When you prepare for property purchase, it is important to estimate the total amount of your payment. Besides the property cost you have to expect some additional taxes, which you have to pay both at the purchase and after becoming an owner. Let’s talk about taxes in one of the most popular country for foreign buyers.
The first thing we need to establish is the difference between ‘residents’ and ‘non-residents’, because these categories of buyers pay different taxes.
In the context of taxation, residents are considered to be those who meet at least one of these requirements:
Spend more than 183 days a year in Spain, not necessarily continuously.
Declare Spain as the center of their life interests, in other words, their family and business are there.
Buying Spanish property does not make you a Spanish resident. Most foreign owners remain under wing of their native tax system.
Please note! The information in this article is provided for informational purposes only and cannot be considered as legal advice. To calculate the tax burden in each specific case, we recommend contacting professionals.
Taxes When Buying Property in Spain
During purchasing everyone is equal. Locals and foreigners, residents and non-residents pay the same taxes. These taxes are paid immediately after the conclusion of a sale contract. You cannot register your transaction without paying state fees.
The tax rate depends on the type of your property/ Whether it’s residential or commercial, primary or secondary, the rate is different. Even location matters.
Secondary market Property transfer tax (Impuesto sobre Transmisiones Patrimoniales-ITP). Depends on the property location. The average around the country is 8%, but in Catalonia it’s 10%, while in the Canary Islands it’s 6.6%.
Primary market Value added tax, i.e. VAT (IVA, Impuesto sobre Valor Añadido). It’s the same in every region - 10%.
If you buy a land plot or commercial property, the VAT is 21%.
These are the most important taxes you are going to face. But there are also stamp duty, payment for making entries in the register of owners and notary expenses about 2-4% of the price. If you take out a mortgage, additional expenses increase by a couple of percent.
Please note! In Spain taxes are never included in the property that you see in ads for purchase and sale. Therefore, feel free to add about 13-15% to the price and you get the amount of your total expenses.
Taxes on the Maintenance of Real Estate in Spain
In addition to the cost of utilities expect for annual taxes, the amount of which will depend on the price of the property, it’s location, the quality of construction as well as on whether the property is rented or not.
Local authorities issue the main fee to all owners, including foreign ones. It’s called the IBI property tax (Impuesto sobre Bienes Inmuebles).
The tax is calculated from the cadastral value of real estate, which is always much lower than the market value. Each municipality determines the payment procedure independently.
Rates are different in all regions from 0.4% to 1.16%. The table below shows the average IBI property tax rates and the year of cadastral valuation in the Spanish provinces that are popular among foreigners.
Valencia
1998
1.07%
Girona
1990
0.88%
Alicante
1996
0.84%
Barcelona
2002
0.82%
Murcia
2002
0.79%
Malaga
2002
0.72%
Most owners of holiday homes and apartments in Spain receive an annual bill of €200-800. However, the IBI tax may be twice as high, if you buy luxury property in a premium location.
Properties in Spain
159 500 €
Apartment in Barcelona, Spain
77 sq.m321
Apartment in the center of Manresa, close to Barcelona. It consists of 77 m2 distributed between: ~2 bedrooms, 1 double, very bright and with access to a balcony, and 1 large, sunny single, also with access to a balcony. A very bright dining room with large windows and access to the balcony, also has air conditioning.~Immaculate, functional and...
EuropaHome
177 000 €
Apartment in Barcelona, Spain
77 sq.m431
The city of Ruby, province of Barcelona. BEAUTIFUL APARTMENT NEXT TO THE PARK, with 3 bedrooms in CAN FATHO, ready to move in. ~~ Discover your new home in the heart of Ruby! REMAX presents this magnificent apartment in one of the best areas of Can Fatho, in Ruby. After seeing it, you will appreciate the functional and cozy design created for...
EuropaHome
255 500 €
Chalet in Barcelona, Spain
153 sq.m542
A suburb of Barcelona. Urbanization of La Rosaleda, the city of Sant Fruitos de Bazes. The townhouse has an area of 153 m2. Ground floor; where there is a garage of 37 m2 with access to a terrace of 48 m2, where there is a barbecue. Hall and exit to the second floor.~Front garden.~Ground floor; Spacious and bright living/dining room with...
EuropaHome
649 000 €
Apartment in Barcelona, Spain
111 sq.m542
Residence
We are pleased to present this house in the heart of Vila de Gracia.~This facility stands out for its privileged location.~~What are we going to tell you that you don't know about this great city, our beloved Barcelona. Thanks to this wide range of amenities, an outstanding gastronomic offer, the vibrant cultural life that so many crave, all...
EuropaHome
521 000 €
Penthouse in Estepona, Spain
89 sq.m22
Residence
This Penthouse on the New Golden Mile is part of the second faze of a an exclusive complex of 88 homes specially designed for you to enjoy the Mediterranean lifestyle. It’s south exposure, glazed surface and large terraces ensure an optimal use of sunlight.
The open plan lounge area featuring the kitchen flows seamlessly and connects with the...
Marbella Dream Homes
396 000 €
Apartment in Estepona, Spain
124 sq.m32
This is a wonderful sustainable and modern development located in Estepona, Costa del Sol. Its focus on incorporating the environment as a design element is commendable. The communal areas and landscaped gardens not only enhance the aesthetics but also promote a sense of community and connection with nature.
The architectural construction of...
Marbella Dream Homes
521 000 €
Penthouse in Estepona, Spain
90 sq.m322
ResidenceOnline ViewingRemote Transaction
Apartments with Quality Materials and Affordable Prices in Estepona
The apartments with stylish designs are in an elevated location in Estepona. It is a famous tourist city located in the Costa del Sol region, in the southwestern part. Estepona is home to all amenities that can be needed in daily and social life.
The apartments are situated in a...
TEKCE
599 000 €
Penthouse in Estepona, Spain
107 sq.m432
ResidenceOnline ViewingRemote Transaction
Apartments with Quality Materials and Affordable Prices in Estepona
The apartments with stylish designs are in an elevated location in Estepona. It is a famous tourist city located in the Costa del Sol region, in the southwestern part. Estepona is home to all amenities that can be needed in daily and social life.
The apartments are situated in a...
TEKCE
811 000 €
Apartment in Estepona, Spain
145 sq.m543
ResidenceOnline ViewingRemote Transaction
Sea View Flats with Spacious Design in Prestigious Location in Estepona
The flats are located very close to Estepona. The municipality of Estepona is one of the most demanded and popular areas in the entire Malaga province and Costa del Sol region. Estepona is home to numerous amenities including quality beaches, pubs, restaurants, golf courses,...
TEKCE
871 000 €
Penthouse in Estepona, Spain
134 sq.m432
ResidenceOnline ViewingRemote Transaction
Sea View Flats with Spacious Design in Prestigious Location in Estepona
The flats are located very close to Estepona. The municipality of Estepona is one of the most demanded and popular areas in the entire Malaga province and Costa del Sol region. Estepona is home to numerous amenities including quality beaches, pubs, restaurants, golf courses,...
TEKCE
816 000 €
Apartment in Estepona, Spain
220 sq.m432
ResidenceOnline ViewingRemote Transaction
Sea View Flats with Spacious Design in Prestigious Location in Estepona
The flats are located very close to Estepona. The municipality of Estepona is one of the most demanded and popular areas in the entire Malaga province and Costa del Sol region. Estepona is home to numerous amenities including quality beaches, pubs, restaurants, golf courses,...
TEKCE
815 000 €
Penthouse in Estepona, Spain
269 sq.m322
ResidenceOnline ViewingRemote Transaction
Sea View Flats with Spacious Design in Prestigious Location in Estepona
The flats are located very close to Estepona. The municipality of Estepona is one of the most demanded and popular areas in the entire Malaga province and Costa del Sol region. Estepona is home to numerous amenities including quality beaches, pubs, restaurants, golf courses,...
TEKCE
768 000 €
Apartment in Estepona, Spain
198 sq.m432
ResidenceOnline ViewingRemote Transaction
Sea View Flats with Spacious Design in Prestigious Location in Estepona
The flats are located very close to Estepona. The municipality of Estepona is one of the most demanded and popular areas in the entire Malaga province and Costa del Sol region. Estepona is home to numerous amenities including quality beaches, pubs, restaurants, golf courses,...
TEKCE
635 000 €
Commercial property in Barcelona, Spain
179 sq.m
Commercial premises in the Gracia district of Barcelona. The room is angular, the total area is 179 sq.m. Currently leased - a supermarket of a well-known chain. The contract was signed on 08/01/2019 for a period of 10 years. The rental amount per year is 31,363 euros. The quota for the community in the amount of 1,392 euros per year and the...
ESTATE BARCELONA
650 000 €
Shop in Barcelona, Spain
198 sq.m4.95% per year
Residence
A commercial space located on a crowded street in a residential area with large storefronts facing three streets. The premises are located in a commercially advantageous area: on the shopping area of the district, where there is a park, local restaurants and bars, as well as various types of commerce (optics, household goods, local market,...
Retail Experts Factory SL
760 000 €
Flat in Barcelona, Spain
158 sq.m44
Welcome to this exclusive flat in Can Matas, Sant Cugat del Vallès! This property offers an unparalleled lifestyle in a privileged community. With an idyllic location and a wide range of amenities, this dream flat is synonymous with comfort and elegance.
Located in a prestigious community with a pool, gym, and communal area with children's...
Mercury Group
765 000 €
Flat in Barcelona, Spain
150 sq.m66
Residence
Magnificent fully exterior house of 130 m², with 6 bedrooms and 3 full bathrooms, located in one of the most sought-after areas, due to its proximity to the best international schools, its virtually direct connection to Barcelona, and its surroundings surrounded by nature.
Impressive four-sided house. It is distributed in a spacious...
Mercury Group
1 853 500 €
Villa in Barcelona, Spain
345 sq.m655
Residence
This magnificent detached villa is located in the luxurious residential area of Espluges de Llobregat, next to the Diagonal area and just 5 km from Barcelona. 466 m2 of private land and 331 m2 of modern, minimalist and luxurious buildings at the same time. Living on a promontory next to the best chalets in Espluga, with panoramic views of the...
EuropaHome
156 000 €
Apartment in Barcelona, Spain
57 sq.m431
The apartment is renovated and very bright, ready to move in. No elevator. It consists of 3 rooms, a fully equipped kitchen with a laundry room, a spacious bathtub with a bathtub providing everything necessary for comfortable everyday use, a bright living room with access to a balcony. The apartment has 2 air conditioners, a split system with...
EuropaHome
325 000 €
Apartment in Barcelona, Spain
80 sq.m211
THE PERFECT INVESTMENT!!! THE SECOND SEA LINE~ LOFT IS LOCATED IN THE CENTER OF SITGES, 50 meters from the beach. Very sunny, with a fantastic terrace of 22 m2. High quality. An impressive TERRACE. The loft is located on Calle Joan Tarrida, next to all the bars. If you want to live in a quiet loft, but in the center and on the second line of the...
The next government fee in Spain is the IRNR income tax (Impuesto sobre la Renta de No Residentes). It depends on your status in Spain, as well as on how you dispose of real estate. It applies to non-residents only.
Property tax in Spain for non-residents, who do not rent out their property:
If you do not make any profit in Spain and use the property yourself, the tax base for you is 2% of the cadastral value, or 1.1% for properties with the assessment carried out after 1994.
The IRNR tax rate for residents of the European Union, Iceland and Norway is 19%, and for all others it’s 24%.
Property tax in Spain for foreigners, who rent out their property:
If you make a profit from your Spanish real estate, the income tax IRNR is calculated on the amount of the annual rent. The rates are the same: 19% for European citizens, 24% for all other foreigners.
Owners of luxury real estate in Spain also pay the annual wealth tax (Impuesto sobre el Patrimonio). It was entered in 2008, when the Spanish economy was going through a crisis. The debate about the need to cancel this tax is still on.
The tax is collected by local municipalities. The tax base depends on the region, but in most cases owners of properties less than €700 000 are freed from payment (€1 400 000 for married couples). Various encumbrances such as mortgages can be deducted from the tax base. The stakes are rising along with the price of from 0.2% to 2.5%.
Property owners in Spain have one more fee to pay, which is the municipal tax on garbage disposal. It’s collected by the local authorities and used to keep surrounding areas clean.
The size of this tax depends on the location of the property. Usually, you will receive a check for €100-200 per year.
Please note! It is a duty of the owner to pay all fees and taxes on time. The city authorities send a notification to the Spanish address after you officially registrate as the owner. If you lose this notification or do not notice it (or it does not reach, which also happens), and as a result, the money is not paid, you will be charged a penalty. You will not be able to sell or mortgage real estate until you pay it. In cases of large debts, property can be seized by a court order, but in practice it rarely happens.
To simplify the calculation you can set the automatic payments from your bank account in Spain. Many agencies also offer a real estate management service to foreign owners, which includes monitoring and paying all bills.