Property taxes in Spain: is it expensive to buy property?

If you’re looking at buying or selling a home in Spain, you might be wondering what taxes you’ll actually have to pay. Read through this guide to get a clearer picture of what to expect: you’ll come across purchase taxes when you buy (like transfer tax or VAT and stamp duty), ongoing costs while you own the property (such as local property tax, and sometimes non-resident income tax), and sale taxes when you sell, including capital gains tax and a local municipal tax.

What are the main property taxes in Spain?

The Spanish property tax system includes a recurring municipal tax along with specific taxes on property transactions and ownership.

Here are the main ones:

• Local property tax (Impuesto sobre Bienes Inmuebles, IBI): The main annual municipal tax paid by property owners, based on the cadastral value of the property.

• Property transfer tax (Impuesto sobre Transmisiones Patrimoniales, ITP): A one-off tax paid when purchasing a resale property.

• VAT + stamp duty: A one-off payment when buying a new property.

• National capital gains tax: A tax on the profit made when selling a property.

• Municipal capital gains tax (plusvalía municipal): A tax on the increase in land value, paid when a property is sold, inherited, or gifted.

• Non-resident income tax (Impuesto sobre la Renta de no Residentes, IRNR): A tax applied to non-resident owners, based on actual rental income or a deemed income if the property is not rented out.

• Wealth tax (impuesto sobre el patrimonio): A recurring tax on net assets, including property, applicable only to higher-value estates and varying by region.

Who is subject to these taxes?

In Spain, property tax liability varies depending on whether the owner is an individual or a legal entity, as well as their residency status.

Individuals will generally pay IBI (local property tax) as property owners, regardless of whether they are residents or non-residents. If you sell, inherit, or receive a property as a gift, you may also be liable for plusvalía municipal (Municipal capital gains tax). In addition, individuals with higher-value assets may be subject to wealth tax. If you are a non-resident, you are also required to pay non-resident income tax on the property, even if it is not rented out.

Companies or legal entities are also responsible for paying IBI on any property you own. Companies may also be liable for plusvalía municipal when transferring property. However, wealth tax does not apply to legal entities. Non-resident companies owning property in Spain are subject to non-resident income tax under principles similar to those for individuals.

Finally, in all cases, the buyer – whether an individual or a company – is responsible for paying the relevant transfer taxes (Property transfer tax, VAT and stamp duty) when acquiring a property.

Taxes on buyers

When buying property in Spain, the taxes you pay depend on whether the property is new or a resale:

• Property transfer tax (Impuesto sobre Transmisiones Patrimoniales, ITP): Applies to resale properties and typically ranges from 6% to 10%, depending on the region and property value.

• VAT (Impuesto sobre el Valor Añadido, IVA): Applies to new-build properties at a standard rate of 10% for residential homes.

• Stamp Duty (Actos Jurídicos Documentados, AJD): Paid alongside VAT on new properties, usually between 0.5% and 1.5%, depending on the region.

Exemptions:

• Reduced rates for first-time buyers in certain regions;
• Discounts for young buyers;
• Lower rates for large families;
• Relief for buyers with disabilities;
• Lower rates for main homes in certain rural areas;
• Reduced tax rates for some social housing.

Taxes on sellers

If you sell a property in Spain, you’ll usually need to account for two main taxes:

• National capital gains tax: Charged on the profit made from the sale. Spanish tax residents pay progressive rates on gains. Non-residents pay a flat rate of 19%, regardless of whether they are from the EEA or outside it.

• Municipal capital gains tax (plusvalía municipal): A local tax based on the increase in the cadastral value of the land during ownership, paid to the municipality.

Exemptions:

• Sale of a primary residence when reinvesting in another;
• Sellers aged 65+ selling their main home;
• People in a situation of severe or major dependency.

Taxes on homeowners: recurring payments

Owning property in Spain involves ongoing taxes, which must be paid annually or periodically depending on your situation:

• Local property tax (Impuesto sobre Bienes Inmuebles, IBI): An annual municipal tax based on the cadastral value of your property. Each municipality sets its own rate, so the amount varies depending on location.

• Non-resident income tax (Impuesto sobre la Renta de no Residentes, IRNR): Non-resident owners must pay this tax whether or not the property generates actual rental income. If the property is not rented, the tax is calculated on the potential rental income. EEA residents are taxed at 19%, while non-EEA residents are taxed at 24%.

Exemptions:

• Discounts for large families;
• Possible rebates for energy-efficient homes;
• Exemptions for agricultural cooperatives and community-managed farms.

Is rental income taxed?

Yes, rental income in Spain is taxed, and the rules depend on your residency status. 

Spanish tax residents report rental income as part of their personal income tax return and pay at progressive rates. Non-resident owners are taxed under the non-resident income tax. 

Residents of EEA countries pay a flat rate of 19% on net rental income after allowable deductions. Non-EEA residents pay a flat rate of 24% on net rental income and can also deduct expenses directly linked to generating that income.

Exemptions:

• Reductions for leases of properties intended as the tenant’s habitual residence;
• Deductions for expenses such as maintenance, non-state taxes and surcharges, insurance, and amounts allocated to amortisation.

First vs second home: tax implications

In Spain, tax treatment differs depending on whether you are buying your first home or a second (or investment) property. First-time buyers may benefit from regional reductions on property transfer tax or other local incentives, particularly for younger buyers or properties classified as social or protected housing. Second homes and investment properties generally do not qualify for these reductions and may be subject to higher taxes.

Main residences can also enjoy additional tax benefits. For example, capital gains from the sale of a primary residence can be exempt if the proceeds are reinvested in another main residence or used to refurbish the current primary home. Moreover, main residences are generally exempt from wealth tax up to a maximum value of 300 000 EUR.

How to save money on your property purchase

If you’re buying property in Spain from abroad, the costs can quickly add up, not just from taxes but also from bank fees when moving money between countries. Using Wise could help you save on currency conversion and transfer fees, allowing you to stretch your budget further. 

Wise offers a multi-currency account that lets you hold EUR alongside 40+ other currencies, benefit from the mid-market exchange rate on all transactions, and enjoy lower fees on large transfers (22 000 EUR or more). This makes it simple to manage your property payments.

With Wise, you can pay the seller directly in EUR. Even if you already have a Spanish bank account, Wise makes it easy to transfer money between your home country and Spain. Whether you’re sending a deposit, paying the remaining balance, or moving funds between accounts, Wise offers a straightforward way to handle international transfers.

Wealth taxes in Spain

Spain’s wealth tax (Impuesto sobre el Patrimonio) is an annual tax on the net value of what you own – including property, savings, investments, and certain luxury assets – after subtracting debts like mortgages. It only applies once your wealth exceeds specific thresholds: generally 700 000 EUR per person, with an additional exemption of up to 300 000 EUR for your main home. This means that in practice, most people only start paying if their total wealth is above 1 000 000 EUR. The tax is progressive, with relatively low rates at the bottom rising to 3.5% for very large fortunes.

A key feature of the tax is that it varies significantly depending on where you live in Spain, as regions can adjust or even eliminate it. For example, Madrid currently applies a 100% rebate, effectively reducing the tax to zero, while Catalonia applies lower thresholds. Residents are taxed on their worldwide assets, while non-residents are taxed only on assets located in Spain. On top of this, very wealthy individuals (generally above 3 000 000 EUR) may also be subject to the solidarity tax on large fortunes, a nationwide measure designed to ensure high-net-worth individuals still pay some tax even in low-tax regions.

How to pay your taxes

In Spain, property-related taxes are administered by a combination of national, regional, and local authorities, depending on the type of tax. The Agencia Tributaria (Spanish Tax Agency) manages national taxes such as the solidarity tax on large fortunes and non-resident income taxes on property. Regional taxes, including wealth tax, and local taxes, such as the annual local property tax (IBI), are handled by the tax offices of the relevant autonomous community or municipal authorities. This devolved system means that both the responsible authority and the applicable rules can vary depending on the taxpayer’s location.

Deadlines for payment also vary by tax type. For example, local property tax is usually due annually, with municipalities setting specific deadlines, and payments can often be made automatically via direct debit. Property transfer tax must be paid within 30 days of a purchase, while wealth tax filings generally occur between April and June for the previous year, though direct debit arrangements may require earlier submission. Missing these deadlines can result in penalties, interest, or fines, so understanding the applicable authority and schedule for each tax is essential.

When to speak to a tax professional

It’s usually a smart idea to chat with a tax professional when buying or selling property in Spain. Property transactions involve several taxes, like property transfer tax, wealth tax, and the annual local property tax (IBI), and the rules can be tricky to navigate. A tax expert can help make sure everything is declared correctly, deadlines are met, and any exemptions or deductions you qualify for are applied.

Getting professional advice is especially useful if you’re dealing with high-value properties or significant assets, where mistakes could mean penalties or overpaying. Experts can also guide you through regional differences, help plan transactions efficiently, and keep you on top of changing rules, so you can focus on your move, sale, or purchase rather than worrying about paperwork.

Conclusion

Buying, owning, or selling property in Spain involves a variety of taxes at national, regional, and local levels. Understanding the main taxes can help you plan your budget and avoid surprises. Exemptions, regional differences, and deadlines make it important to stay informed or seek professional advice.

With careful planning and the right support, managing these taxes doesn’t have to be overwhelming. Whether you’re a resident or moving from abroad, knowing your obligations and options can save you money, simplify the process, and let you focus on enjoying or selling your Spanish property with confidence.

FAQ

How to calculate property taxes in Spain?

Calculating property taxes in Spain depends on the type of tax and the value of your property. For example, for local property tax (IBI), the tax is based on the cadastral value and the rate set by the municipality. Property transfer tax, VAT and stamp duty are calculated based on the purchase price or cadastral value of the property. Because rates and exemptions vary by region, it’s usually best to consult local authorities or a tax professional for an accurate calculation.

What are the Spanish property taxes for non-residents?

Non-resident property owners in Spain must pay taxes on both their property and any income it generates. Key taxes include non-resident income tax, which applies to actual rental income or deemed income if the property is not rented, and potential wealth tax, depending on property value. Non-residents also pay property transfer tax or VAT when buying property, and capital gains tax when selling. Rates and exemptions can differ between residents and non-residents, so seeking professional guidance is recommended.

Useful resources

• Spanish Tax Agency – Housing and other real estate (last checked 20th March 2026)
• Spanish Tax Agency – Property transactions calculator (last checked 20th March 2026)
• Spanish Tax Agency – Wealth tax (last checked 20th March 2026)