Spanish Property Taxes — Complete Guide for Non-Residents
Spanish property taxes include 10% VAT on new builds, 1.2% stamp duty, annual IBI, and non-resident income tax at 19–24% on rental income. Understanding these costs is critical when evaluating the 3.7% average gross yield across 1881 tracked properties.
Purchase Taxes on New Builds
New-build properties in Spain attract 10% IVA (VAT) on the purchase price plus 1.2% AJD (stamp duty) in most regions. On a property priced at the market average of €687,140, this totals approximately €76,960 in purchase taxes alone. Additionally, buyers should budget for notary fees (€600–€1,200), land registry fees (€400–€800), and legal fees (typically 1–1.5% of the purchase price). The total cost of acquisition typically runs 12–14% above the stated purchase price.
Annual Property Tax (IBI)
IBI (Impuesto sobre Bienes Inmuebles) is the annual municipal property tax, calculated on the cadastral value of the property. Rates vary by municipality but typically range from 0.4–1.1% of the cadastral value, which is generally significantly below the market value. For a typical new build at €687,140, expect annual IBI of €300–€1,500. This is a deductible expense against rental income. Some municipalities apply surcharges for non-resident owners, so verify the specific rate for your target location.
Non-Resident Income Tax
Non-resident property owners in Spain face two income tax scenarios. When the property is rented: EU/EEA residents pay 19% on net rental income (after deductible expenses including IBI, community fees, insurance, repairs, and depreciation). Non-EU residents pay 24% on gross rental income with no expense deductions. When the property is not rented: an imputed income tax of approximately 1.1–2% of the cadastral value applies (19% tax on 1.1% of cadastral value for EU/EEA residents). With the average gross yield at 3.7%, the after-tax net yield for EU/EEA residents typically runs 1.5–2.5 percentage points below gross.
Capital Gains Tax
When selling Spanish property, non-residents pay capital gains tax at 19% on the first €6,000 of gain, 21% on gains from €6,001 to €50,000, 23% on gains from €50,001 to €200,000, 27% on gains from €200,001 to €300,000, and 28% on gains above €300,000. The buyer is required to retain 3% of the purchase price as a withholding against the seller’s capital gains liability. Allowable deductions include original purchase costs (taxes, fees), improvement costs with receipts, and selling costs. Inflation indexation was abolished in 2015.
Wealth Tax and Solidarity Tax
Spain levies a wealth tax on assets exceeding €700,000 per person (with an additional €300,000 exemption for the primary residence of residents). Non-residents are taxed only on Spanish assets. Rates range from 0.2% to 3.5% depending on total value and autonomous community. The Solidarity Tax (Impuesto Temporal de Solidaridad) applies to net wealth exceeding €3 million. For most investors purchasing properties at the average price of €687,140, wealth tax is unlikely to apply. However, those building portfolios of multiple properties should monitor total asset exposure.
Tax Planning for Investors
Effective tax planning can significantly improve net returns. Key strategies: ensure you claim all allowable deductions (EU/EEA residents only), consider the timing of purchase to optimise the first year’s imputed income tax, structure ownership appropriately (personal vs company), and maintain full records of all costs and improvements. The average gross yield of 3.7% across 1881 properties translates to approximately 2.8–3.2% net yield after Spanish taxes for EU/EEA residents, depending on expense levels and individual circumstances. Professional tax advice from a cross-border specialist is strongly recommended.
Frequently Asked Questions
What tax do I pay when buying a new build in Spain?▾
How much is annual property tax in Spain?▾
What tax do non-residents pay on rental income in Spain?▾
Is there capital gains tax when selling Spanish property?▾
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Source: Avena Terminal live data — avenaterminal.com · Updated 10 April 2026