What Property Taxes Do You Pay in Spain When Buying, Owning, or Selling a Home?

Property Taxes in Spain: Complete Guide for Buyers and Owners

Buying a property in Spain is much more than a real estate decision—it's a long-term financial and legal commitment. Whether you're purchasing a home as an investment or planning to live in it, it's essential to understand the associated costs and taxes not just at the time of purchase, but also throughout the ownership period and eventually at the point of sale.

In this article, we provide a clear and structured explanation of the costs involved at each stage, how to calculate them, what differences exist between new build and resale properties, and which taxes affect residents and non-residents. We also offer practical tips to avoid unpleasant surprises and make confident decisions.

What taxes and costs are paid when buying a property in Spain?

The first major expense naturally occurs at the time of purchase. But taxes and costs vary depending on the type of property: buying a new build is not the same as purchasing a resale property.

New build property

If you buy directly from the developer, the costs you should consider include:

• VAT (Value Added Tax): 10% of the purchase price. This is the main tax applied to the transaction.

• Stamp Duty (AJD): 1.2%, although this percentage may vary slightly depending on the autonomous community.

• Notary and land registry fees: approximately an additional 1% combined.

• Legal fees: around 1% if you hire a specialised lawyer.

💡 VAT and AJD are non-deductible and non-negotiable. You can find more details about AJD on the official website of the Spanish Tax Agency.

Resale property

For resale properties, VAT is not paid. Instead, the following applies:

• Transfer Tax (ITP): 7% of the declared purchase price (for example, in Andalusia).

• Notary and land registry fees: approximately 1%.

• Legal fees: also around 1%.

The ITP rate may vary depending on the region and the buyer's profile. In some areas, discounts apply if you are under 35 or plan to use the home as your primary residence.

Ongoing costs and taxes while owning a property

Once the purchase is complete, the owner of a property in Spain must handle a series of recurring financial obligations. These vary based on the type of property, its location, and its use, but knowing them is essential to avoid unexpected expenses.

1. Community fees

If the property is in a residential complex or building, there is likely a community of owners. This community is responsible for maintaining common areas (elevators, gardens, pools, security, cleaning, etc.). Fees may be paid monthly, quarterly, or even semi-annually, and the amount depends on the size of the property and shared services.

2. Property Tax (IBI)

IBI is a municipal tax levied on property ownership. It is calculated based on the cadastral value of the property and its location. It is an annual and mandatory payment for all owners, whether resident or not. In Marbella, for example, this amount typically ranges between €500 and €3,000 per year, although it can be higher for luxury properties.

More information is available on the Marbella City Council's official site.

3. Waste collection fee

In addition to IBI, municipalities may apply an annual fee for urban waste collection. Although usually moderate, it should be considered, as it is also calculated based on the property size and location.

4. Utilities (electricity, water, gas, internet)

Even if the property is not used year-round, utilities must remain active, which involves a minimum fixed cost. Electricity and water have base charges for grid maintenance and meters, even without consumption. These fees may be around €15–30 per month for each utility. If the property is used regularly, costs will obviously increase.

5. Home insurance

Although not always mandatory, having home insurance is highly recommended. It covers damages from fire, theft, leaks, or electrical issues. Basic policies start around €150 per year, but for high-value homes or exclusive communities, premium coverage is advised and can exceed €500 annually.

6. General maintenance

Homes require maintenance, especially villas or properties with gardens and pools. Services like gardening, cleaning, security, or minor repairs can add up. Some owners choose to hire a property management company to handle all this, adding an extra cost but ensuring peace of mind—especially for non-resident owners.

7. Non-resident tax declaration

Non-resident property owners in Spain must submit Form 210 annually, declaring imputed income from owning the property, even if it is not rented out. This tax is calculated based on the property's cadastral value and usually ranges from 0.5% to 0.6%. It is a little-known obligation that can result in penalties if ignored.

You can find official information on the Tax Agency's website.

8. Rental income and taxation

If you rent out your property, whether short or long-term, you must declare the income and pay taxes on it. Non-EU residents may face a 24% withholding tax, while EU residents can deduct certain expenses and pay 19%. It is advisable to work with a tax advisor to optimise your declaration.

Costs and taxes when selling a property in Spain

When the time comes to sell a property in Spain, the owner—whether resident or not—must cover certain costs and taxes. Understanding these in advance is key to planning the sale correctly and avoiding surprises.

1. Municipal capital gains tax

This tax, officially known as the “Tax on the Increase in Value of Urban Land” (IIVTNU), is collected by the local council where the property is located. It taxes the increase in land value from the time of purchase to the time of sale, regardless of building improvements.

The amount varies depending on the location and years of ownership, and can range from a few hundred to several thousand euros. In some cases, if there has been no actual increase in value, a reduction or exemption may be requested.

See more details in this guide on the new capital gains tax.

2. 3% withholding for non-residents

Non-resident sellers in Spain are subject to a mandatory 3% withholding on the sale price. This amount is withheld by the buyer and paid to the Tax Office on behalf of the seller. It serves as an advance payment on capital gains tax.

If the seller proves there was no gain (or a smaller gain), they can request a refund of the difference via Form 210. This process can take 6 to 12 months.

3. Capital gains tax

The difference between the purchase price (adjusted for costs and taxes) and the sale price generates a capital gain subject to the Non-Resident Income Tax (IRNR). The tax rates are:

• 19% for residents of the European Union, Norway, or Iceland
• 24% for residents of other countries

It’s crucial to keep all documentation related to the original purchase, improvements made, and legal or notary fees, as these can be used to reduce the taxable base.

4. Legal and agency fees

If the sale is handled by a lawyer, legal fees typically amount to around 1% of the sale price. If you work with a real estate agency, their commission—usually between 3% and 6% of the property value—must also be considered, depending on the agreement and type of property.

5. Mortgage cancellation (if applicable)

If the property was under mortgage, deregistration costs must be covered. Even if the loan is fully paid, removing it from the Land Registry is mandatory. This process can cost between €600 and €1,000, depending on the financial institution and the notary.

6. Mandatory certificates

Before selling, you must provide a valid energy efficiency certificate. It usually costs around €150 and must be issued by an authorised technician. Other required documents may include a certificate of no community debt and, in some cases, a habitability certificate.

Conclusion: legal planning and expert guidance

Buying, owning, and selling a property in Spain involves tax obligations and expenses that must be understood from the outset. From VAT or ITP at purchase, to capital gains and municipal taxes at sale, and annual ownership costs in between—all must be considered.

Having the support of a lawyer specialised in real estate and tax law is essential to make informed decisions, avoid risks, and protect your investment. Beyond the numbers, buying or selling a home also involves emotions, life projects, and stability. Legal peace of mind is a fundamental part of the process.

Frequently Asked Questions (FAQ)

1. What tax is paid when buying a resale property?
   Transfer Tax (ITP), which is 7% of the purchase price in Andalusia.
2. What fixed costs do I have as a non-resident owner?
   IBI, waste collection, community fees, utilities, and Form 210 (non-resident tax).
3. Is the capital gains tax (plusvalía) always payable on sale?
   Yes, unless you can prove that there was no increase in land value.
4. Can I recover the 3% withholding after selling?
   Yes, if you prove there was no gain or a lower one, you can request a refund.
5. How much tax do I pay if I rent my property as a non-resident?
   Between 19% and 24% of the income, depending on your country of residence.