Property Taxes in Spain: The Complete Guide for Foreign Buyers 2026
What you will learn in this guide
- ITP transfer tax: 10% on resale properties in Catalonia
- Annual IBI council tax and how it is calculated
- IRNR rental income tax at 19% for EU residents
- Capital gains tax when selling and the 3% withholding rule
- Wealth tax thresholds and legal ways to minimise your liability
Understanding the Spanish property tax system is essential for any foreign buyer or owner. Whether you are purchasing a holiday home, relocating to Catalonia or investing for rental income, the taxes you pay will significantly affect your total costs and ongoing returns. This guide explains every major tax you will encounter, with specific figures for Catalonia and practical guidance on minimising your liability legally.
Overview: Spanish property taxes at a glance
Before diving into the detail, here is a summary of the main taxes affecting property owners in Spain:
ITP (Transfer Tax)
When: When buying (resale)
Rate: 10% in Catalonia
Paid by: Buyer
Varies by region. 6% in Madrid.
IVA + AJD (New build)
When: When buying (new)
Rate: 11.5% (10% + 1.5%)
Paid by: Buyer
IVA replaces ITP for new constructions.
IBI (Council Tax)
When: Annual
Rate: 0.4% - 1.1% of cadastral value
Paid by: Owner
Set by each municipality.
IRNR (Rental Income)
When: Quarterly
Rate: 19% (EU) / 24% (non-EU)
Paid by: Non-resident owner
EU residents can deduct expenses.
Capital Gains Tax
When: When selling
Rate: 19% (EU) / 24% (non-EU)
Paid by: Seller
3% withholding by buyer at completion.
Wealth Tax
When: Annual
Rate: 0.21% - 2.75% (Catalonia)
Paid by: Owner
Applies above 700,000 EUR threshold.
What taxes do you pay when buying property in Spain?
The largest tax cost in a Spanish property transaction is paid at the point of purchase. The specific tax depends on whether you are buying a resale property or a new build.
ITP (Impuesto de Transmisiones Patrimoniales) — resale properties
ITP is the property transfer tax levied on resale (second-hand) properties. It is paid by the buyer and must be declared and paid within 30 business days of signing the notarial deed. The tax is administered by the autonomous community (not the national government), so rates vary significantly across Spain:
| Region | ITP Rate | Notes |
|---|---|---|
| Catalonia | 10% | Standard rate for most buyers |
| Madrid | 6% | Among the lowest in Spain |
| Valencia | 10% | Standard rate |
| Andalusia | 7% | Reduced from previous 8% |
| Balearic Islands | 8–13% | Progressive scale by purchase price |
Rates are indicative. Tax legislation can change. Always verify the current rate with a qualified tax adviser before completing a purchase.
IVA and AJD — new-build properties
For new-build properties purchased directly from a developer, ITP does not apply. Instead, you pay:
- IVA (VAT): 10% of the purchase price for residential properties (21% for commercial).
- AJD (Impuesto sobre Actos Juridicos Documentados): Stamp duty on the notarial deed. In Catalonia, the rate is 1.5%, bringing the combined total to 11.5% for new builds.
Resale vs new build: which is more tax efficient?
In Catalonia, resale properties attract ITP at 10%, while new builds attract IVA (10%) plus AJD (1.5%), giving a slightly higher combined rate of 11.5%. However, new builds may offer other advantages such as 10-year structural guarantees and energy efficiency that can offset the marginal additional tax cost. The choice should be made on overall value, not tax alone.
Annual property taxes in Spain: IBI
Once you own a property in Spain, the main recurring annual tax is the IBI (Impuesto sobre Bienes Inmuebles). This is the Spanish equivalent of council tax or local rates and is levied by the municipality where the property is located.
IBI is calculated as a percentage of the cadastral value (valor catastral) of the property. The cadastral value is an administrative valuation set by the national Cadastre and is typically 30–70% below the actual market value. This means the annual IBI bill is generally modest.
Municipalities set their own IBI rates within a band permitted by national law. Rates for urban properties generally range from 0.4% to 1.1% of the cadastral value. Larger cities tend to apply higher rates; rural municipalities tend to apply lower ones.
IBI calculation example
Illustrative example only. Cadastral values and IBI rates vary by property and municipality.
IBI is typically billed once a year and can usually be set up for direct debit from a Spanish bank account. Non-payment can result in surcharges and, ultimately, a charge against the property.
Income tax on rental income: IRNR for non-residents
If you rent out your Spanish property as a non-resident, you are liable for IRNR (Impuesto sobre la Renta de No Residentes) on the rental income received. The rules differ depending on whether you are an EU or EEA resident.
EU / EEA residents
- Taxed on net income after allowable deductions
- Deductible: mortgage interest, IBI, insurance, maintenance
- File Form 210 quarterly (or annually if no rental periods)
- Proportional deductions for mixed use (personal + rental)
Non-EU residents
- Taxed on gross rental income — no expense deductions
- Same Form 210 filing requirement
- Treaty relief may apply depending on your country of residence
- Consider whether Spanish residency provides a tax advantage
Deemed rental income for vacant properties
Even if you do not rent out your Spanish property, as a non-resident you must still file an annual IRNR return declaring an imputed income. This deemed income is calculated as:
- 1.1% of the cadastral value, if the cadastral value was revised within the last 10 years.
- 2% of the cadastral value, if the cadastral value was not revised within the last 10 years.
This imputed income is then taxed at 19% (EU/EEA residents) or 24% (non-EU residents). For most properties, the resulting annual tax bill is modest — a few hundred euros — but it is a filing obligation that must not be ignored.
Capital gains tax when selling your Spanish property
When you sell a property in Spain, the profit (capital gain) is subject to tax. For non-residents, capital gains are declared and taxed through the IRNR system.
The 3% withholding at completion
One important practical point: when a non-resident sells property in Spain, the buyer is legally required to retain 3% of the agreed purchase price and pay it directly to the Spanish tax authority (Agencia Tributaria) within one month of completion, using Form 211. This is not the final tax — it is an advance payment on account of the seller's capital gains liability.
If the actual capital gains tax owed is less than 3% of the purchase price, the seller can apply for a refund of the overpaid amount. If the actual tax owed exceeds 3%, the seller must pay the difference. The seller files their own return using Form 210.
How capital gains are calculated
The taxable gain is the difference between the net sale proceeds and the adjusted cost base:
Keeping detailed records of all purchase costs and any improvements made during ownership is therefore essential, as these directly reduce your taxable gain. Invoices, notarial deeds and bank receipts should be retained for the full period of ownership and beyond.
Wealth tax on Spanish property
Spain levies an annual wealth tax (Impuesto sobre el Patrimonio) on individuals who hold assets in Spain. Non-residents are subject to wealth tax only on their Spanish-situated assets, not their worldwide wealth.
The key threshold for non-residents is 700,000 euros of net Spanish assets. Below this threshold, no wealth tax is payable. Above it, tax applies on a progressive scale to the amount exceeding the threshold. Autonomous communities can vary the rates and thresholds.
In Catalonia, the wealth tax scale runs from 0.21% on the first tranche above the threshold, rising progressively to 2.75% on wealth above 10,695,996 euros. Most property owners with a single Spanish property will either fall below the threshold or pay a relatively modest amount.
Wealth tax: key points for foreign property owners
- 700,000 EUR threshold applies to non-residents (net Spanish assets)
- Mortgage debt secured against the property can be deducted
- File Form 714 annually, typically in June
- Catalonia applies its own progressive scale (0.21% to 2.75%)
- Some bilateral tax treaties may limit or eliminate wealth tax
- The "Solidarity Tax on Great Wealth" (2% minimum) may apply to very high-value portfolios
How to minimise your Spanish property tax liability legally
There are several legitimate strategies that foreign property owners can use to reduce their overall Spanish tax burden. None of these involve avoidance — they are standard planning techniques recognised under Spanish law.
Keep all purchase and improvement receipts
Every euro of documented cost at purchase — ITP, notary, registry, legal fees — and every euro of documented improvement during ownership reduces your capital gains base. Keep invoices indefinitely.
Deduct all allowable expenses against rental income
EU/EEA residents can deduct mortgage interest, IBI, insurance premiums, maintenance costs, management fees and depreciation against rental income. Claiming all allowable deductions is straightforward but often overlooked.
Check your bilateral tax treaty
Spain has double tax treaties with most European countries and many non-EU countries. These treaties can prevent you paying tax twice on the same income and may reduce or eliminate Spanish withholding taxes. Check the treaty between Spain and your country of tax residence.
Consider Spanish tax residency for long-term owners
Spanish residents pay capital gains on a progressive scale starting at 19%, can offset losses from other Spanish assets, and have access to the primary residence exemption (if they reinvest in a new primary residence). For long-term residents, residency can be tax-efficient.
Obtain mortgage financing
Mortgage debt secured against the property reduces the net value for wealth tax purposes. It also creates deductible interest for EU/EEA resident landlords who rent the property.
Important disclaimer
Tax law is complex and changes frequently. The information in this guide is provided for general orientation only and should not be relied upon as professional tax advice. Always consult a qualified Spanish tax adviser (asesor fiscal) or gestor before making any decisions based on tax considerations.
Buying or investing in property in Catalonia?
camiacasa is a real estate agency covering more than 60 cities across Catalonia. We help international buyers navigate the Spanish property market — from finding the right property to coordinating the legal and tax aspects of the transaction. Our team works with international buyers in English and can recommend specialist tax advisers familiar with the needs of foreign property owners.
To learn more about buying in Catalonia, see our guides on property for sale in Spain and investment opportunities in Catalonia.
Frequently asked questions about property taxes in Spain
Need expert guidance on Spanish property taxes?
Contact camiacasa for personalised advice on buying, selling or investing in property in Catalonia. We connect you with qualified tax specialists and guide you through every step.