Spain Property Tax for Foreigners (2026 Guide)
Quick Answer
Foreign buyers in Spain face multiple layers of tax: a one-time transfer tax of 6–10% on purchase (varies by region), an annual property tax (IBI) of 0.4–1.1% of cadastral value, and an annual non-resident income tax (IRNR) of 24% for non-EEA nationals or 19% for EU/EEA residents even on notional rental income if the property sits empty. Capital gains on sale are taxed at 19%. Understanding each layer before you buy is critical — the total tax burden is often 2–3× what buyers expect.
The Purchase Taxes: What You Pay on Day One
Transfer Tax (ITP — Impuesto sobre Transmisiones Patrimoniales)
The ITP applies to resale (second-hand) properties and is collected by Spain's regional governments (comunidades autónomas). Rates vary significantly by region, and choosing where you buy can be the single biggest tax decision you make:
- Andalusia (Marbella, Costa del Sol): 7% flat rate
- Madrid: 6% flat rate — the most competitive major region
- Catalonia (Barcelona): 10% — among the highest in Spain
- Valencia (Costa Blanca): 10%
- Balearic Islands (Mallorca, Ibiza): 8–13% progressive (8% up to €400K, rising to 13% above €1M)
- Murcia: 8%
- Canary Islands: 6.5% (plus IGIC instead of VAT on new builds)
ITP is calculated on the declared purchase price or the cadastral reference value (valor de referencia del Catastro), whichever is higher. The Catastro updated reference values in 2022, so low declared prices no longer avoid the tax.
VAT + Stamp Duty on New Builds
If you buy a new property directly from a developer, ITP does not apply. Instead you pay:
- VAT (IVA): 10% on residential new builds (21% on commercial or luxury properties above thresholds)
- Stamp Duty (AJD — Actos Jurídicos Documentados): 1.5% on the purchase price in most regions (0.75% in some, up to 2% in Catalonia)
So a new-build apartment in Marbella priced at €500,000 carries €50,000 in VAT plus €7,500 in stamp duty — a total of €57,500 in purchase taxes, before notary, registry, or agent fees.
Annual Property Tax: IBI
The Impuesto sobre Bienes Inmuebles (IBI) is Spain's annual property tax, levied by municipal governments. It is calculated as a percentage of the property's cadastral value — a government-assessed value that is typically 30–70% below market value in prime areas.
- Urban properties: 0.4% to 1.1% of cadastral value
- Rural properties (rustic): 0.3% to 0.9%
- Payment: annually, typically between September–November depending on municipality
In practice, IBI on a €2M Marbella villa with a cadastral value of €300,000 might be just €2,100–€3,300/year — very low relative to market value. In Madrid, cadastral values are closer to market, so IBI bills are proportionally higher.
Non-Resident Income Tax (IRNR — Modelo 210)
This is the tax most foreign owners fail to account for. If you do not rent out your Spanish property, you still owe income tax on its imputed rental value — the state assumes you are earning income by occupying or holding the property.
Imputed Income (Property Not Rented)
- Tax base: 1.1% of cadastral value (properties with cadastral value revised in last 10 years) or 2% of cadastral value (older cadastral values)
- Tax rate: 24% for non-EU/EEA nationals (US, UK post-Brexit, etc.)
- Tax rate: 19% for EU/EEA residents
- Filed via: Modelo 210, due by December 31 each year for the prior year
Example: a UK buyer owns a Mallorca villa with cadastral value €400,000. Annual imputed income = €4,400 (1.1%). Tax owed = €4,400 × 24% = €1,056/year simply for owning the property.
Actual Rental Income (Property Rented Out)
If you rent out your property, actual rental income is taxed:
- Non-EU residents: 24% of gross rental income (no deductions allowed)
- EU/EEA residents: 19% of net rental income (maintenance, mortgage interest, and depreciation can be deducted)
- Filed quarterly: Modelo 210 every quarter with income declarations
Capital Gains Tax on Sale
When you sell Spanish property as a non-resident, capital gains are taxed at 19% regardless of nationality (this applies to both EU and non-EU sellers since the EU rate was extended to non-EU in 2015).
The 3% Withholding Rule
This catches many sellers off guard. When a non-resident sells property in Spain, the buyer is legally required to withhold 3% of the purchase price and pay it directly to the Spanish Tax Authority (Agencia Tributaria) via Modelo 211. This is not a tax — it's a prepayment against your final capital gains tax liability.
- If your actual capital gains tax is less than 3% of sale price: you file Modelo 210 and claim a refund
- If it's more: you pay the difference
- Refund timeline: 6–18 months (notoriously slow)
Plusvalía Municipal
The Impuesto sobre el Incremento de Valor de los Terrenos de Naturaleza Urbana (IIVTNU), known as plusvalía, is a municipal tax on the theoretical increase in land value since you purchased. Historically always paid by the seller. A 2021 Constitutional Court ruling invalidated the prior calculation method; the revised system calculates either on actual gain or a coefficients-based formula — sellers can choose whichever is lower.
Wealth Tax and Solidarity Tax
Spain has two overlapping wealth taxes in 2026:
- Impuesto sobre el Patrimonio (Wealth Tax): Non-residents are taxed on Spanish-situated assets. National rates range 0.2%–2.5% above €700,000 threshold (per individual). Some regions (Madrid) apply a 100% bonus = effectively 0%. Andalusia, Murcia also apply significant bonuses. Catalonia and Balearics do not — you pay in full.
- Impuesto de Solidaridad de las Grandes Fortunas: A national solidarity surcharge introduced in 2023. Applies to net wealth above €3,000,000. Rates: 1.7% (€3M–€5M), 2.1% (€5M–€10M), 3.5% (above €10M). This overrides regional wealth tax bonuses — Madrid residents who paid 0% wealth tax now pay the solidarity surcharge.
| Tax | Rate | Basis | When |
|---|---|---|---|
| ITP Transfer Tax | 6–13% (by region) | Purchase price / reference value | On purchase (resale) |
| VAT (IVA) | 10% | Purchase price | On purchase (new build) |
| Stamp Duty (AJD) | 1–2% (by region) | Purchase price | On purchase (new build) |
| IBI (annual) | 0.4–1.1% | Cadastral value | Annually |
| IRNR (non-resident income) | 19% (EU/EEA) / 24% (other) | Imputed or actual rental income | Annually (Modelo 210) |
| Capital Gains Tax | 19% | Net gain on sale | On sale |
| Withholding on sale | 3% of sale price | Sale price | On sale (by buyer) |
| Plusvalía municipal | Varies (land value formula) | Land value increase | On sale (seller) |
| Wealth Tax | 0.2–2.5% | Net Spanish assets above €700K | Annually (regional) |
| Solidarity Tax | 1.7–3.5% | Net wealth above €3M | Annually (national) |
Filing Requirements: Modelo 210
The Modelo 210 is the annual non-resident income tax declaration. It covers both imputed income (empty property) and actual rental income. Key deadlines:
- Imputed income: File once per year, by December 31 of the year following the tax year (e.g., 2025 imputed income → file by December 31, 2026)
- Rental income: Filed quarterly — April 20 (Q1), July 20 (Q2), October 20 (Q3), January 20 (Q4)
- Capital gains on property sale: Filed within 3 months of the sale date
Penalties for late filing start at €100 per declaration. Persistent non-filers face surcharges of 5–20% of the tax owed plus interest. The Agencia Tributaria actively cross-references property ownership records with tax filings.
Do I pay Spanish tax if I only use the property myself and don't rent it out?
Yes. Spain imposes a deemed rental income tax on non-residents who own property even if it sits empty. The notional income is calculated as 1.1–2% of the cadastral value, then taxed at 19% (EU/EEA) or 24% (others). You must file Modelo 210 annually even for a property you never rented.
What's the difference between cadastral value and market value?
The cadastral value (valor catastral) is a government-assessed value maintained by the Catastro. In most prime areas of Spain it is significantly below market value — sometimes only 20–40% of what you'd actually pay. For IBI and IRNR purposes, taxes are calculated on the cadastral value, not the market price. However, the 2022 introduction of the Catastro reference value (valor de referencia) now provides a higher floor for transfer tax calculations.
As a US citizen, does Spain tax my worldwide income?
As a non-resident, Spain only taxes your Spanish-source income and Spanish-situated assets. The US-Spain tax treaty prevents double taxation — any Spanish tax you pay can be credited against your US tax liability. If you spend more than 183 days in Spain in a calendar year, you become a Spanish tax resident and are taxed on worldwide income (standard Spanish rates up to 47%). Most foreign buyers remain non-residents specifically to avoid this.
Can I deduct mortgage interest against my Spanish rental income?
Only if you are an EU or EEA tax resident. Non-EU nationals (including post-Brexit UK buyers and Americans) cannot deduct any expenses — they pay 24% on gross rental income with no deductions. EU/EEA residents pay 19% but can deduct mortgage interest, property taxes, maintenance, insurance, and management fees from their rental income before calculating the tax.