Property Taxes in Spain — Every Cost Explained

The tax you pay at purchase depends on whether the property is resale (second-hand) or new build (first transfer from developer).

Resale property — Transfer Tax (ITP: Impuesto de Transmisiones Patrimoniales)

In Andalucía, the transfer tax rate is 7% of the purchase price declared in the escritura. This is the single largest transaction cost. On a €300,000 purchase, that's €21,000 in transfer tax alone.

Note: the tax authorities can challenge the declared price if they believe it's below market value. They reference minimum "fiscal value" (valor de referencia catastral) guidelines. If the declared price is below this reference value, the authorities may issue a supplementary tax assessment for the difference. Your lawyer should verify the fiscal reference value before completion to avoid surprises.

New-build property — VAT (IVA) + Stamp Duty (AJD)

New properties (first transfer from developer) are subject to IVA (Impuesto sobre el Valor Añadido) at 10% instead of ITP. In addition, stamp duty (Actos Jurídicos Documentados) of 1.5% in Andalucía applies. Total: 11.5% on the purchase price. On a €300,000 new build, that's €34,500 — significantly more than resale's 7%.

Other purchase costs (not technically taxes but paid alongside them):

IBI (Impuesto sobre Bienes Inmuebles) — Annual Property Tax

IBI is Spain's equivalent of council tax or property tax. It's calculated on the cadastral value (valor catastral) of the property, which is typically well below market value. The rate varies by municipality. In Málaga, IBI for a typical apartment runs €400 to €1,200 per year. Villas with larger land plots (such as those in El Limonar) can be higher.

IBI is payable annually, typically in a lump sum or in two installments. You can set up a direct debit (domiciliación) with the Málaga City Council (Ayuntamiento) for automatic payment.

Basura (Waste Collection Tax)

A separate annual municipal tax for waste collection, approximately €50–100 per year in Málaga. Small but should be accounted for.

Non-Resident Income Tax (Impuesto sobre la Renta de No Residentes — IRNR)

This is the tax that surprises most international buyers. If you own property in Spain and are NOT a Spanish tax resident, you owe annual income tax in Spain — even if you don't rent the property out.

For non-rented properties: the tax is calculated on an "imputed rental income" (renta imputada) of 1.1% to 2% of the cadastral value, taxed at 19% (EU/EEA residents) or 24% (non-EU residents). On a typical apartment with a cadastral value of €100,000, this amounts to approximately €200–500 per year.

For rented properties: the tax is on actual rental income. EU/EEA residents can deduct expenses (maintenance, community fees, insurance, IBI) and pay 19% on the net income. Non-EU residents pay 24% on gross rental income with no deductions — a significantly worse deal.

This tax must be filed annually using Modelo 210, due by December 31 of the following year for imputed income, or quarterly for rental income. Many non-resident owners hire a fiscal representative (representante fiscal) or tax advisor to handle the filing.

Wealth Tax (Impuesto sobre el Patrimonio)

Spain levies a wealth tax on assets above certain thresholds. Non-residents pay wealth tax only on their Spanish assets. As of 2026, the first €700,000 of Spanish assets is exempt for non-residents. Above that threshold, rates range from 0.2% to 3.5% on the excess. Most buyers with a single property below €700,000 in value will not owe wealth tax. Buyers in the Golden Visa bracket (€500,000+) should factor this into their calculations.

Note: Wealth tax rules have been subject to changes, and a "Solidarity Tax" on very large fortunes was introduced in 2023. Current rates and thresholds should be verified with a tax advisor.

Capital Gains Tax (Impuesto sobre la Renta — Ganancia Patrimonial)

When you sell a property in Spain at a profit, the capital gain is taxed. For non-residents, the rate is a flat 19%. For residents, rates are progressive: 19% on the first €6,000 of gain, 21% on €6,000–50,000, 23% on €50,000–200,000, and 26% above €200,000.

The capital gain is calculated as the selling price minus the purchase price and allowable costs (purchase taxes, legal fees, documented improvement costs). If you've renovated the property, keep all invoices — documented renovation costs reduce your taxable gain.

3% Retention for Non-Residents

When a non-resident sells property in Spain, the buyer is legally required to withhold 3% of the purchase price and pay it directly to the Spanish tax authorities (Hacienda) as an advance payment on the seller's capital gains tax. This is not an additional tax — it's a withholding mechanism. If the actual capital gains tax owed is less than the 3% withheld, the seller can file for a refund (which can take months to process).

Plusvalía (Municipal Capital Gains Tax)

Plusvalía is a municipal tax on the increase in land value since the property was last transferred. It's calculated by the local council based on the cadastral value and the number of years owned. The amount varies but is typically €500–3,000 for a standard apartment held for several years. Historically paid by the seller, though the contract can stipulate otherwise.

Mistake 1: Forgetting the non-resident income tax. This is the most commonly overlooked obligation. Even if your apartment sits empty 365 days a year, you owe the imputed income tax annually. Failure to file results in penalties and interest.

Mistake 2: Not keeping renovation receipts. Every euro you spend on documented improvements (with proper invoices from registered businesses) reduces your capital gains tax when you sell. Keep receipts for renovations, major repairs, and upgrades.

Mistake 3: Declaring a purchase price below market value. Some buyers and sellers agree to declare a lower price in the escritura to reduce transfer tax. This is tax fraud. The tax authorities cross-reference declared values against fiscal reference values and will issue supplementary assessments with penalties. Your lawyer should advise on the correct approach.

Mistake 4: Not appointing a fiscal representative. Non-residents who own property in Spain should appoint a fiscal representative (often their lawyer or tax advisor) to handle tax filings and communications with Hacienda. Without one, tax notices can go undelivered, leading to missed deadlines and penalties.