Property Tax in Spain for Foreigners | Save More With Expert Help

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The Costliest Mistakes We Help Expats Avoid:

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.

Why choose Tytle

Tytle’s tax advisors deliver tailored investment tax strategies to reduce liabilities, improve after-tax returns, and support investors with domestic or international portfolios.