Spain property taxes explained

Buying a property in Spain comes with several taxes that every buyer, resident or non-resident should understand. The type and amount of tax depend on whether you purchase a new build or a resale property, your region, and whether you plan to live in Spain full-time or keep it as a second home.

In this guide, Bostello.com breaks down all the property-related taxes you’ll encounter – from one-off purchase taxes to ongoing yearly obligations, so you can plan your budget confidently before signing a single document.

Understanding property taxes in Spain

Spain’s property tax system combines state and regional regulations, meaning rates differ between communities such as Andalusia, Valencia, Madrid, and the Balearic Islands. Every buyer should check the regional rate in the area they’re purchasing in something your local lawyer or agent can confirm.

There are two main tax categories to consider:

• One-time purchase taxes – paid at the time of buying a property (e.g. ITP or VAT + Stamp Duty).

• Ongoing ownership taxes – paid annually, such as IBI (local property tax) or Non-Resident Income Tax.

If you’re deciding where to buy, you can compare typical rates by region in our Spain regions guide

One-time taxes when buying a property

When you buy a property in Spain, you’ll pay different taxes depending on whether it’s a resale or a new build.

ITP (Impuesto de Transmisiones Patrimoniales)

This is the Transfer Tax applied to resale properties – homes that have been previously owned.
Rates range between 6% and 10% depending on the region.

• Andalusia: 7% flat rate

• Valencia Region: 10%

• Balearic Islands: 8–11% (progressive based on price)

For example, if you buy a resale apartment for €250,000 in Alicante (Valencia region), you’ll pay €25,000 in ITP.

VAT (IVA) and Stamp Duty (AJD)

For new builds purchased directly from a developer, you pay VAT (IVA) instead of ITP.

• VAT is fixed at 10% for residential property.

• Stamp Duty (Actos Jurídicos Documentados, AJD) is charged at 1–1.5%, depending on the region.

So, a newly built €300,000 home would incur €30,000 VAT + €3,000–€4,500 in AJD.

These are paid at the notary during the completion process, which you can read more about in our step-by-step buying process guide

Annual property taxes every owner pays

Even after purchasing, there are yearly taxes to budget for. These depend on whether you’re a resident or non-resident in Spain.

IBI (Impuesto sobre Bienes Inmuebles)

The IBI is the municipal property tax charged annually by the local town hall.
It’s based on the property’s cadastral value, a government-assessed figure often lower than market value.

• Typical rates range between 0.4% and 1.1%.

• Paid once per year to your local council (Ayuntamiento).

• If you rent out your property, IBI can often be deducted as an expense.

Non-resident income tax

Even if you don’t rent out your property, the Spanish government assumes you receive “imputed income” from owning it.

• For EU residents, the rate is 19% of a notional rental value (usually 1.1–2% of cadastral value).

• For non-EU residents, the rate is 24%.

If you rent your property, tax applies to actual net rental income, with deductions allowed for maintenance, utilities, and agency fees.

Wealth tax (Impuesto sobre el Patrimonio)

Some regions still apply a Wealth Tax on global assets exceeding certain thresholds (e.g. €700,000).
However, regions such as Andalusia and Madrid have abolished it, while others like Catalonia still apply it.

You can confirm the latest thresholds with your Spanish tax representative.

Taxes when selling your Spanish property

If you sell your property in Spain, you may be liable for two main taxes:

Capital gains tax (CGT)

CGT applies to the profit made on the sale (selling price minus purchase price and allowable costs).

• For residents: progressive between 19-28%.

• For non-residents: fixed at 19% on net gain.

• You can reduce the gain by adding documented expenses like renovation, notary, or agency fees.

Plusvalía municipal

A local tax levied on the increase in land value between purchase and sale.
This is paid to the local council and depends on how long you owned the property.
If you sell at a loss, you can often claim exemption by submitting evidence to the council.

Tax optimization tips for foreign buyers

Owning property in Spain doesn’t have to be complicated if you plan ahead. Here are expert tips used by seasoned investors:

• Work with a Spanish tax representative to handle filings if you live abroad.

• Keep digital copies of all invoices and tax receipts — they’ll be invaluable when selling.

• Check double taxation treaties between Spain and your home country (UK, Sweden, Germany, etc.) so you don’t pay tax twice.

• Pay IBI and non-resident tax on time – unpaid taxes can block future property sales.

• Confirm your regional deductions – some areas offer lower rates for energy-efficient or heritage homes.

Calculate your estimated taxeswith our interactive guide or speak directly to a local agent familiar with your region.

FAQ – Property taxes in Spain

How much tax do you pay when buying property in Spain?

Most buyers pay between 7-11% in total taxes (ITP or VAT + AJD) depending on region and property type.

Do you pay ITP or VAT when buying a new home?

Resale = ITP.
New build = VAT (10%) + Stamp Duty (1–1.5%).

What is IBI and how is it calculated?

IBI is an annual council tax based on cadastral value, typically 0.4–1.1%. You’ll receive the bill once per year from your town hall.

Do foreigners pay annual tax in Spain?

Yes. Non-residents must pay Non-Resident Income Tax (even if the property isn’t rented).

How do I pay non-resident tax in Spain?

It’s declared through Form 210 (Modelo 210) via the Spanish Tax Agency (AEAT), typically by December 31 each year.