Property Tax in Spain for Foreigners | Save More With Expert Help
Your Spanish Property Tax Shield: Timely filings, correct treatment of IBI and IRNR (no improper deductions), and maximized, compliant CGT outcomes.
Losing sleep over Real Estate Taxes in Spain and the risk of heavy penalties and fines? We got you covered.
Mistakes aren't cheap. The truth is, managing your taxes incorrectly means losing thousands in unnecessary penalties and profit erosion. Let us take that risk off the table.
The Triple Tax Trap (IBI, IRNR, Wealth Tax)Filing independently across local, national, and regional rules presents an immediate compliance risk, which can result in missed deadlines and avoidable Hacienda penalties.
The Non-Rented Income Tax Your unused property generates a "deemed" rental income that must be declared annually (IRNR). This liability is the most common and costly oversight for non-residents.
Leaving Profit on the TableSelling without a pre-sale strategy means failing to apply all legal deductions and offsets, allowing capital gains tax on property in Spain for Non-Residents to unnecessarily slash your final investment profit.
Unprepared for Legislative ShiftsNew non-EU purchase tax proposals create significant acquisition risk. Mitigation requires specialized, up-to-the-minute planning before you buy.
Missing Regional Optimization ITP and Wealth Tax rates are dictated by your Autonomous Community. Filing without precise regional knowledge means you are likely paying too much or filing incorrectly.
Overlooking Double Taxation RisksFailing to align Spanish and home-country filings can cause double taxation on the same income or gains, reducing your overall returns.
Understanding How Annual Property Tax in Spain Works For Expats
When you own a property in Spain, you're responsible for several annual taxes, whether you live there or not.
1. Impuesto sobre Bienes Inmuebles (IBI) - The Local Property Tax
The IBI is a municipal tax that all property owners pay annually to the local municipality. It’s calculated based on the cadastral value (valor catastral) of your property, which is an administrative value typically much lower than the market value.
- Rates: Varies by municipality, generally between 0.4% and 1.1% of the cadastral value.
- Payment: Due once a year, with deadlines set by your local municipality.
2. Non-Resident Imputed Income Tax (IRNR) - The "Deemed" Rent
- Calculation: Typically, 1.1% or 2% of the cadastral value is declared as 'income.'
- Tax Rate: 19% for EU/EEA residents, 24% for non-EU/EEA residents.
3. Wealth Tax (Impuesto sobre el Patrimonio)
Spain’s Wealth Tax is an annual levy on net assets.
- Scope: Residents are taxed on worldwide assets; non-residents only on assets located in Spain. The €700,000 exempt minimum also applies to non-residents.
- Regional rules: Since 11 July 2021, all non-residents (EU/EEA and non-EU) may apply the rules of the Autonomous Community where the greatest value of their Spanish assets sits (e.g., areas with rebates/allowances like Madrid).
- Filing trigger: You must file if there’s tax due or if your gross Spanish assets exceed €2,000,000, even if the final tax is zero.
- High-net-worth overlay: Above €3 million, the state Solidarity Tax on Large Fortunes (ISGF, Modelo 718) can apply even where regional Wealth Tax is rebated. ISGF remains in force in 2025.
Capital Gains Tax on Property in Spain for Non-Residents: What You Need to Know
When you sell a Spanish property, you will face two types of taxes on the profit:
State-Level Capital Gains Tax (CGT)
This is a tax on the profit you make from the sale (sale price minus purchase price and associated costs like notary fees and improvements).
- Tax Rate: For non-residents, a flat rate of 19% applies, regardless of whether you are an EU or non-EU resident.
- 3% Withholding Tax: The buyer is legally required to withhold 3% of the sale price and pay it to the Spanish Tax Agency on your behalf. This is an advance payment of your CGT. If the CGT you have calculated for your property in Spain as a non-resident is lower than the 3% withheld, you can claim the difference back.
Municipal Plusvalía Tax
This local tax is paid to the municipality on the increase in the value of the land (not the building) while you owned it. The calculation is based on the cadastral value and the number of years of ownership. Crucially, if you made no profit on the sale, or the value of the land did not increase, you do not pay this tax.
New 100% Tax on Property Purchases
As of October 2025, there is a legislative proposal to impose a significant purchase tax on non-EU property buyers who are not residents, which has been described as the '100% tax'.
- What it is: The proposal aims to discourage foreign speculation by applying an additional one-time tax equal to the purchase price for non-EU, non-resident buyers only.
- Status: It has not been passed by the Spanish Parliament. It is a proposal that is highly controversial and would likely face significant legal challenges due to constitutional concerns about a "confiscatory" tax rate.
If you are a non-EU buyer, it is essential that you consult a chartered tax advisor who can structure your purchase correctly and monitor this proposal.
For clarity on how these current and proposed changes affect you, schedule your free consultation today.
Streamlining Spain Real Estate Tax for Foreigners with Expert Tax Help
Our team of chartered tax advisors simplifies the entire property tax lifecycle—from acquisition to annual ownership and sale.
As part of our specialized tax preparation and planning services, we ensure you're compliant with all Spanish law while identifying every legal opportunity to reduce your real estate taxes in Spain.
Streamlining Spain Real Estate Tax for Foreigners with Expert Tax Help
Our team of chartered tax advisors simplifies the entire property tax lifecycle—from acquisition to annual ownership and sale.
As part of our specialized tax preparation and planning services, we ensure you're compliant with all Spanish law while identifying every legal opportunity to reduce your real estate taxes in Spain.
Streamlining Spain Real Estate Tax for Foreigners with Expert Tax Help
Our team of chartered tax advisors simplifies the entire property tax lifecycle—from acquisition to annual ownership and sale.
As part of our specialized tax preparation and planning services, we ensure you're compliant with all Spanish law while identifying every legal opportunity to reduce your real estate taxes in Spain.
Our Tax Services
Foreign Property Tax Compliance We ensure you meet your annual IBI and Imputed Income Tax (Modelo 210) obligations accurately and on time, helping you manage your recurring tax on property in Spain.
Capital Gains Tax Optimization We legally minimize your capital gains tax on property in Spain for Non-Residents by ensuring all allowable acquisition, improvement, and selling costs are correctly deducted, and help you reclaim the 3% retention.
Spanish Tax Residency Assessment Everything starts with knowing your tax residency status. We clarify your position to ensure you're paying the correct rates.
Wealth Tax & Succession Planning Our experts help you navigate the wealth tax and lay the groundwork for a tax-efficient property transfer for your heirs, using updated regional allowances.
Acquisition Tax Guidance (ITP/VAT) We provide clear advice on the purchase taxes (ITP/VAT and Stamp Duty) you will pay, factoring in the latest regional rates and legislative proposals.
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With a proven reputation for excellence, Tytle is dedicated to simplifying tax management, ensuring a smooth and stress-free process.
The goal is to ensure full compliance, optimize tax situations, and accelerate the tax process whenever possible. Our specialization lies in handling complex tax issues, such as double taxation and dual reporting, for individuals and businesses operating across borders.
Tytle ensures that clients are paired with the right tax advisor, offering transparent fees and timely support, no matter where in the world they are located.
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Our approach is straightforward: we listen, understand, and offer clear, actionable solutions.
For individuals and businesses seeking dependable, simple tax assistance, Tytle is the trusted company you can count on.
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Frequently asked questions
The two key annual taxes are the municipal IBI (local property tax, paid by all owners) and the national Non-Resident Imputed Income Tax (IRNR), which is a "deemed rental income" on property you don't rent out. Both must be paid yearly to stay compliant.
You pay a 19% tax rate on the profit from the sale (sale price minus the original purchase price and associated costs and improvements). Critically, the buyer will withhold 3% of the sale price as an advance payment toward this tax. A Chartered Tax Advisor can help ensure you claim all available deductions to minimize this tax.
As of October 2025, the proposed 100% purchase tax on non-EU, non-resident buyers is a legislative proposal only and is not currently law. It remains highly contested, and its future is uncertain. Do not panic, but do seek advice from an expert before purchasing to understand the risks and exemptions.
The IRNR is a tax on property in Spain that non-residents pay on property they don't rent out. The Spanish government "imputes" a small rental income (usually 1.1% or 2% of the cadastral value) and you are taxed on that figure at 19% (EU/EEA) or 24% (non-EU/EEA).
You are liable if your net Spanish assets (real estate, financial holdings, etc.) exceed the national threshold of €700,000. However, due to regional exemptions (especially in Madrid and Andalusia), the final liability can vary dramatically. Expert tax planning is essential for determining your exact liability and maximizing regional benefits.
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