Spain Property Taxes Guide
Understanding the tax landscape is an essential part of purchasing and owning property in Spain, especially for international buyers. This guide outlines the main taxes involved in buying property, annual ownership taxes, and other fiscal considerations that may affect your investment or lifestyle purchase.
Taxes at the Time of Purchase
When you buy property in Spain, several taxes are applied based on whether the property is new or resale, and on its location. Key taxes include:
- Value Added Tax (IVA): Applies to new properties sold by developers. For residential property, the standard rate is generally 10%.
- Transfer Tax (ITP): Applies to resale properties. The rate varies by region but typically ranges from 6% to 10% of the purchase price.
- Stamp Duty (AJD): Often charged on new properties in addition to IVA. The rate varies by autonomous community, commonly 0.5% to 1.5%.
These taxes are usually calculated on the purchase price declared in the deed and are payable within a set period after contract signing.
Annual Property Ownership Taxes
Once you own property in Spain, there are ongoing taxes that you should plan for as part of your yearly financial commitments:
- Impuesto sobre Bienes Inmuebles (IBI): An annual municipal property tax based on the cadastral value of the property. The rate is set by the local council and typically ranges from 0.4% to 1.1%.
- Non‑Resident Income Tax: If you do not live in Spain and do not rent the property, you may be liable for a notional rental income tax. This is calculated on a percentage of the cadastral value.
- Rental Income Tax: If you rent out the property, any rental income is subject to income tax. The rate and deductions vary depending on residency status and whether the rental is long‑term or short‑term.
Capital Gains Tax (CGT)
If you sell your Spanish property for a profit, capital gains tax may apply. The gain is calculated as the difference between the sale price and the original acquisition price (adjusted for certain costs). Non‑residents typically pay CGT at rates set by national tax law; residents follow the standard tax brackets.
Wealth Tax (Impuesto sobre el Patrimonio)
Spain imposes a wealth tax on the net value of an individual’s worldwide assets above a certain threshold. Property is included in the assessment. Exemptions and thresholds vary by autonomous community, and non‑residents are usually taxed only on assets located in Spain. It’s important to check local rules or seek professional advice.
Other Considerations
Tax regulations and rates in Spain can vary significantly by region (autonomous community) and can change over time. Additional points to consider include:
- Some regions offer tax reductions for primary residences or energy‑efficient properties.
- Short‑term rentals may be subject to specific tourist or lodging taxes.
- International tax treaties can affect how income and gains are taxed between Spain and your home country.
Working with a qualified tax advisor experienced in Spanish real estate is recommended for international buyers to ensure compliance and to optimise your tax planning.
Related Market Guides
Spain Property Legal Guide – Legal process and documentation for buyers.
Spain Property Finance Guide – Mortgages, deposits, and lending considerations.
Spain Property Buyer Tips – Practical advice for buyers entering the market.
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