your lawyer and do not represent your interests.
Land Registry fees: Registering the deed at the Property Registry costs approximately €400–€800 depending on purchase price. This step legally perfects your ownership title.
Property lawyer: Not legally required in Spain, but strongly recommended for all foreign buyers. Your lawyer conducts title searches, reviews purchase contracts, checks for charges or debts on the property, reviews community accounts and minutes, and represents you at completion. Typical fee: 1% of purchase price + IVA, minimum €1,500.
Gestor fees: A gestor (administrative professional) coordinates deed signing, tax filings, and registry registration after completion. €300–€600.
NIE application: If you don't have a Spanish tax identification number yet, budget €10–€15 in official fees plus €150–€300 if using a gestor to assist with the application. You cannot complete a property purchase without a NIE.
Mortgage costs (if applicable): Mortgage valuation (tasación) €300–€600. Bank arrangement fee 0–1% of loan. Life insurance if required by lender. AJD on the mortgage deed is paid by the bank since the 2019 law change.
Total acquisition cost summary:
| Cost Category | New-Build | Resale | |--------------|-----------|--------| | Transfer tax / VAT | 10–11.5% | 8–12% | | Notary | €800–€1,500 | €800–€1,500 | | Land Registry | €400–€800 | €400–€800 | | Lawyer | ~1% + IVA | ~1% + IVA | | Gestor | €300–€600 | €300–€600 | | Total beyond purchase price | ~12–14% | ~11–14% |
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Annual Property Taxes in Spain
Once you own property, several recurring taxes apply every year.
IBI — Impuesto sobre Bienes Inmuebles
The Spanish equivalent of council tax — an annual local tax based on the valor catastral (cadastral value) of your property. The cadastral value is set by the central government and is typically well below market value, often 30–50% of it.
Tax rates are set by each municipality, typically 0.4–1.1% of cadastral value.
Example: A property with market value €200,000 might have cadastral value of €70,000. At 0.6% municipal rate, annual IBI = €420. IBI is billed annually by the Town Hall, usually September–November. Set it up as a direct debit on your Spanish bank account.
Basura (Garbage Collection Tax)
A modest municipal charge of €80–€200/year depending on the municipality and property size. Often billed alongside IBI.
Community Fees (Cuota de Comunidad)
If your property is within a community of owners — apartment building or urbanisation — you'll pay monthly community fees covering shared areas, pool, gardens, lifts, and communal utilities. These range from €50/month for a simple complex to €300+/month for luxury gated developments. Always review the community's annual accounts before purchasing.
Non-Resident Income Tax (IRNR) — Imputed Income
This is the most commonly missed obligation. If you own property in Spain but are not tax resident in Spain, you must file an annual income tax declaration even if you earn zero rental income.
Spain imputes notional income based on personal use of the property:
- 1.1% of cadastral value (properties with cadastral values updated since 1994)
- 2.0% of cadastral value (older cadastral values)
Tax on this imputed income:
- EU/EEA residents: 19%
- Non-EU residents (UK, US, etc.): 24%
Example: EU buyer, property with cadastral value €60,000. Imputed income: €60,000 × 1.1% = €660. Tax: 19% × €660 = €125/year.
This is declared via Modelo 210, due by 31 December each year for the prior year. Missed filings incur automatic fines and interest that compound silently. Many non-resident owners discover years of unpaid IRNR when they try to sell — the debt must be cleared before the sale can complete.
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Rental Income Tax
If you rent your property:
EU/EEA residents: Deduct allowable expenses (mortgage interest, management fees, maintenance, depreciation, IBI, insurance, community fees). Pay 19% on net income. Quarterly Modelo 210 declarations.
Non-EU residents (UK post-Brexit, US, etc.): Pay 24% on gross rental income with no expense deductions. This is a significant structural disadvantage that materially affects net yield calculations for non-EU investors.
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Capital Gains Tax on Sale
Capital gain = sale price − original purchase price − allowable costs (purchase taxes paid at acquisition, legal fees, verifiable improvement costs, estate agent selling commission).
Tax rates on gains:
- EU/EEA residents: 19%
- Non-EU residents: 24%
Withholding tax: When a non-resident sells, the buyer must withhold 3% of the total sale price and pay it directly to Hacienda. This is an advance payment against the capital gains tax liability. File Modelo 210 within 4 months of sale to either pay any remaining tax or claim a refund if 3% exceeds the actual liability.
Plusvalía Municipal: A separate local tax on the increase in the cadastral land value during your ownership period. Paid by the seller. The calculation was reformed in 2021 to be proportional to actual gains — for properties with modest land value appreciation, it is typically modest; for prime coastal properties held 15+ years, it can be significant.
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Wealth Tax
Spain's annual wealth tax (Impuesto de Patrimonio) applies to Spanish-located assets for non-residents. Tax-free allowance for non-residents: €700,000 per person. Properties below this individual threshold are exempt. Above it, progressive rates apply starting at 0.2%, rising to 3.5%.
The Valencian Community does not offer the wealth tax bonification available in some regions (Madrid historically applied a 100% bonification, effectively eliminating the tax for residents). This is worth factoring in for buyers considering multiple Spanish properties.
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Succession and Inheritance
Spanish inheritance tax on Spanish-located assets can be severe for non-residents, as regional relief schemes that benefit residents may not apply to foreign heirs. Rates on larger estate values reach 34%. Plan early: options include lifetime gifting (with gift tax implications), tenancy-in-common structures, or specialist cross-border estate planning. Do not leave this until it becomes urgent.
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Frequently Asked Questions
Is IVA always 10% on new-build properties? Yes for residential. Garages sold separately attract 21% IVA. Subsidised social housing (VPO — Vivienda de Protección Oficial) attracts 4%.
Can I offset Spanish taxes against my home country tax? Likely yes for many items, depending on your country's double taxation treaty (DTT) with Spain. The UK, Sweden, Netherlands, Germany, and France all have DTTs with Spain. Your domestic accountant should review your specific position.
Who pays IBI in the year of sale? Spanish law places IBI responsibility on the seller for the full calendar year. In practice, many contracts provide for pro-rata adjustment — check your purchase contract carefully.
Do I need to file Spanish tax returns every year as a non-resident? Yes. Modelo 210 for imputed income annually (deadline 31 December). Quarterly Modelo 210 if earning rental income. Non-compliance results in automatic fines and interest.
What happens if I don't pay IBI? Hacienda or the Town Hall can place a legal charge (embargo) on your property, blocking any sale or mortgage. Persistent non-payment (4+ years) can lead to forced sale proceedings. These things surface at the worst possible moment — just when you're trying to sell.
What is the total cost of owning a Costa Blanca property annually? For a typical €200,000 two-bedroom apartment: IBI €350–€500, community fees €1,200–€2,400, home insurance €300–€450, IRNR (if non-resident, not renting) €100–€200, maintenance allowance €1,500–€2,500. Total annual carrying cost: approximately €3,500–€6,000 before any mortgage payments.
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Getting the Numbers Right
Budget the total acquisition cost, not the list price. A €200,000 property in Spain costs approximately €222,000–€226,000 to complete in your name. Add furnishing and you're typically at €235,000–€245,000 all-in.
Understand your annual carrying costs before committing, particularly for investment purchases where cash flow determines viability.
At Hansson & Hertzell, we prepare detailed cost breakdowns with every buyer before they make an offer — no surprises on completion day. Contact us for a free consultation.
Tax Filing Deadlines: Key Dates for Non-Resident Property Owners
Non-resident property owners in Spain must observe several tax deadlines each year. Missing them results in surcharges (recargos) of 5–20% plus interest.
| Tax | Deadline | Form | |---|---|---| | IRNR (imputed income, Q4) | 31 January | Modelo 210 | | IRNR (rental income, quarterly) | 20 Jan / Apr / Jul / Oct | Modelo 210 | | Wealth tax (if applicable) | 30 June | Modelo 714 | | Capital gains (after sale) | 4 months post-completion | Modelo 210 |
A Spanish-based gestor or tax advisor typically charges €150–300/year for non-resident tax compliance. Given the potential fines for late or incorrect filing, this is money well spent.
