Taxes For Non-Resident Citizens Buying Property In Spain
Here is a guide to the taxes payable by non-residents buying property in Spain, which will depend on a number of factors including whether you are an EU/EEA citizen and whether you are buying for your own occupation or to rent out. The brief analysis set out below is based on the tax regulations in force in Spain in 2024.
Written by AGM Abogados
Buying property in Spain
When buying property in Spain, you have to pay a number of taxes (detailed below) and the expenses required for the acquisition such as the notarial fees (public deed), the filing at the Land Register (buyer security) and others, which could be between 1.5% and 2% of the property value. All those taxes and expenses will amount to around 8%-15% of the purchase price depending on whether or not the property is new and in what region it is located. Regarding new industrial warehouses or premises (21% VAT), the expenses amount to 24%-25%, although VAT can be deducted subsequently if they are rented out or leased.
Additional costs of 8% – 15% when buying property in Spain.
Taxes Payable When Buying Property
| New Property | Second Hand Property |
| 10% VAT | Property Transfer Tax depending on the region: |
| 1.5% Stamp Duty | Catalonia 10% |
| Total 11.5% | Madrid 6% |
| Throughout Spain | Andalusia 8% – 10% |
| Valencia 10% |
Holding property in Spain
The taxes payable annually for holding property in Spain are as follows:
- IRNR NON-RESIDENT INCOME TAX
- IP WEALTH TAX
- IBI PROPERTYTAX
You have to distinguish whether the property is for own use or for renting out to third parties. You also have to distinguish whether you are a resident of the European Union or not.
IRNR NON-RESIDENT INCOME TAX
Own home (not rented out)
Citizens who are NOT tax resident in Spain and own a home or property for own use in Spain must pay the non-resident income tax (IRNR) every year. The tax payable is calculated as follows:
The cadastral value (administrative value) and not the property purchase value is used as the basis. A coefficient is then applied to that value based on the latest appraisal made by the Administration. That will establish the gross tax base to which the fixed rate of 24% will be applied if citizens are not resident in the EU and 19% if they are citizens of an EU or EEA Member State with which there is an effective exchange of information giving us the tax payable.
| IRNR | Latest Update | Coefficient To Be Applied | |
| Gross Tax Base | Cadastral value | Updated > 10 years | 2% |
| Gross Tax Base | Cadastral value | Updated < 10 years | 1.2% |
| Tax Payable | 24% (Non-EU/Non-EEA) 19% (EU/EEA) |
For example:
| Property purchase value | €500,000 | €500,000 |
| Cadastral value | €100,000 | €100,000 |
| Year of cadastral update | 2000 | 2020 |
| Coefficient | 2% | 1.1% |
| Gross tax base | €2,000 | €1,100 |
| 24% Tax Rate | €480 | €264 |
| 19% Tax Rate | €380 | €209 |
Formal obligations: Non-resident citizens must file the IRNR tax return (Form 210) in the calendar year following the accrual date date (December 31st of each year). In the case of electronic filing, the tax debt can be paid by direct debit between January 1st and December 23rd.
Property leased
The IRNR return must be filed once a year for rental income.
You also have to distinguish whether the citizens are resident of the European Union or of the European Economic Area (EEA), or not.
Citizens resident in the EU and EEA
In the first case, the gross tax base is for all the rental income received after deducting the expenses for obtaining that income such as local taxes (property tax, garbage disposal fees, “keep clear” signs, etc.), property agency fees, owners’ association fees, the interest on the property acquisition loan, insurance and legal fees.
The result of that algebraic sum will be taxed at a 19% rate.
EU/EEA IRNR
| Rentals | €12,000 | |
| Expenses | €2,000 | Property tax, owners’ association fees, property agency fees, etc are deductible. |
| Gross Tax Base | €10,000 | Only the rental income |
| Tax Rate | 19% | Fixed |
| Tax Payable | €1,900 | Annually in quarterly payments |
Non-EU/non-EEA citizens
The gross tax base is for all the rental income received without deducting any expenses and at a fixed rate of 24%:
IRNR
| Rentals | €12,000 | |
| Expenses | €2,000 | NOT deductible. |
| Gross Tax Base | €10,000 | Only the rental income |
| Tax Rate | 24% | Fixed |
| Tax Payable | €2,880 | Annually in quarterly payments |
Formal obligations: On January 31st, 2024, Order HAC/56/2024 of January 25th was published in the BOE (Official State Gazette), amending the ministerial orders approving the change on how certain forms related to non-residents must be filed. Among others, the regulation establishes major new rules regarding the deadline for self-assessment and payment of the tax arising from property leases in Spanish territory by non-residents, consisting of the possibility of filing a single annual tax return.
That regulation entered into force on February 1st, 2024 and is applicable for income earned after January 1st, 2024.
IP WEALTH TAX
Citizens NOT resident in Spain who own assets and rights located in Spain must pay taxes every year for the assets they own in the country at December 31st, provided that they exceed the minimum exempt amount.
Regarding property, they are required to declare the property for the highest value of the following three:
- Cadastral (administrative) value.
- Value checked by the Administration for other taxes (property transfer tax, inheritance tax, etc.).
- Property purchase value (this will nearly always be the highest for the type of transaction we are dealing with).
The mortgages levied on those assets will also be able to be deducted.
There is a minimum exemption of €700,000, applicable to non-residents subject to a real obligation to contribute.
The tax will become payable on December 31st of each year and will affect the assets held on that date in Spain. Consequently, there is no tax period for that tax; for example, if a person dies on a day other than December 31st, the tax does not accrue in that year.
The state tax scale is as follows:
| Net tax base Up to euros | Tax amount – Euros | Rest of net tax base Up to euros | Applicable rate Percentage |
| €0.00 €167,129.45 €334,252.88 €668,499.75 €1,336,999.51 €2,673,999.01 €5,347,998.03 €10,695,996.06 | €0.00 €334.26 €835.63 €2,506.86 €8,523.36 €25,904.35 €71,362.33 €183,670.29 | €167,129.45 €167,123.43 €334,246.87 €668,499.76 €1,336,999.50 €2,673,999.02 €5,347,998.03 Upwards | 0.2% 0.3% 0.5% 0.9% 1.3% 1.7% 2.1% 3.5% |
Formal obligations: Non-residents must file a wealth tax return every year, regardless of whether or NOT the home is rented out, provided that the amount to be paid for wealth tax is positive or their property is worth over 2 million euros.
IBI LOCAL TAXES
Property tax (IBI) is a local tax that is levied on the ownership of property according to its cadastral value. The local council of the municipality where the property is located is responsible for its collection.
The rate is variable and levied on the cadastral value of the property and NOT the acquisition value.
In cities such as Madrid and Barcelona, the average tax is between €800 and €1,800 per year, depending on the value of the home and the location.
Formal obligations: Non-residents must pay the tax once a year. The tax is usually paid by direct debit and can be divided into 3 or 4 instalments during the year depending on the location.
Selling and transferring property
Non-residents must pay taxes for selling or transferring the property in Spain owned by them.
The following taxes must be paid:
- IRNR Non- Resident Income Tax
- IIVTNU Capital Gains Tax On Urban Land
IRNR NON-RESIDENT INCOME TAX
The IRNR is calculated by applying the 19% fixed rate (NOT 24%) to the difference between the sale price and the purchase price.
Formal obligations: The buyer will retain 3% of the property purchase value which it must pay to the tax authorities in its name and subsequently (2-4 months) the seller must file the IRNR return to settle the taxes in Spain, discounting the amount retained by the buyer.
| Non-Resident Income Tax (IRNR) | Property |
| Sale Price | €700,000 |
| Purchase Price | €600,000 |
| Profit | €100,000 |
| Gross Tax Base | €100,000 |
| Tax Rate | 19% |
| Tax Payable | €19,000 |
IIVTNU CAPITAL GAINS TAX ON URBAN LAND
The CAPITAL GAINS TAX ON URBAN LAND must be paid based on parameters established in the law, which depend on how long the property was held. The tax will depend on the cadastral value of the land, and its calculation may be variable.
The tax is usually between €1,000 and €20,000 but this depends on many factors such as the time elapsed between the buying and the selling, and such amounts are merely approximate.
Formal obligations: Non-residents must pay this tax when selling and it will be retained by the buyer, who must pay the amount to the tax authorities.
This information note was drafted on April 1st, 2024.