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Spanish Property Taxes:
What Foreign Owners Pay, and When
Five Moments When an Owner Pays Tax
Owning a home in Spain involves taxes at five different moments: when you buy, every year you own it, when you rent it out, when you sell and when it is inherited. Some are paid by every owner. Others depend on one question that has nothing to do with your passport or your residence permit: whether you are tax resident in Spain.
This page brings them all together and links to the detailed guide for each one. Tax rates are set partly by the State and partly by each region, and they change. The figures below apply to the Valencian Community, where Altea is located, and are indicative; we confirm the exact position for your property.
First Question: Are You Tax Resident in Spain?
Tax residence is a purely fiscal concept. You are tax resident in Spain if you spend more than 183 days in the country in a calendar year, or if your main centre of business or economic interests is here. It is also presumed if your spouse and minor children live in Spain.
Residents pay income tax (IRPF) on their worldwide income. Non-residents pay non-resident income tax (IRNR) only on income arising in Spain, including the income that Spanish law attributes to a property simply for owning it. Double tax treaties then decide where each type of income is ultimately taxed.
When You Buy
Resale property
transfer tax (ITP), at a general rate of 10% of the price in the Valencian Community.
New build bought from a developer
VAT at 10%, plus stamp duty (AJD) at 1.5%.
Notary, Land Registry and legal fees come on top. Taken together, a buyer should budget roughly 10% to 14% over the price. We break this down in our guide to the costs of buying property in Spain.
Every Year You Own It
- IBI, the local property tax, paid by every owner and calculated on the cadastral value of the property.
- The municipal charge for rubbish collection.
- Non-resident income tax, filed on the Modelo 210, even if the property is never rented out. Spain taxes an imputed income of 1.1% or 2% of the cadastral value, depending on the municipality, at 19% for residents of the EU and EEA and 24% for everyone else, including the United Kingdom and the United States. It is due by 31 December of the following year.
- Residents pay no separate tax on their main home, but a second home produces the same imputed income, which is included in their annual income tax return.
The annual Modelo 210 is the obligation foreign owners most often overlook. It tends to surface years later, when the property is sold and the buyer’s lawyer asks for proof that it has been filed.
If You Rent It Out
Rental income is taxed in Spain whether the tenant is Spanish or foreign and wherever the rent is paid. Non-residents declare it on the Modelo 210, quarterly. Residents of the EU and EEA can deduct the related expenses, such as IBI, community fees, repairs, insurance and depreciation; everyone else is taxed on the gross income.
Holiday lets in the Valencian Community must also be registered with the regional tourism authority before they are advertised.
When You Sell
Municipal plusvalía (IIVTNU)
A local tax on the increase in the value of the land, paid by the seller. It can be calculated by two methods, the lower of which applies, and it is not due if there has been no real gain.
Capital gains tax
For residents, the gain is taxed in their income tax return on the savings scale, from 19% to 28%. For non-residents, it is taxed at 19% and declared on the Modelo 210.
The 3% withholding
If the seller is non-resident, the buyer withholds 3% of the price and pays it to the tax office. If that is more than the tax actually due, the difference is reclaimed.
Residents who reinvest the proceeds in a new main home, and residents over 65 selling their main home, may be exempt. We explain both cases in our articles on capital gains tax for non-resident sellers and for resident foreign homeowners.
When It Is Inherited
Spanish inheritance tax is paid by each heir, not by the estate, and depends on the region, the value inherited and the relationship to the deceased. The Valencian Community offers substantial relief for close relatives, and non-resident heirs are entitled to the same regional allowances as residents. The tax must be settled within six months of the death. Our guide to Spanish inheritance tax covers it in detail.
Wealth Tax and the Solidarity Tax on Large Fortunes
Wealth tax is charged on net assets held on 31 December. Residents are taxed on their worldwide assets; non-residents only on assets located in Spain, which usually means the property.
- The general tax-free allowance is €700,000 per person, and residents can exempt their main home up to €300,000.
- The Valencian Community applies its own allowance, currently €1,000,000, and non-residents can apply the rules of the region where most of their Spanish assets are located.
- On top of it, the solidarity tax on large fortunes applies to net wealth above €3,000,000, with the regional wealth tax already paid deducted from it.
In practice, most owners of a single home on the Costa Blanca will not pay wealth tax. Owners of several properties, or of a high-value villa, should check the position every year, because the property is valued for this tax on the highest of several values, not on what they paid.
Owning Through a Company
Buying through a company changes the tax picture completely: the company is taxed rather than the individual, and properties held by entities based in non-cooperative jurisdictions pay a special annual tax of 3% of their cadastral value. For a home used privately, a company rarely saves tax. We explain the options in our article on buying property in Spain through a foreign company.
Tax Calendar for a Non-Resident Owner
| When | What | Who files |
|---|---|---|
| Within one month of buying | Transfer tax, or VAT and stamp duty | Buyer |
| Every year, usually in autumn | IBI and rubbish collection | Owner |
| Every quarter, if rented | Modelo 210 on the rental income | Owner |
| By 31 December | Modelo 210 for the previous year, if not rented | Owner |
| April to June | Wealth tax, where it applies | Owner |
| Within one month of a sale | Modelo 211, the 3% withholding | Buyer |
| Within four months of a sale | Modelo 210 on the capital gain | Seller |
| Within six months of a death | Inheritance tax | Each heir |
Get Your First Consultation for FREE!
Not sure what you should be paying on your Spanish property? The first consultation is free, and we will tell you exactly where you stand.
How We Help
- Annual Modelo 210 filings for non-resident owners, with or without rental income.
- Regularising years that were never filed, before the sale brings them to light.
- Calculating the taxes on a sale, including the 3% withholding and the municipal plusvalía.
- Reviewing whether wealth tax applies to you, and inheritance tax planning.
Frequently Asked Questions About Spanish Property Taxes
Do I pay tax on a Spanish property I do not rent out?
Yes, if you are non-resident. Spain taxes an imputed income on the property simply for owning it, declared every year on the Modelo 210. If you are resident and it is your main home, there is no such tax.
What happens if I have not filed the Modelo 210 for years?
It can be regularised. Late filing made voluntarily, before the tax office contacts you, carries surcharges that are considerably lower than the penalties applied after an inspection, and the years that can still be claimed are limited. It is far better to regularise before selling.
Is the plusvalía the same as capital gains tax?
No. The municipal plusvalía is a local tax on the increase in the value of the land, paid to the town hall. Capital gains tax is income tax on the profit from the sale, paid to the State. A seller may have to pay both.
Will I have to pay wealth tax on my Spanish home?
Usually not, if it is your only property in Spain and its value is below the applicable allowance. Owners of several properties or high-value homes should check each year.
Does owning through a company reduce the tax?
Rarely, for a home used privately. It replaces personal taxes with company taxes and adds accounting costs. It can make sense for investment portfolios, but it needs to be studied case by case before buying.